Soybean Farmers Invest In Lower Mississippi River

The United Soybean Board (USB) recently announced a $2 million allocation to help offset the planning, design, and research costs of deepening the Lower Mississippi River from 45 feet to 50 feet.

The 256-mile stretch of the Mississippi River from Baton Rouge, La., to the Gulf of Mexico accounts for 60 percent of U.S. soybean exports, along with 59 percent of corn exports. It is by far the leading export region for both commodities. There is a growing effort among Mississippi River stakeholders, including agriculture interests, to promote the dredging of the lower river shipping channel from 45 to 50 feet.

The overall project is estimated to cost $245 million and would occur in three phases.  Two of the phases will be cost-shared between the federal government (75 percent) and non-federal sources (25 percent).  The State of Louisiana has been designated as the obligated non-federal entity.

• Dredging from Venice, La. (approximately Mile 10 Above Head of Passes [AHP]) to the Gulf of Mexico.  Removing this bottleneck would provide a 50-ft. deep channel to approximately Mile 154 [AHP] of the river.  A substantial number of soybean and grain export terminals are located within this portion of the river.  The estimated cost of this phase is $100 million.  Given a 75% federal and a 25% non-federal cost share, the federal obligation would be $75 million, and the non-federal obligation would be $25 million.

• Dredging from Mile 154 AHP to Baton Rouge, La. (Mile 232 AHP).  The remaining soybean and grain export terminals would be included in the 50-ft. shipping channel upon completion of this phase.  The estimated cost of this phase is $65 million.  Given a 75% federal and a 25% non-federal cost share, the federal obligation would be $48.75 million, and the non-federal obligation would be $16.25 million.

• The relocation of pipelines buried under the northern portion of the shipping channel.  The estimated $80 million cost of doing so would be split evenly between the State of Louisiana and the pipeline owners.

The 73 USB farmer-directors are responsible for investing soybean checkoff funds to enhance the value and preference for U.S. soy.  USB is allocating the $2 million to help offset planning, design, and research costs, combined with approximately $21 million in federal funding and $7.5 million in funding from the State of Louisiana to initiate the first year’s work of the project (i.e. commencing the deepening of the river from Venice, La., to the Gulf of Mexico).  While the State of Louisiana has provided its initial $7.5 million allocation of matching funds, the federal government has yet to approve its approximately $21 million in initial funding.    

“During this challenging period, soybean farmers are being aggressive in trying to increase our competitiveness,” says Mike Bellar, a soybean farmer from Howard, Ks., and chairman of the Soy Transportation Coalition (STC).

“The $2 million in funding from our national checkoff organization, the United Soybean Board, will help improve our number one export region of U.S. soybeans.  It will remain critical for the Soy Transportation Coalition, the American Soybean Association, and the individual state soybean associations to continue to promote this project at the federal and state level.

“As U.S. soybean farmers continue to encounter challenges with both growing and marketing their crop, it remains essential to maintain and enhance the transportation system established to transport that crop.  U.S. soybean farmers are not only increasing the time and effort devoted to improving the competitiveness of their transportation network, they are also strategically investing resources to do so,” said Mike Steenhoek, executive director of the soy Transportation Coalition. 

Recent research conducted by the Soy Transportation Coalition concludes that shipping costs for soybeans from Mississippi Gulf export terminals would decline 13 cents per bushel ($5 per metric ton) if the lower Mississippi River is dredged to 50 feet.  A deeper river would allow both larger ships to be utilized, and current ships being utilized to be loaded with more revenue-producing freight.