Soybean checkoff study finds that United States could lose global competitiveness
ST. LOUIS (Jan. 24, 2012) - Deteriorating condition of the U.S. lock and dam system puts the competiveness of U.S. soybean farmers at risk according to a study funded by the United Soybean Board's (USB's) and the soybean checkoff's Global Opportunities (GO) program. Entitled "America's Locks & Dams: A Ticking Time Bomb for Agriculture," the in-depth examination coordinated by the Soy Transportation Coalition (STC) found American farmers and consumers "...will suffer severe economic distress" if catastrophic U.S. lock or dam failures take place.
More than half of the structures that are part of the U.S. inland waterway system for river barge shipping exceed their 50-year usable lifespan, according to the soybean checkoff-funded report. More than one-third surpass 70 years of age, a concern because major rehabilitation is usually necessary to expand the typical lifespan from 50 to 75 years, according to the study.
"The GO committee invested in this study to calculate the impact of the worsening condition of the lock and dam system and what the impact would be on the rail and highway system if those locks failed," says Laura Foell, soybean farmer from Schaller, Iowa, and chair of the GO committee. "It is important for all in the industry and in the public sector to have the information necessary to make informed decisions when it comes to investing in our locks and dams."
Just on the Ohio River alone, the accumulated shipping delays at broken-down locks has more than tripled since 2000, rising from 25,000 hours to 80,000 annually. And that gets expensive. This study shows that a three-month lock closure would increase the cost of transporting 5.5 million tons of oilseeds and grain, the average shipped by barge during that period, by $71.6 million. A failure at any of the locks examined by the study could cost U.S. farmers up to $45 million in lost revenue.
The U.S. inland waterways represent key infrastructure for transporting U.S. soybeans. Up to 89 percent of soybeans exported through the lower Mississippi ports, such as the Port of New Orleans, arrive at those ports in barges that must transit multiple locks for the trip downstream.
The study, conducted by the Texas Transportation Institute at Texas A&M University, examined the condition of locks on the Upper Mississippi River, Illinois River and Ohio River. The study also calculated the economic impact of specific lock failures on districts within states, showing the effect on agricultural commodity prices?and on fertilizer and coal prices, which also depend on upstream river barge shipping.
"It is important that we have a robust transportation system," adds Foell. "Only by using a combination of the lock and dam system, rail system and truck system can we continue to move our products in a manner that will help us feed the world."
The USB GO program and STC, which is made up of USB, the American Soybean Association and 11 state soybean checkoff boards, plan to examine new and different ways to fund lock and dam and other rural transportation infrastructure improvements. USB made public and private investment in transportation infrastructure one of its top two priority issues.
USB is made up of 69 farmer-directors who oversee the investments of the soybean checkoff on behalf of all U.S. soybean farmers. Checkoff funds are invested in the areas of animal utilization, human utilization, industrial utilization, industry relations, market access and supply. As stipulated in the Soybean Promotion, Research and Consumer Information Act, USDA's Agricultural Marketing Service has oversight responsibilities for USB and the soybean checkoff.
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