State of the Union address sparks transportation infrastructure discussion02/06/2019 | Soybean Exports, Transportation, Soybean News, Economics
President Donald Trump encouraged a bipartisan effort to address the needs of the nation’s multi-modal transportation system during Tuesday evening’s State of the Union address.
While industry leaders are appreciative of the inclusion of transportation infrastructure during the President’s remarks, they are hopeful that this intention will translate to tangible outcomes — and soon.
“It is time for infrastructure to move from the on-deck circle to the batter’s box,” said Mike Steenhoek, executive director of the Soy Transportation Coalition (STC).
As the nation increasingly examines and explores the need to enhance our multi-modal transportation system, many suggestions from policymakers and constituents have been long on ambition but short on specifics, Steenhoek explained.
There is also concern that the transportation interests of urban areas in terms of urban congestion or long commute times could exclude the important interests of rural areas. While those are most certainly frustrating realities for many Americans that should be addressed, elected leaders must also be attentive to addressing the challenges of moving freight, including agricultural freight.
Given the current anxiety and challenges confronting agriculture as a whole — and the soybean industry in particular — the federal government has been exploring opportunities to moderate the negative consequences being experienced by farmers. Devoting resources and effort towards transportation infrastructure will not eliminate all the challenges confronting the industry, Steenhoek explained, but it can certainly chip away at it.
“We encourage the President and Congress to enhance not just the transportation needs of urban America, but also the needs of rural America,” Steenhoek concluded.
Taking advantage of the national highlight, the Soy Transportation Coalition (STC) released its “Top 10 Most Wanted List” of infrastructure priorities.
- Maintenance & rehabilitation of locks & dams to significantly reduce the potential for unexpected, widespread, & prolonged failure. Priority should be devoted to ensuring the reliability of locks & dams along the nation’s inland waterways.
- Dredging the lower Mississippi River between Baton Rouge, Louisiana, to the Gulf of Mexico to 50 ft.
- Ensuring the Columbia River shipping channel from Portland, Oregon, to the Pacific Ocean is maintained at no less than 43 ft.
- Permit six axle, 91,000 lbs. semis to operate on the interstate highway system.
- Increase the federal fuel tax by ten cents a gallon & index the tax to inflation. Ensure rural areas receive proportionate, sufficient funding from the fuel tax increase.
- Provide greater predictability & reliability of funding for the locks & dams along the inland waterway system.
- Provide block grants to states to replace the top twenty most critical rural bridges.
- Provide grants to states to implement rural bridge load testing projects to more accurately diagnose which bridges are sufficient & which bridges are deficient.
- Ensure full utilization of the Harbor Maintenance Trust Fund for port improvement initiatives.
- Permanent (or at least multi-year) extension of the short line railroad tax credit.
Additional context on some of these priorities, provided by Steenhoek:
Dredging the lower Mississippi River (#2)
The 256-mile stretch of the Mississippi River from Baton Rouge, Louisiana, to the Gulf of Mexico accounts for 60 percent of U.S. soybean exports, along with 59 percent of corn exports – by far the leading export region for both commodities. There is a growing effort among Mississippi River stakeholders, including agriculture, to promote the dredging of the lower river shipping channel from 45 ft. to 50 ft. in depth. Recent Soy Transportation Coalition research highlights 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 ft. A deeper river will allow both larger ships to be utilized and current ships being utilized to be loaded with more revenue-producing freight.
The Soy Transportation Coalition research further estimates farmers in the 31 evaluated states will annually receive an additional $461 million for their soybeans due to a more favorable basis resulting from dredging the lower Mississippi River to 50 ft.
Increase federal fuel tax by 10 cents & index to inflation (#5)
Permit six axle, 91,000 lbs. semis to operate on the interstate highway system (#4)
Example: Grain elevator annually handling 6 million bushels (4 million bushels of corn + 2 million bushels of soybeans).
Utilizing 80,000 lbs. semis, the above grain elevator would require 4,149 trips for corn and 2,222 trips for soybeans. Total trips = 6,371. If the delivery location for the grain handler is 25 miles or 50 miles roundtrip, 318,550 miles would be driven.
Utilizing a 6 axle, 91,000 lbs. semis, the same grain elevator would require 3,603 trips for corn and 1,928 trips for soybeans. Total trips = 5,531. If the delivery location for the grain handler is 25 miles or 50 miles roundtrip, 276,550 miles would be driven.
Therefore, a single elevator handling the same number of bushels would annually have to incur 840 additional trips – driving 42,000 additional miles – if utilizing a 5 axle, 80,000 lbs. semi compared to a 6 axle, 91,000 lbs. semi. Using a conservative $1.25 cost per mile to operate the semi, the grain elevator utilizing a 5 axle, 80,000 lbs. semi would have to spend $52,500 more annually to transport the same number of bushels.
In addition to the above efficiency gains, research affirms that the additional, sixth axle enhances motorist safety and diminishes infrastructure wear and tear.
Replacing posted or restricted rural bridges (#7 & 8)
The U.S. Federal Highway Administration currently has a grant program focused on replacing rural bridges throughout the country. We need more of this type of effort. We hope a comprehensive infrastructure bill will attend to the condition of our rural roads and bridges. A closed or restricted bridge can often result in a five mile detour (ten miles roundtrip). Replacing these rural bridges and eliminating these detours can save a farmer $1,500 or more a year.
Maintaining and replacing the locks and dams (#1 & 6)
In 2013, Congress allocated $4.7 billion to the Army Corps of Engineers’ Civil Works Program – the account responsible for maintaining and improving our nation’s locks and dams. The current appropriations bill allocated $6.9 billion – a 47% increase over five years. Congress and the Administration need to build on this momentum in order to provide a well-maintained system of locks and dams. A failure at one or more of these sites would have severe consequences on the competitiveness of the American farmer.
Contact Mike Steenhoek at email@example.com.
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