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Soy Transportation Coalition National Waterways Conference March 28, 2012

Soy Transportation Coalition National Waterways Conference March 28, 2012. Why Should Farmers Care About Transportation? … Because our international competitiveness depends on it. Costs of transporting soybeans: U.S. vs. Brazil (per metric ton; 4 th quarter, 2011)

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Soy Transportation Coalition National Waterways Conference March 28, 2012

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  1. Soy Transportation CoalitionNational Waterways ConferenceMarch 28, 2012

  2. Why Should Farmers Care About Transportation? …Because our international competitiveness depends on it. Costs of transporting soybeans: U.S. vs. Brazil (per metric ton; 4th quarter, 2011) Davenport, Iowa to ShanghaiNorth Mato Grosso to Shanghai Truck - $10.22 Truck - $115.05 Barge - $28.91 --------- Ocean - $55.33 Ocean – $49.65 Total Trans - $94.46 Total Trans - $164.70 Farm Value - $425.00 Farm Value - $358.24 Landed Cost - $519.46 Landed Cost - $522.94 Trans. as % of Land. Cost – 18.18% Trans. as % of Land. Cost – 31.50% Source: USDA

  3. Why Should Farmers Care About Waterways? …Because farmer profitability is impacted by it.

  4. The Soy Transportation Coalition – Farmer funded & farmer led • Established in 2007. Comprised of 11 state soybean councils, the United Soybean Board, American Soybean Association. National Grain & Feed Association & National Oilseed Processors: ex-officio members.

  5. Panama Canal Expansion – Opportunity for increased efficiency, or are we shifting the bottleneck?

  6. America’s Locks & Dams: A Ticking Time Bomb for Agriculture? Volume of Commodity Flows (2010) • Illinois River • Grain: 24 million tons (20%) • Coal: 13 million tons (11%) • Petroleum: 19 million tons (16%) • Mississippi River • Grain: 236 million tons (48%) • Coal: 51 million tons (10%) • Petroleum: 19 million tons (4%) • Ohio River • Grain: 49 million tons (5%) • Coal: 614 million tons (59%) • Petroleum: 58 million tons (6%)

  7. America’s Locks & Dams: A Ticking Time Bomb for Agriculture? Cost to Agricultural Producers of Lock Closures ($ millions): Lock2 Weeks1 Month3 Months1 Year LaGrange $2.7 $4.8 $21.2 $30.4 Lock 20 $2.8 $4.9 $15.4 $44 Lock 25 $2.8 $4.9 $15.4 $44.1 Markland $0.89 $1.02 $3.8 $4.9 Lock 52 $2.9 $3.1 $11.9 $13.9

  8. America’s Locks & Dams: A Ticking Time Bomb for Agriculture? Most affected districts by lock failure (both production & consumption) • LaGrange • Illinois District #20 • Reduction in corn prices: 7 cents per ton • Reduction in soybean prices: $2.45 per ton • Total cost to agriculture: $4.3 million

  9. America’s Locks & Dams: A Ticking Time Bomb for Agriculture? Lost Revenue to Barge Companies from Lock Closures ($ millions): Lock2 Weeks1 Month3 Months1 Year LaGrange $3.6 $5.6 $4.3 $104 Lock 20 $5.1 $15 $33.3 $150 Lock 25 $5.1 $14.2 $32.4 $162 Markland $2.2 $4.7 $7.3 $11 Lock 52 $17.2 $26.1 $68 $71.5

  10. Is it time to ask some tough questions? • Argument #1: How we allocate money is just as important as how much money we allocate. • Comparison: U.S. lock & dam projects vs. foreign examples • Describe alternative funding mechanisms that provide: 1.) Money up front & 2.) Greater certainty • Explore potential for foreign investment

  11. Is it time to ask some tough questions? • Argument #2: A predictably good inland waterway system is better than a hypothetically great one. • Should we transition from a “build & expand” approach to a “preserve & maintain” approach? Viability? What would that look like? Cost savings?

  12. Thank You Soy Transportation Coalition 1255 SW Prairie Trail Parkway Ankeny, Iowa 50023 515-727-0665 515-251-8657 (fax) www.soytransportation.org Mike Steenhoek, Executive Director msteenhoek@soytransportation.org

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