Just as U.S. soy exports have increased, so has the importance of maintaining the modes of transportation that help farmers move their crops to those international markets.
A soy checkoff-funded study titled “Farm to Market — A Soybean’s Journey from Field to Consumer” highlights the importance of keeping up with that maintenance. It also reveals potential problems with getting America’s soybean crop to market.
Here are five potential impacts of the deteriorating transportation system:
5. Lost access to roads, rivers and rails: With more and more soybeans destined for export, being able to get those soybeans from Point A to Point B and beyond is vital a soybean farmer’s profit potential. A failure at any point in the journey is almost certain to affect farmer profits.
A failure at any of five locks examined by the study, for instance, could cost farmers millions of dollars in lost revenue. Over the long haul, crushers, exporters, importers and, of course, soybean farmers are heavily dependent on a working network of roads, rivers and rails.
4. New opportunities wasted: A decade from now, U.S. soybean farmers could grow 11.5 million more acres of soybeans than they do today, according to the study. Meanwhile, China’s demand for soybeans is expected to double from 1.9 billion to 3.9 billion bushels. Those trends could lead to a 36 percent increase in railcar loadings and a 55 percent jump in barge loadings. That’s great news for U.S. soybean farmers — if the transportation system holds up.
3.Squandering advantages over South America: Soybean-producing countries in South America recognize they too need to make transportation improvements. Brazil has several proposed projects on the drawing board. If those improvements are made, experts say soybean farmers in Brazil and the United States will be on a level playing field when it comes to transportation costs.
According to the Farm to Market study, Brazil’s efforts have the potential to reduce freight costs by $1 to $1.63 per bushel. Such action could force a “price war” and U.S. soybean farmers might see their profits shrink.
2. Can’t capitalize on the Canal: When the expanded Panama Canal opens in 2014, it will accommodate larger “Panamax” vessels that can haul 300,000 more bushels of soybeans than the largest ships that cross the canal now.
The U.S. Army Corps of Engineers lacks the funding necessary to dredge sections of the lower Mississippi River and allow those ships to be fully loaded, meaning higher freight costs and a loss of potential profits for U.S. soybean farmers.
1. The impacts on our neighbors: Other U.S. industries, some of which are located in rural America, remain fully dependent on oilseeds and grain. These sectors benefit greatly from an efficient U.S. transportation infrastructure, too. The economic impacts of those industries — 1.5 million jobs, more than $352 billion in U.S. output and $41 billion in labor earnings — are felt throughout the U.S. economy.