By TIM ALEXANDER
Illinois Correspondent

ANKENY, Iowa — The United States must invest more to improve and expand vital transportation infrastructure such as roads, rails and rivers if the nation is to retain its international reputation as the home of the most economical transportation system for agricultural products in the world.

That’s according to Mike Steenhoek, executive director of the Soy Transportation Coalition (STC), who recently toured the Panama Canal expansion project along with other U.S. soybean officials and met with canal authority officials.

“Panama Canal Authority (PCA) officials are very anxious about the lack of or slow degree of investment by the U.S. in infrastructure,” reported Steenhoek, who spoke about the mid-December visit to the famous canal and what its ongoing, $5 billion upgrade could mean to the import and export of agricultural commodities worldwide.

“In 2010, 540 million bushels of U.S. soybeans transited the Panama Canal, the number-one U.S. ag commodity to utilize the canal,” Steenhoek said. “In the soybean industry, over half of the value of what soybean farmers produce is exported. It is essential for overall profitability to have a dependable global logistics chain that allows U.S. agriculture to remain competitive. We can produce 100 bushel-per-acre soybeans, but if you can’t get them (to customers) it really doesn’t matter.”

The trip hammered home the reality that the U.S. must act to improve its transportation system sooner, rather than later, the U.S. contingent concluded.
“It’s discouraging when you see other countries making aggressive investments in their infrastructure while we remain anemic in investing in our own,” noted Steenhoek. “The Panama Canal Authority are very enthusiastic about agriculture getting engaged in this issue and making the case for U.S. infrastructure investment.”

There are a number of practical measures the U.S can take to keep pace with infrastructure enhancements made by other countries such as Panama and Brazil, according to Steenhoek.

An increase in semi weight limits, a fuel tax on barges, rail capacity improvement tax credits for both rail companies and shippers, and funding for the dredging of U.S. ports would go a long way towards improving the U.S.’ transportation infrastructure, he said.

At stake is the U.S.’ position as the most efficient agriculture transportation system in the world, Steenhoek believes.

“We would no longer be the most economical choice on the international marketplace for our leading agricultural products,” said Steenhoek, citing USDA studies comparing the cost of shipping and production costs for a metric ton of soybeans from points in the U.S. to Shanghai and Hamburg to costs associated with shipping from Brazil to the same destinations.

“Despite lower production costs in Brazil, the ultimate price the customers pay is actually lower for the U.S. than Brazil – and the reason is due to our superior transportation system,” he explained. “Brazil recognizes this and they have aggressive plans to move forward investing in rail infrastructure, their road network and internal waterways. Even if one-fourth of their plans come to fruition, that’s going to do a lot to shave costs from the price customers ultimately pay.”

STC officials were able to tour the Panama Canal as part of their yearly meeting in Panama City. Previous yearly meetings have been held in port cities such as Seattle and New Orleans.

The Panama Canal project includes the construction for a new set of locks that will double the size of ships able to transit the canal. The project is expected to be completed in 2014, the 100th anniversary of the canal’s construction.
Panama Canal Authority coordinator of traffic projections, Maria Sanchez, told the visiting U.S. soybean officials that American investment in infrastructure will be key to preventing bottlenecks once the canal begins welcoming bigger vessels.

“The country of Panama is making a sizable investment to ensure that the Panama Canal remains a pivotal artery for the global logistics chain,” said Sanchez, in a prepared statement supplied by the STC. “We are hopeful that the United States – the leading user of the Panama Canal – will make the necessary investments in their own infrastructure to ensure the canal expansion will be of benefit to the U.S. economy and not a source of congestion. Given the importance of the canal to U.S. agricultural exports, we are encouraged to see soybean farmers become active in this important issue.”