Iowa governor encourages federal funding for dredging project10/17/2019 | Transportation, Economics
By Lauren Houska, ISA communications specialist
Iowa Gov. Kim Reynolds this week sent letters to Assistant Secretary of the Army for Civil Works R.D. James and Director of the Office of Management and Budget Mick Mulvaney in support of securing funding to deepen the lower Mississippi River.
“As a governor representing a state reliant upon our nation’s inland waterways system to maintain and enhance economic growth and competitiveness, I write to encourage your support in helping secure and direct federal funding to a specific infrastructure investment,” Reynolds wrote. “Doing so would provide significant benefit to Iowa and other states connected to the Mississippi River and Tributaries.”
This project could positively impact the profitability of Iowa’s soybean farmers.
Recent research conducted by the Soy Transportation Coalition (STC) 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.
The research also identifies the impact on interior basis — the difference between the local price a farmer receives and the market value established by the Chicago Board of Trade — for soybeans in 31 states if the lower Mississippi River shipping channel is dredged. The STC research estimates Iowa soybean farmers would receive $71 million and U.S. soybean farmers would receive $461 million in additional annual revenue due to dredging the lower Mississippi River to 50 feet.
Missouri Gov. Mike Parson and Kentucky Gov. Matt Bevin have also submitted letters of support. Additional letters of support are expected from governors whose states would be positively impacted.
In July 2019, the United Soybean Board announced a $2 million allocation, to be leveraged with $7.5 million in funding from the State of Louisiana, to help offset the planning, design, and research costs of deepening the lower Mississippi River from 45 feet to 50 feet. This is to be combined with approximately $21 million in initial funding from the federal government, which has yet to approve and direct the funds.
“Deepening the lower Mississippi River would significantly improve a key link in agriculture’s supply chain,” said Mike Steenhoek, executive director of the STC. Congress is making progress in providing the needed funding for the project.”
The key next step is to ensure funding is directed toward this specific project. The Assistant Secretary of the Army for Civil Works and the Office of Management and Budget are two critical decision makers in this process, Steenhoek said. The White House Office of Intergovernmental Affairs was also copied on the letters.
“We sincerely thank Governor Reynolds for continuing to advocate for Iowa’s soybean farmers,” said Steenhoek. “During this time of market uncertainty and anxiety, it is essential to explore and promote every opportunity to enhance the ability of Iowa soybean farmers to access international customers. We appreciate Governor Reynolds’ recognition of this and her willingness to encourage the federal government to make this project a priority.”
In her letters of support, Reynolds also pointed out that infrastructure investment is an opportunity to provide significant value during this period of uncertainty for those industries that rely on international markets.
“It is our hope that the United States will continue to demonstrate our ability to out compete the rest of the world,” Reynold wrote. “But to do so, we must strategically invest in our infrastructure. May deepening the Mississippi River Ship Channel be one of these investments that propels our country into the future.”
Contact Lauren Houska at email@example.com.
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