Towing Vessels

Report: Inland Waterways vital to U.S. farmers

  • 1.  Report: Inland Waterways vital to U.S. farmers

    Posted 16 days ago

    The U.S. Department of Agriculture has published an analysis of t he benefits that U.S. farmers receive from our national transportation system – and in particular the inland waterways system.  It found that "U.S. farmers have enjoyed a competitive advantage accessing the global export market in larger part due to an effective, robust and resilient infrastructure and transportation network."  In addition it found that "The U.S. economy depends on farmers using the inland waterways system to maintain a competitive position in the global export marketplace."

    EXECUTIVE SUMMARY

    • U.S. farmers have enjoyed a competitive advantage accessing the global export market in larger part due to an effective, robust and resilient infrastructure and transportation network. ¦
      • S. corn and soybean farmers produce abundant quantities of competitively priced crops.
      • The inland waterways system carries large volumes of bulk commodities and farm inputs, such as fertilizer, over long distances mainly for export or import, and is of vital importance to numerous industries. In 2017, 532.8 million tons of domestic barge traffic worth $220 billion moved on the system.
      • The Mississippi River System is America's primary inland waterways system. It comprises the Mississippi, Arkansas, Illinois, Ohio, and Tennessee Rivers, and Gulf Intracoastal Waterway. This extensive waterway system feeds exports from grain elevators from Baton Rouge through New Orleans, to Myrtle Grove, LA. This region which handles 57 percent of U.S. corn exports in volume (valued at $4.8 billion) and 59 percent of U.S. soybean exports ($12.4 billion), as well as 55 percent of soybean meal exports and 72 percent of distiller's dried grains with solubles (DDGS) exports.
      • Due to its efficiencies and lower costs, the inland waterwayssystem saves between $7 billion and $9 billion annually over the cost of shipping by other modes.
      • The infrastructure, however, is aging and needs major rehabilitation and construction to restore it to its full capability and forestall major disruptions, while providing opportunities for growth.
    • The U.S. economy depends on farmers using the inland waterways system to maintain a competitive position in the global export marketplace, with agricultural exports providing a significant positive contribution to the U.S. balance of trade.
    • In 2016, the total economic contribution of the waterways system resulted in employment of nearly 256,000 jobs and $27.2 billion in Gross Domestic Product (GDP).
      • Every $1 of output of waterways activity results in another $1.89 in economic activity across the U.S.
    • Historically, barge traffic has grown, but lagging infrastructure maintenance and improvement needs have resulted in more frequent delays, with the percentage of vessels delayed increasing from 35 percent in 2010 to 49 percent in 2017. Delays can cost up to $739 per hour for an average tow, amounting to more than $44 million per year.
      • The added costs associated with delays are ultimately borne by shippers, especially farmers, who will pay more (and in the case of farmers, get a lower price) for goods shipped on the inland waterways system. Higher costs also reduce the competitiveness of the river system.
      • Without consistent, predictable funding, the grain and soybean export draw area around the waterways system could shrink from an average of 150 miles, currently, to as little as 75 miles under a constrained scenario, as the cost to ship on the river increases. For corn, delays on the Mississippi River could have up to a $0.24 per bushel impact. The impact to soybeans could be up to $0.25 per bushel.

    The complete report can be found at this link:  Report on Inland Waterways and Agriculture