A possible light amongst the darkness from the ongoing transportation woes came in this week’s formal announcement that the House and Senate had hammered out a conference agreement on the Water Resources Development Act.
Already this winter we saw that rail snarls in the U.S. have created a backlog in fertilizer supplies, which is posing problems for farmers in the upper Midwest. Grain shipments in Canada have been stalled due to increased rail traffic from other commodities like potash and crude oil.
Farmers in North Dakota, South Dakota, Montana and Minnesota have been forced to hold onto large grains stocks as processors and local elevators face rail shortages.
The inability to move grain is causing farmers to endure extra costs for shipping by truck to distant markets, they are facing lower bids at commercial grain elevators due to delays and resulting penalties, and spring crops are being evaluated as to which crops will take up less bin space. All-in-all, grain handling disruptions are causing a major ripple in the agriculture economy.
It’s been seven years since the waterways blueprint bill has been passed, and it couldn’t come at a timelier juncture with the Panama Canal requiring deeper channels to handle larger vessels in the next two years.
Soybean growers have made their case heard in the ongoing infrastructure debate. Mike Steenhoek, executive director of the Soybean Transportation Coalition, explained the high number of new members to Congress since the last bill has required extensive education from committee leaders, and the soybean farmer perspective was prominent in this education process.
With the expansion of the Panama Canal scheduled to be completed in late 2015 to early 2016, it is imperative for U.S. port regions to be able to accommodate the larger ships that will be able to transit the larger canal. According to STC’s research, the Panama Canal expansion will result in an additional 500,000 bushels of soybeans being loaded onto an ocean vessel. This is the equivalent of $6 million to $7 million of additional value per vessel.
“However, the Panama Canal expansion will be a missed opportunity for U.S. soybean shippers unless we are properly maintaining and improving our port regions. The likely additional funding from WRDA will help ensure this,” Steenhoek said.
The National Grain and Feed Association (NGFA) also commended the WRRDA conference committee for completing work on this crucial legislation. This nation’s inland waterways system is indispensable in providing U.S. agriculture with an efficient and cost-effective means for transporting agricultural products to overseas markets, and for importing fertilizer and other essential farm inputs essential for U.S. agricultural production.
“The waterways really are the gateway to how our nation helps feed the world,” said NGFA President Randy Gordon. “And recent rail service disruptions have magnified and reinforced the importance of the United States having an ‘all-of-the-above’ transportation infrastructure policy that focuses on all modes – truck, rail, barge and vessel.”
It seems the conferees ironed out any potential deal derailments during conferencing the bill. Now it’s just a matter of legislators continuing to stick to the blueprint and help keep U.S. agriculture competitive and provide a way for U.S. agricultural goods to get to those around the world who need it.