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More Options, More Opportunities: Diversifying the Soy Supply Chain

The infrastructure that takes your soy from the farm to the feed trough is going deeper and farther than it ever has before — literally. Your soy checkoff is investing in projects to optimize the transportation channels that support soybean exports, facilitating trade to meet the ever-growing demand for your crop.

Setting Sail on the St. Lawrence Seaway

The St. Lawrence Seaway reaches 2,340 miles from the Atlantic Ocean to the head of the Great Lakes in Duluth, Minnesota, and currently carries less than 2% of U.S. soybean exports. A recent agreement between the Soy Transportation Coalition (STC) and the St. Lawrence Seaway Management Corporation (SLSMC) incentivizes more agricultural shippers to use the route through SLSMC’s Gateway Incentive Program.

As demand for soybeans continues to grow around the world, supply chain stakeholders need options to meet demand quickly and efficiently. This agreement aims to increase options and supply chain resiliency by reducing shipping tolls on new shipments of soybeans and agricultural freight via the St. Lawrence Seaway by 50% during the 2021 shipping season. For the soy checkoff, strategic partnerships like this one ensure U.S. soy continues to benefit from the country’s top-notch infrastructure system.

“The soy checkoff invests farmer contributions into a lot of different projects, including the Soy Transportation Coalition. Then the STC goes out and finds out what’s needed to improve infrastructure for soybeans,” says North Dakota soybean farmer Jay Myers.

Soy checkoff farmer-leaders sit on the STC board as ex-officio members, in addition to members from 13 state soybean boards and the American Soybean Association. In addition to the soy checkoff’s own investments in infrastructure improvement and expansion research, membership in the STC allows for additional collaboration, creating more opportunities to prioritize soybean farmers and soybean production.

“We need to work together because the money for the investments comes in part from the checkoff, and STC identifies the areas of infrastructure that need to be improved,” says Myers.

Myers serves as a soy checkoff farmer-leader and represents the soy checkoff on the STC. He says the agreement with SLSMC helps shippers diversify their export options, which maintains and grows the competitive advantage U.S. Soy enjoys when it comes to efficient, timely and sustainable deliveries to buyers.

“This agreement is important because it keeps ships moving and creates additional shipping options,” Myers says. “If the St. Lawrence Seaway can get ships moving in that direction by offering discounts on shipments of soybeans, that provides soybean shippers with more options to get soybeans where they need to go.”

This agreement is especially beneficial for growers like Myers in the northern U.S., whose soybeans usually face a much longer journey before they make it on a ship to be exported.

“For those of us up here in the tri-state area of North Dakota, South Dakota and Minnesota, our beans have to either go west out to the Pacific Northwest, up and out through the Great Lakes or down through the Mississippi River system,” Myers says. “This is an option for exports that’s a little closer to home for us.”

The partnership between STC and the St. Lawrence Seaway represented by this agreement is good news for both parties, providing new export options for U.S. soy and incentivizing new business for the Seaway as well, according to Bruce Hodgson, director of market development for SLSMC.

“Agriculture and the Seaway have a long and mutually beneficial relationship,” Hodgson says. “By signing an agreement with the Soy Transportation Coalition for our Gateway Incentive Program, we hope to build on this relationship by demonstrating the numerous benefits and advantages the Seaway can provide to U.S. farmers.”

Digging Deep in the Mississippi

Farmers also rely heavily on the Mississippi River to connect them to the global market. The checkoff, in service of its goal to keep more dollars in your pocket, took a look into the feasibility of a cost-savings measure that has really panned out: increasing efficiency by making physical changes to the lower Mississippi River. A dredging effort there aims to increase the depth of the lower Mississippi from 45 to 50 feet, allowing larger ships to pass through areas like the Port of New Orleans. This increases opportunities for international export of U.S. soybeans.

Five feet can really make a difference. Research commissioned by the STC shows that deepening the draft of the lower Mississippi River from 45 to 50 feet will provide over $461 million in increased revenue to soybean farmers.

The project enables soybeans to hit the market in higher quantities in more cost-effective shipments that will accommodate larger global ports with shipment volumes of over 80,000 metric tons, compared with the initial depth, which could only accommodate 66,000 metric tons.

Checkoff research uncovered the threat to the U.S. competitive advantage in this area, as nine other export countries were already equipped to harbor vessels carrying nearly 80,000 metric tons. Farmers like Myers know investments, such as research to show the impact of dredging the lower Mississippi, are crucial to meet international demand for soybeans.

“Projects like this benefit all soybean farmers, because they allow for more efficient transportation to move a higher volume of soybeans down the river at a lower cost, which in turn leads to more profit for farmers,” Myers says.

Learn more about the soy checkoff’s investments in infrastructure, and check out The Soy Hopper for more supply chain content.

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