COLUMBUS, Ohio — “Why care about agricultural transportation? Because our international competitiveness depends on it” – this was the theme of the speech Mike Steenhoek gave at the sixth annual Ohio Grain Farmers Symposium in Columbus earlier this month.

He is executive director of the Soy Transportation Coalition (STC) and was stressing the importance of ag transportation and how it affects the growers’ bottom line. “When your customer is half the way around the world, transportation becomes integral to one’s profitability,” he added.

According to Steenhoek, transportation of farm goods was not a top priority in the past as much ag production was consumed on or within close proximity to the farm. Now, he says, that outreach has become global.

“When you look at a field of soybeans you can assume that much of that won’t be consumed in the U.S. If you don’t have transportation, supply simply looks at demand, (and) they don’t meet,” he said. “That is why there is so much focus on roads and bridges, our freight system and our ports.”

Transportation efficiency translates into costs that matter for the bottom line of U.S. farms. In 2013, the cost to move a metric ton of soybeans from Davenport, Iowa, to Shanghai was $100.45. From Mato Grosso to Shanghai it was $150.79, Steenhoek said.

 “That 1,000-mile barge movement down to our export terminals on the lower Mississippi River accounts for 58 percent of our corn and soybean exports,” he explained. “The route from Davenport, Iowa, to the Pacific Northwest is No. 2 on the list and is about 25 percent of our exports. We need to get our products to our customers in a cost-effective manner and so much of this depends on our modes of transportation.”

Steenhoek said current U.S. transportation for agricultural products (by waterway, rail and interstate highways) is good, but could be better. “In Brazil, they have a 1,000-mile journey by truck to the port,” he said. “They do not have a very well developed inland waterway system.

“The Amazon River is the most navigation-friendly river on the planet, but they do not take advantage of it because it is not close to the best farmland.

“We are so fortunate to have the inland waterways systems that we do, that are really the envy of many other countries around the world. Brazil relies on the least efficient mode of transportation, which is the truck. You can clearly see the differential in transportation costs and that makes a big difference in customer cost.

“It is not about the cost of production, as they are fairly similar in the U.S. and in Brazil. Sometimes outcompeting the rest of the world can simply be a function of delivering. Other countries can produce quality soybeans as well. The secret to our success is simply getting that product to our customers in a cost-effective manner,” he said.

Steenhoek said the STC is looking at the logistics required in the future for U.S. agriculture to keep its competitive edge.

“We are heavily vested in our railroads, waterways and roads,” he said. “If we maintain a transportation system that can better serve agriculture, we are serving every industry in the United States. This issue is so important we developed the Soy Transportation Coalition that is farmer-funded and farmer-led. There has been some good news this year on the inland waterways, but there are still significant challenges and our system continues to degrade.”

The federal Water Resources Reform and Development Act was signed into law in June, which solidified significant funding for infrastructure. In addition, the barge tax included in the recent tax extenders legislation would provide another valuable revenue stream for improvements to waterways.

“That is a very favorable development that the barge industry has shown a lot of leadership on,” Steenhoek said. “They pay an inland waterway tax. The House and Senate passed this tax extenders legislation that increased that tax, which will generate about $36 million annually of new revenue going into the system.

“But how we allocate money is just as important as how much money we allocate. There is still a dramatic imbalance in the revenue and the expenses out there. We have to dramatically increase the revenue or dramatically reduce the costs. We have to make our dollars stretch farther.

“The United States has an erratic way of funding lock and dam projects, and work will start, and then work will stop, and then start again. We are trying to do these very expensive multiyear projects with short-term appropriation bills in Congress. This is a recipe for cost overruns and we will continue to see this unless we do a better job of allocating money. We need to provide the funding in a more rational way, like you do when you are managing your farms.”

According to Steenhoek, other key transportation issues in the future include roads and bridges, trucking laws, railroad shipping costs and the Panama Canal.

“The elephant in the room when it comes to transportation in this nation is we don’t have a sustainable way of financing our roads and bridges,” he said. “We have a fixed source of revenue trying to meet the needs of an escalating cost.”

Attendees heard more updates from the Ohio Corn and Wheat Growers Assoc., National Corn Growers Assoc., Ohio Soybean Assoc. and American Soybean Assoc.