Infrastructure improvements top STC agenda02/27/2020 | Transportation, Economics
By Bethany Baratta, ISA senior writer
Being competitive in a global market isn’t just about having a superior product. It’s also about being able to deliver the product—soybeans—in a cost-effective, timely manner. One very important component of product delivery is adequate infrastructure.
A recent decision from the U.S. Army Corps of Engineers to include a dredging project in its 2020 work plan is a step toward realizing a more cost-effective, efficient shipping system on the Mississippi River.
“It’s finally coming to fruition,” said Robb Ewoldt, an Iowa Soybean Association (ISA) director and board member for the Soy Transportation Coalition (STC). The STC met earlier this week in San Antonio just ahead of the Commodity Classic.
The $245 million dredging project would deepen a 256-mile stretch of the lower Mississippi River from 45 feet to 50 feet, allowing heavier vessels to pass through the channel.
An Informa Economics IEG study shows dredging the stretch will result in Iowa soybean farmers receiving more than $71 million more for their soybean crop per year.
That’s big for Iowa soybean farmers, Ewoldt said.
“In this time when finances are tight this is a little bit of light,” he said. “If we can get another 8- to 10-cents per bushel, hey, we’ll take it.”
In his area, just four miles north of the Mississippi River, the study showed a 10- to 12-cent basis improvement because of the savings on transportation costs going to Asia, Europe and other markets.
Research from Informa Economics IEG shows that shipping costs for soybeans from Mississippi Gulf export terminals would decline 13 cents per bushel if the lower Mississippi River is dredged to 50 feet. A deeper river will allow both larger ships and current ships to be loaded with more revenue-producing freight, according to STC. The 256-mile region accounts for 60% of U.S. soybean exports and 59% of U.S. corn exports.
“This project will allow us to load vessels with 500,000 additional bushels of soybeans per vessel,” Steenhoek said. “That’s going to improve the economics of our industry and enhance our competitiveness.”
Steenhoek said the first phase of the project, dredging a 150-mile stretch from Venice, Louisiana, to the Gulf of Mexico, is expected to commence this fall.
Soy products in infrastructure improvement
Among a whole host of topics discussed during the STC’s board meeting was the use of soy-based products used in infrastructure improvements.
One example is the bio-based asphalt product created at Iowa State University with an initial investment from the Iowa Soybean Association and the United Soybean Board. The product uses high-oleic soybean oil as a polymer to create an asphalt product. It’s currently being tested on roads in seven states, and proving successful at a national test track in Alabama.
“It’s something that I, as a director, take great pride in,” Ewoldt said. “When farmers in my district ask how I’m helping to build demand and increase soybean prices, I can point to this project, which all started with an investment of Checkoff dollars. Now we have something that’s about ready to come to market.”
Other soy-based products used to seal concrete, like Pore Shield , and to seal asphalt, like RePLAY® Agricultural Oil Seal and Preservation Agent, are also critical to infrastructure and building demand for U.S. soybeans, Steenhoek said. And while the STC largely leaves new product research and advertisement up to the United Soybean Board and state soybean organizations, building awareness of the products during the STC board meeting helps spread the information about the technologies, he said.
“We realize that if there is all of this innovation occurring with soy-based products and we have interactions with the U.S. Department of Transportation, state departments of transportation and county engineers, we would be very remiss if we didn’t try to capitalize on that,” Steenhoek said.
About the STC
Comprised of 13 state soybean boards which account for 85% of U.S. soybean production, the Soy Transportation Coalition is focused on ways to make U.S. soybean growers and industry partners more competitive in the global market. The American Soybean Association and the United Soybean Board are also part of the STC board; the National Grain and Feed Association and the National Oilseed Processors Association serve as ex-officio members on the Soy Transportation Coalition's board.
Contact Bethany Baratta at firstname.lastname@example.org.
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