What is in this article?:
- Infrastructure investments could save U.S. farmers millions
- Must carry lighter loads
• This aging transportation system has been providing U.S. soybean farmers a competitive advantage in the global market.
• But a recent study funded by the United Soybean Board’s (USB’s) and soy checkoff’s Global Opportunities (GO) program supports the growing evidence that this advantage continues to be threatened by the deterioration of U.S. highways, bridges, rails, locks and dams.
Must carry lighter loads
The U.S. Army Corps of Engineers has the responsibility to maintain a depth of 45 feet on the lower Mississippi River, but, due to funding issues, has not been able to dredge to maintain an adequate navigable channel, limiting ships to 42-foot draft, meaning the vessel holds fewer soybeans.
If U.S. waterways cannot accommodate these larger ships, the U.S. soy industry may not be able to capitalize on the potential advantages that the expanded Panama Canal will offer. The checkoff-funded study also shows that limiting the volume of soy that can be in one shipment could lead to higher freight costs.
The U.S. railway network has also been under pressure, especially as more U.S. soybeans have made their way to China.
The industry has seen an increase in rail movement from the western Soybean Belt to the Pacific Northwest. In 2009-2010, 68 percent of U.S. soybeans traveling by rail ended their U.S. journey in the Pacific Northwest. The study predicts that China’s import of U.S. soy will continue to grow, doubling by 2020-2021.
“Brazil has several proposed infrastructure projects that haven’t been completed yet,” adds Profit. “But if those improvements are made in Brazil, it would put them on par with U.S. soybean farmers as far as transportation costs, and we would lose that advantage.”
Improvements to the transportation infrastructure would make the movement of U.S. soy and other agricultural products more efficient, totaling expected cost savings to U.S. soybean and grain industries of $145.9 million annually, according to the study.
U.S. farmers wouldn’t be the only ones to benefit from improved infrastructure. Several U.S. industries remain fully dependent on oilseeds and grain. These industries annually provide 1.5 million jobs and more than $352 billion in U.S. output, $41 billion in labor earnings and $74 billion in value added on to the U.S. economy.
For more information on the United Soybean Board, visit www.unitedsoybean.org .