U.S. soybean farmers now have access to faster and more efficient waterway transportation when delivering U.S. soy to international end users, but investment in U.S. inland-waterway infrastructure is required to optimize these efficiency’s.
The long-awaited Panama Canal expansion opened, doubling the waterway’s capacity. The new, larger lane allows more freight to be loaded on each vessel, decreases transit time, and lowers transportation costs overall as compared with the original canal.
Transportation provides a competitive advantage. Transportation is not only necessary, it’s also a key aspect of the U.S. soy industry’s competitive advantage in the global marketplace. According to a soy-checkoff-funded study, foreign soy buyers often pay as much attention to the timeliness of deliveries as they do to the price. Currently, the U.S. transportation system supports the most efficient soy supply chain in the world, which provides the U.S. with a significant competitive advantage over South American soy suppliers.
While the expansion offers U.S. soy opportunities to capitalize on faster, more efficient shipping, it also offers those opportunities to many other countries, including U.S. soy’s biggest competitors: Brazil and Argentina. For U.S. soybean farmers to be able to fully capitalize on the expanded canal, domestic transportation infrastructure is in need of maintenance and repair to allow U.S. soy to be moved into export position. Improvements are needed to accommodate larger ships and the increased volume of commodities moving via U.S. inland waterways.
“We need to focus on improving our infrastructure, especially the locks and dams on our inland waterways,” says Mark Seib, a farmer-leader on both the United Soybean Board and Soy Transportation Coalition from Poseyville, Indiana. “Panama has done an excellent job of maintaining and improving its infrastructure for over 100 years, and it’s time to step up the work on ours.”
The Panama Canal is integral to the movement of soy. Approximately 600 million bushels of U.S. soybeans annually transit the Panama Canal, making soy the No. 1 U.S. agricultural commodity using the canal. In fact, 44 percent of total U.S. soy exports move through the canal. “The transportation of soy beyond the elevator is not something we soybean farmers usually see, but it is the backbone of our industry,” says Seib. “Without a reliable transportation connection between supply and demand, soybean farmers would not be able to deliver their crop to end users at home and abroad.”