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Soybean Checkoff looks to address transportation challengesWeather has been a challenge for many soybean producers this season, with heavy rains and flooding affecting much of the soybean-growing area. Besides the impact on soybean production, the weather has had additional effects on the transportation of soybeans. Even before the recent weather problems, the soybean checkoff began partnering with other soybean industry groups to investigate transportation challenges. With transportation becoming a more critical issue in the eyes of soybean farmers, the soybean checkoff decided to partner with the American Soybean Association and seven other state soybean associations to form the Soy Transportation Coalition. The states who are partnering include Illinois, Indiana, Iowa, Nebraska, North Dakota, Ohio and South Dakota. The National Grain & Feed Association and the National Oilseed Processors are ex-officio members of the organization. The STC partnership strives to provide information and education on behalf of the U.S. soybean industry on transportation issues to help enhance the global positioning and profitability of U.S. soybeans. This year's difficulties highlight the need for more industry cooperation to address transportation challenges. Flooding across the Midwest this year brought barge traffic to a standstill on many major rivers. The U.S. Army Corps of Engineers closed locks on many Midwestern rivers, including the Mississippi, while waiting for water levels to fall. This was a challenge for transporting soybeans, but it certainly wasn't the only one. Traditionally, U.S. transportation and infrastructure has given U.S. soybean farmers a competitive advantage, but transportation is increasingly becoming an obstacle to profitability for the soybean industry. Rail transportation is of particular concern. Railroad surcharges can be as high as $0.70 per car per mile. For a 110 car unit train transporting soybeans 1,800 miles to the Pacific Northwest, this can equate to $130,000 in fuel surcharges alone. "The reality is we export almost 50 percent of what we produce, and how we deliver it there really affects the local price we receive for our soybeans," says Joe Meyer, United Soybean Board Transportation Initiative Leadership Team member and a soybean farmer from Williamsburg, Ind. One area of concern for the checkoff is the impact that transportation issues play on the rising soybean basis. A checkoff-funded study found that rail shipping costs, service and capacity to transport U.S. soy prove to be the major reasons soy basis has widened in some parts of the United States and represents between 30 percent and 60 percent of soybean basis. "We need to fully grasp how much we're losing as a result of basis and the impact this is having on our local communities," says Roy Bardole, USB Transportation Initiative Team Lead and a soybean farmer from Rippey, Iowa. "Some shippers have shown a reluctance to challenge these issues, but as producers we must take them on." It's important for the soy industry to come together and work to resolve any transportation issues, and reduce the basis. While soybean prices are strong now, there is no indication basis will decrease when prices decrease, so it is important for organizations like the STC to work to resolve transportation issues as soon as possible. USB is made up of 68 farmer-directors who oversee the investments of the soybean checkoff on behalf of all U.S. soybean farmers. Checkoff funds are invested in the areas of animal utilization, human utilization, industrial utilization, industry relations, market access and supply. As stipulated in the Soybean Promotion, Research and Consumer Information Act, USDA's Agricultural Marketing Service has oversight responsibilities for USB and the soybean checkoff. 9/29/08 Date: 9/24/08
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