| New 7-state soybean coalition turns its focus to U.S. transportation expenses |
|
|
|
| By LINDA McGURK
Indiana Correspondent
DECATUR, Ill. — Higher grain prices and increasing input costs have been getting attention in the farm community lately, but the cost of insufficient infrastructure probably isn’t on most soybean growers’ radar.
There are many reasons why it should be, according to the newly-formed Soy Transportation Coalition (STC).
“The U.S. transportation system has historically been an advantage (for American farmers), but now it’s becoming an obstacle to profitability,” said Mike Steenhoek, executive director of the STC, during a presentation at the Farm Progress Show in Decatur, Ill., last week.
With more trains traversing the country, loaded with iPods, toys and other consumer goods from China, it’s becoming increasingly difficult for rural areas to access railroad services, and STC estimates that freight demand will increase another 50-70 percent over the next decade. As a result of growing demand, railroad companies have upped their fees without increasing service, which in turn affects the spread between the price farmers could potentially receive at their local elevator and the price they’re actually getting.
According to the STC, transportation alone is costing farmers $1-$2 per bushel of soybeans. “We’ve seen this spread grow, especially the past year. The question is how much money is not retained in rural areas because of this,” said Steenhoek.
He added the cost of transportation is already threatening American exports. “Our soybeans are being priced out of the market and we blame that on transportation costs,” he said. “We’re no longer competitive in the Philippines, which has always been a faithful customer of ours. We need to preserve our export markets, and that’s one of the reasons why farmers should care (about infrastructure).”
The Farm Progress Show marked the official launch of STC, which was started by seven state and two national soybean associations. Charter members include the Illinois Soybean Assoc., the Indiana Soybean Alliance, the Iowa Soybean Assoc., the Nebraska Soybean Board, the North Dakota Soybean Council, the Ohio Soybean Council, the South Dakota Soybean Research and Promotion Council, the American Soybean Assoc. and the United Soybean Board.
The STC board of directors will also have ex-officio members from the National Grain and Feed Assoc. and the National Oilseed Processors Assoc.
“Ultimately, what we want to do is to make sure the soybean industry has a seat at the table when important decisions are made on transportation issues,” said Steenhoek.
STC plans to work with government agencies as well as the private sector to encourage increased funding for transportation and make sure the money is “more wisely spent.” Steenhoek pointed out the United States spends only approximately one percent of its GDP on infrastructure, while China spends nine percent.
The organization will also push for giving shipping groups, such as the soybean industry, more influence in the regulatory process, which it now believes favors the railroad industry.
“The question is not whether we can produce the best soybeans in the world, because we can,” said Steenhoek. “And the question is not whether the customers want to buy them, because they do. The question is whether we can do it at a cost that won’t price us out of the market.”
This farm news was published in the Sept. 5, 2007 issue of Farm World, serving Indiana, Ohio, Illinois, Kentucky, Michigan and Tennessee. |
| 9/5/2007 |
|
