With the help of government infrastructure funding farmers hope to increase effectiveness associated with moving their soybeans on barges. Moving soybeans by barge continues to be the most cost effective way to get the commodity to world markets. (Photo: Joseph L. Murphy/Iowa Soybean Association)
Infrastructure investments give U.S. competitive advantage
October 8, 2020 | Bethany Baratta
By Bethany Baratta, ISA senior writer
American Soybean Association (ASA) Director of Government Affairs Alexa Combelic and Soy Transportation Coalition (STC) Executive Director Mike Steenhoek recently took part in a conversation focusing on transportation infrastructure priorities. Agri-Pulse editor and publisher Sara Wyant hosted the discussion.
Infrastructure policy priorities
Combelic says the top ASA priority in transportation infrastructure legislation is the Water Resources Development Act (WRDA), especially as it relates to the change in cost-share ratio for Inland Waterways Trust Fund projects. ASA supports a 65/35 split in funding; 65% of funding would come from the federal general funds and 35% from the Inland Waterways Trust Fund, funded by a barge fuel tax.
Since 2014, this standalone, 2-year bill has been passed every 2 years. The lower Mississippi River dredging project is an example of how cost-share ratios that increase federal responsibility can positively affect project prioritization.
The House and Senate appear to agree on a change in funding formulas and have begun larger WRDA negotiations in earnest, Combelic says. The House bill has passed; the Senate’s bill is out of committee but hasn’t reached the floor yet. Combelic says “fingers crossed” it makes it to the floor yet this year.
A commitment of federal funding to infrastructure project sends a signal that the United States is open for business.
“Moving products by barge is the most fuel efficient and cost-effective way to get products to market,” Combelic says. “It’s that transportation cost that keeps the United States competitive on the global market.”
The 2015 Fixing Surface Transportation (FAST) Act was not reauthorized by its expiration of Sept. 30, but it was extended for 1 year. The 1-year extension doesn’t provide the certainty a 5-year authorization provides, Combelic says.
“State departments of transportation can’t do multi-year major infrastructure planning projects without reliable funding ahead of time,” Combelic says.
The missed target comes at a time when the Highway Trust Fund, which funds surface transportation projects through a federal gas tax, is anticipated to hit a funding shortfall because of the significant decrease in travel and commutes amid the Covid-19 global pandemic.
“Farmers will definitely have a seat at the table through the Highway bill negotiations,” Combelic says. “Soybeans spend their first and last 10 to 20 miles to the market on a truck, which is the least fuel-efficient mode of transportation compared to rail, barge and ocean vessel. If we can make that 10 to 20 miles more efficient, it continues to make us more competitive on the global market.”
Combelic says ASA has its sights on the goals of FY 2021 appropriations bills, particularly looking at funding opportunities for rural road and bridge projects and additional funding for the U.S. Army Corps of Engineers for planning and design projects on inland waterways. However, the election results and corresponding presidents’ priorities and budget will determine ongoing ASA strategy and federal asks.
Lower Mississippi River dredging
Nearly 60% of the United States’ soybean crop is exported to partners around the world, making investments in infrastructure critical, said Mike Steenhoek, executive director of the Soy Transportation Coalition (STC).
“Having a transportation system that is economical that can take advantage of economies of scale is critical to our success,” Steenhoek said.
The dredging project on the lower Mississippi River is one project that will do just that. Deepening the 256-mile stretch of the Mississippi River from Baton Rouge, Louisiana, to the Gulf of Mexico, will allow an additional 500,000 bushels of soybeans per vessel on each ship.
“That’s going to be really key in improving the economics of shipping,” Steenhoek said. There are 14 soybean and grain export terminals on the lower Mississippi River terminal between Baton Rouge and the Gulf of Mexico, 11 of which are located in the first phase of the project.
This area accounts for 60% of U.S. soybean exports and 59% of U.S. corn exports, the leading export region for both commodities.
Missouri River port investment
A recent investment in Blencoe, Iowa, along the Missouri River has the opportunity to expand shipments of soybeans and other valuable commodities to markets around the world. NEW Cooperative broke ground on the Port of Blencoe last month.
The Iowa Soybean Association’s (ISA) board of directors earlier this year approved an investment of $49,525 toward the engineering, design and plan development expenses required to allow construction of the facility to commence.
Soybean shipments are expected out of the port yet this fall. Steenhoek said the port could encourage other states to follow suit in port investments along the river.
“As they’re successful in the months and years to come, I’m excited about seeing Eastern Nebraska farmers ask the question, ‘If it’s (exports) happening in Blencoe, why can’t it happen here?’ And Eastern Kansas farmers ask, ‘If it’s happening in Blencoe, why can’t it happen here?’ ”
The decrease in driving due to Covid-19 resulted in unexpected and a significant decrease in fuel tax revenues, Steenhoek said. This means not only less funding for federal projects, but less money available to fix or replace local rural infrastructure like bridges.
STC not only wants to help find solutions to fix rural infrastructure, they are cognizant of the costs associated with infrastructure improvements. With this in mind, the STC will soon be publishing a guide to help county engineers and departments of transportation think about bridge repair creatively and cost effectively.
Thirteen bridge engineers across the 13 STC partner states are selecting the concepts which will be featured in the guide. The innovations selected for the guide will result in significant cost savings, at least a 25% savings for each concept, Steenhoek says. The ideas presented will also be widely accessible options across rural America.
Ten of the ides to be presented in the guide will focus on bridge replacement; 10 ideas will explore concepts around bridge repair.
Steenhoek says there are usually hang-ups at the local level when deciding which rural bridges or roads should be a priority. The challenge, he said, is evaluating use.
For example, meters can count tires that drive over a section of a road or bridge to determine which roads are most utilized. But rural roads are also main thoroughfares when farmers bring harvested crops to the cooperatives.
“What’s greater use? Ten cars or two semis transporting 900 bushels of soybeans and the fact that the delivery creates an economic ripple effect providing benefits to the broader community?” Steenhoek said. “We have to make sure there’s an appropriate way of defining use. Those are some difficult discussions at the local level.”
Listen or watch the discussion here.
Contact Bethany Baratta at email@example.com.