Barge Fleeting Agri Grain MrktgFebruary 8, 2000
The Honorable Terry Duggan
Mayor / City of Dubuque
50 West 13th Street
Dubuque, IA 52001
Dear Mayor Duggan and Members of The City Council:
Agri Grain Marketing (AGM) located at 1050 Kerper Blvd Dubuque, IA 52001 would
like to take this opportunity to address the Mayor and Council regarding barge tÙeting
arrangements now under consideration. We had a representative at the City Council meeting last
night (Feb. 7, 2000), who had been invited by American River Transportation (ARTCO) to
attend. There was also a representative of Peavey Grain there as well. We had hoped to address
the Council at that time. Because the request by ARTCO did not involve a public hearing, this
was not possible.
We would like the Mayor and City Council to be aware of the impact that timely,
economical fleeting arrangements have on our operation here in Dubuque, or any other river
terminal location. We service the agriculture and business community in an area that involves
approximately a 100 mile radius from Dubuque. Along with Peavey Grain of Dubuque and
Consolidated Grain of East Dubuque, we handle at least 60 million bushels of grain per year
valued at 150-200 million dollars, depending on markets. This volume requires upwards of 1000
barges per season. In addition, there are 4-500 barges of fertilizer, salt, coal, and other
commodities handled in the Dubuque Harbor area. These commodities serve as inputs for the
agriculture and business community, energy for electricity and power production, winter snow
and ice control for the local highway system, etc. The value of these other commodities, handled
here in Dubuque, is at least another 100 million dollars. It should be clear that this has a
tremendous economic impact on the local area.
More specifically, how do timely fleeting arrangements effect us at AGM IDubuque? We
are an "over-the-bank" grain terminal. In simple terms, all the grain that comes into our facility
today must go on to a barge today. We have only minimal on-site storage and that is normally
used to handle a second commodity (example: com to the river I beans to storage). During peak
production periods, this involves at least 5 barges per day (Peavey and Consolidated would be
moving grain at a similar rate as well). In order to accomplish this with the production equipment
currently available here, when a barge is full, we need a fresh empty barge immediately. If a
fresh empty barge isn't available right away, then truck customers must wait. If we lose the
ability to a have a quick turn on the barge, this would cause us to lose market share, since
customers would likely go to the competition if their waits for barge switches became longer.
This ability to provide timely barge switching can be accomplished in basically 2 ways:
I) Provide fleeting close to the production facilities.
2) Provide an additional boat to handle fleeting at a greater distance.
The first option is the most cost effective method. If fleeting was further away and ARTCO had
to put on another vessel to move barges, this would likely raise freight costs significantly. This
would impact our competitive position in terms of grain acquisition. Margins in grain are
traditionally quite low and lowering the price bid for grain in order to maintain necessary
operating margins would hurt our market position. It often doesn't take a very big price
advantage to send grain to a different market. Given the right pricing scenario, grain which
should move to this market could potentially go to McGregor/Prairie du Chien or Clinton. Higher
freight rates in Dubuque would thus reduce the grain volume handled at this location on the river,
reducing economic activity in this area.
Higher freight rates would also hurt the local community in other ways as well. Farmer
input coasts would likely rise (higher fertilizer costs), creating an additional squeeze on an
already tight agricultural economy. Winter snow removal costs would be increased (higher salt
costs I higher taxes). Energy generation costs would increase (higher cost for coal). The long
term effect of all this could be of enormous consequence to the greater Dubuque area.
We would like for the Mayor and City Council to understand the AGM is supportive of
the Mississippi River Development Project. We are aware of the need to have a balanced
approach to the Mississippi River and its use. We will work to foster a harmonious relationship
between the business community and other interests involved in this effort. But it is important to
appreciate the fact that the Mississippi River is a working river and it would be desirable to
integrate this concept into the development of the riverfront. The economic importance of
business activity here on the river (jobs and income, service to the agriculture community, tax
revenue, etc.) is huge and should be a factor in any decisions that are made regarding the
development along the Mississippi River here in Dubuque.
Thank you for your consideration. If we can be of any further assistance, please feel free
to contact us.
Sincerely,
Karl Stieglitz
Production Supervisor
Agri Grain Marketing I Dubuque
1050 Kerper Blvd.
Dubuque, IA 52001
319-556-4532