Catastrophic failures would impact profitability

by | Jul 22, 2013 | Audio, News

America’s neglected and crumbling transportation infrastructure is about to get some attention.

To put the issue in context, the American Society of Civil Engineers rates America’s inland waterway with a D-minus on its hypothetical report card.
That grade is based on an average 52 service interruptions daily throughout the inland waterways system, along with the decades required to complete repair or replacement projects.

In late July, USDA and several ag transportation groups will hold a summit in Chicago to explore options to improve inland waterways, along with the rest of the U.S. transportation infrastructure.

Executive Director with the Soy Transportation Coalition, Mike Steenhoek, says a catastrophic failure is only a matter of time. If a failure were to happen during harvest season, the window of opportunity in which 80% of soybean exports leave the country between September and February, he says farmer profitability would take a direct hit.

Hypothetical though that scenario may be, Steenhoek says Hurricane Katrina in 2005 gave farmers a good idea of what to expect should strategic location be taken out of service for a month or two.

One of the things that we saw with Hurricane Katrina in 2005 is, when you had all of those ports shut down in southern Louisiana, all of a sudden the price that farmers were offered a thousand miles away in places like Iowa and other states in the Midwest, it really decreased.
Farmer profitability is not just a function of the quality of soybeans or corn – what farmers produce – it’s also a function of the ability to deliver it, and when you have an interruption of service, it has an impact on the amount of money in a farmer’s wallet.

Steenhook adds that the goal of the summit is to provide some creativity, which along with funding, is lacking in Congress. He says possible fixes could be as simple as abandoning new locks and dams and focusing funds on maintenance efforts, or adding another axle to trucks in order to expand storage capacity.