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Dakota Growers See Shipping Challenges, Opportunities

Dakota Growers See Shipping Challenges, Opportunities

Brazilian improvements in soybean transportation network show U.S. lock and dam shortcomings and expansion in Panama Canal will give Brazil a shorter route to China.

Two Dakota soybean growers were among a United Soybean Board delegation that toured Central and South America to take a look at how shipping and other developments in those countries might affect U.S. soybean farmer profit opportunities.

"We found a very well-managed Panama Canal," said Vanessa Kummer, a soybean farmer from Colfax, N.D. "The Panama Canal Authority has an aggressive expansion plan that should help improve our ability to move U.S. soy in larger ships to important international markets."

Panama took full control of the canal in 2000 after negotiating a treaty with the United States in the late 1970s. The critical, man-made waterway allows ships a short cut between the Atlantic and Pacific oceans. The canal expansion currently underway includes a third set of locks that will double the canal capacity and will make room for the transit of more cargo and larger shipping vessels by 2014.

The group also made four stops throughout Brazil evaluating private and public efforts to improve the second-largest soybean producing country's transportation infrastructure. Participants received a close-up view of the Hermasa grain terminal and soybean processing facility operated by The Maggi Group on the Amazon River in northern Brazil. Ocean-going vessels can travel deep into northern Brazil to the terminal, allowing more rapid transport of soy and other agricultural products to export markets. This would be similar to having ocean-going ships travel up the Mississippi River from the Port of New Orleans to St. Louis

 "The Brazilians don't need to worry about shallow sections in the Amazon River or passing ships and barges through locks," said Vickie Coughlin, a soybean farmer from Watertown, Wis. We need to be very seriously aware of what this potential is and renew efforts to improve our U.S. river systems and other sectors of our transportation infrastructure here in the United States if we want to remain competitive."

The study tour also examined this year's soybean harvest in Brazil, the conditions of rural roads and the status of rail transportation in Brazil with visits to farms in the north central and east central Brazilian states of Matto Grosso and Bahia. USB farmer-leaders had the opportunity to drive combines harvesting in fields 1.5 miles in length from end row to end row, inspect the condition of crops planted in one single 20,000 acre field and travel on roads jammed with trucks moving soybeans to ports.

"We visited four different large farms that have different business models," said Metz, a soybean farmer from West Brown Valley, S.D. "Some soybean yields weren't as good as expected. They have some other large challenges, too, such as borrowing capital, high interest rates, exchange rates and increasing labor costs. Income safety net programs such as crop insurance remain non-existent."

Brazil has been selected to host the 2014 World Cup soccer tournament and the 2016 Summer Olympic Games. Brazilians expect those two events to speed up transportation infrastructure improvements in their country. Government officials have said previously that the country still has the potential to put millions of acres of virgin land into agricultural production.

Source: United Soybean Board

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