America’s soybean farmers have been hit with a double whammy over the last two years: first, as part of a tariff war, primary customer China cut its U.S. soybean purchases almost to zero; and then this year’s record-long-duration flooding has made it just about impossible to move cargo on the rivers for much of the year.
The United Soybean Board, though, is out to prove that American farmers are up to whatever challenges they encounter. On July 10, the board announced it would allocate $2 million to enhance the Mississippi River as a transportation corridor. Specifically, the board, using money from soybean checkoff funds, will help fund the planning, design and research costs of deepening the Lower Mississippi River from Baton Rouge, La., to the Gulf of Mexico from 45 feet to 50 feet. That stretch of the river accounts for 60 percent of U.S. soybean exports, along with 59 percent of corn exports.
The board’s allocation will be used along with about $21 million in federal funding and $7.5 million from the state of Louisiana to initiate the first year of the project, which is expected to cost a total of $245 million in three phases. In announcing the allocation, the board noted that although Louisiana has provided its share of the matching funds, the federal government has yet to approve its $21 million in initial funding.
The soybean board is aggressively working to increase the competitiveness of U.S. soybeans. Data in the board’s announcement proves that the $2 million allocation is a good bet. Recent research conducted by the Soy Transportation Coalition indicates that shipping costs for soybeans from Mississippi Gulf export terminals would decline by 13 cents per bushel, or $5 per metric ton, if the Lower Mississippi is dredged to 50 feet, as deeper ships could make the trip to the grain elevators in that stretch, and existing ships could be loaded more efficiently.
And although the lower transportation costs would primarily benefit those farmers closest to the river, the pricing effects would extend well inland, with the increased modal competition between rail and barge. The research indicates that farmers in Illinois alone would receive about $77 million more annually for their soybean crop. The total for all 31 states evaluated would be an annual benefit of some $461 million, the coalition said.
The benefits of first-class waterway transportation system are clear, and America’s soybean farmers have indicated they’re willing to fight for it.