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 efficiencies.
The long-awaited Panama Canal expansion opened today, 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. In fact, 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.”
Panama Canal moves soy exports
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.”
USB’s 70 farmer-directors work on behalf of all U.S. soybean farmers to achieve maximum value for their soy checkoff investments. These volunteers invest and leverage checkoff funds in programs and partnerships to drive soybean innovation beyond the bushel and increase preference for U.S. soy. That preference is based on U.S. soybean meal and oil quality and the sustainability of U.S. soybean farmers. As stipulated in the federal Soybean Promotion, Research and Consumer Information Act, the USDA Agricultural Marketing Service has oversight responsibilities for USB and the soy checkoff.