Soy Transportation Coalition National Waterways Conference March 28, 2012.

Soy Transportation CoalitionNational Waterways Conference

March 28, 2012

Why Should Farmers Care About Transportation? …Because our international competitiveness depends on it.

Costs of transporting soybeans: U.S. vs. Brazil (per metric ton; 4th quarter, 2011)

Davenport, Iowa to Shanghai North Mato Grosso to Shanghai

Truck - $10.22 Truck - $115.05

Barge - $28.91 ---------

Ocean - $55.33 Ocean – $49.65

Total Trans - $94.46 Total Trans - $164.70

Farm Value - $425.00 Farm Value - $358.24

Landed Cost - $519.46 Landed Cost - $522.94

Trans. as % of Land. Cost – 18.18% Trans. as % of Land. Cost – 31.50%

Source: USDA

Why Should Farmers Care About Waterways? …Because farmer profitability is impacted by it.

The Soy Transportation Coalition – Farmer funded & farmer led Established in 2007. Comprised of 11 state soybean councils, the

United Soybean Board, American Soybean Association. National Grain & Feed Association & National Oilseed Processors: ex-officio members.

Panama Canal Expansion – Opportunity for increased efficiency, or are we shifting the bottleneck?

Pre Panama Canal Expansion (70 miles)

Post Panama Canal Expansion (111 miles)

Post Panama Canal Expansion (161 miles)

America’s Locks & Dams: A Ticking Time Bomb for Agriculture?Volume of Commodity Flows (2010) Illinois River

Grain: 24 million tons (20%) Coal: 13 million tons (11%) Petroleum: 19 million tons (16%)

Mississippi River Grain: 236 million tons (48%) Coal: 51 million tons (10%) Petroleum: 19 million tons (4%)

Ohio River Grain: 49 million tons (5%) Coal: 614 million tons (59%) Petroleum: 58 million tons (6%)

America’s Locks & Dams: A Ticking Time Bomb for Agriculture?

Cost to Agricultural Producers of Lock Closures

($ millions):Lock 2 Weeks 1 Month 3 Months 1

Year

LaGrange $2.7 $4.8 $21.2 $30.4

Lock 20 $2.8 $4.9 $15.4 $44

Lock 25 $2.8 $4.9 $15.4 $44.1

Markland $0.89 $1.02 $3.8 $4.9

Lock 52 $2.9 $3.1 $11.9 $13.9

America’s Locks & Dams: A Ticking Time Bomb for Agriculture?

Most affected districts by lock failure (both production & consumption)

LaGrange Illinois District #20

Reduction in corn prices: 7 cents per ton Reduction in soybean prices: $2.45 per ton Total cost to agriculture: $4.3 million

America’s Locks & Dams: A Ticking Time Bomb for Agriculture?

Lost Revenue to Barge Companies from Lock Closures ($ millions):

Lock 2 Weeks 1 Month 3 Months 1 Year

LaGrange $3.6 $5.6 $4.3$104

Lock 20 $5.1 $15 $33.3 $150

Lock 25 $5.1 $14.2 $32.4 $162

Markland $2.2 $4.7 $7.3 $11

Lock 52 $17.2 $26.1 $68 $71.5

Is it time to ask some tough questions?

Argument #1: How we allocate money is just as important as how much money we allocate. Comparison: U.S. lock & dam projects vs. foreign

examples Describe alternative funding mechanisms that

provide: 1.) Money up front & 2.) Greater certainty Explore potential for foreign investment

Is it time to ask some tough questions?

Argument #2: A predictably good inland waterway system is better than a hypothetically great one. Should we transition from a “build & expand”

approach to a “preserve & maintain” approach? Viability? What would that look like? Cost savings?

Thank YouSoy Transportation Coalition

1255 SW Prairie Trail Parkway

Ankeny, Iowa 50023

515-727-0665

515-251-8657 (fax)

www.soytransportation.org

Mike Steenhoek, Executive Director

[email protected]