THE U.S. has been able to play an integral role in meeting the world's needs for agricultural products due to our infrastructure system, but without continued investment, our competitive edge truly is at stake.
Already this winter, rail snarls in the U.S. created a backlog in fertilizer supplies, which is posing problems for farmers in the Upper Midwest. Grain shipments in Canada have been stalled due to increased rail demand from other commodities like potash and crude oil.
Farmers in North Dakota, South Dakota, Montana and Minnesota have been forced to hold onto large grain stocks as processors and local elevators face railcar shortages.
The inability to move grain is causing farmers to endure extra costs for shipping their grain by truck to distant markets; they are facing lower bids at commercial grain elevators due to delays and resulting penalties, and spring crops are being evaluated according to which will take up less bin space.
All in all, grain handling disruptions are having a major ripple effect in the agriculture economy.
A possible light in the darkness of transportation woes came with a formal announcement last week that the House and Senate had hammered out a conference agreement on the Water Resources Development Act (WRDA).
It has been seven years since Congress passed a waterway bill, and it couldn't come at a timelier juncture, with the Panama Canal requiring deeper channels to handle larger vessels.
Mike Steenhoek, executive director of the Soy Transportation Coalition (STC), explained that the high number of new members in Congress since the last WRDA has required extensive education from committee leaders, and soybean farmers' perspective was prominent in this educational process.
With the Panama Canal expansion scheduled to be completed in late 2015 or early 2016, it is imperative for U.S. ports and surrounding regions to be able to accommodate the larger ships that will be able to transit the wider canal. According to STC research, the canal expansion will allow an additional 500,000 bu. of soybeans to be loaded onto an oceangoing vessel — equivalent to $6-7 million of additional value per vessel.
"However, the Panama Canal expansion will be a missed opportunity for U.S. soybean shippers unless we are properly maintaining and improving our port regions. The likely additional funding from WRDA will help ensure this," Steenhoek said.
The National Grain & Feed Assn. (NGFA) also commended the conference committee for completing work on WRDA. The inland waterway system is indispensable in providing U.S. agriculture with an efficient and cost-effective means for transporting agricultural products to overseas markets and for importing fertilizer and other inputs that are essential for U.S. agricultural production.
"The waterways really are the gateway to how our nation helps feed the world," NGFA president Randy Gordon said. "Recent rail service disruptions have magnified and reinforced the importance of the United States having an 'all-of-the-above' transportation infrastructure policy that focuses on all modes — truck, rail, barge and vessel."
It seems like the conferees ironed out any potential deal derailments during debate. Now, it's just a matter of legislators sticking to the blueprint.