Dredging the Lower Mississippi River
Special thanks to Governor Parson for his support in this important step for farmers in Missouri and throughout the Midwest.
The current depth of the lower Mississippi River is 45 feet. At that depth, standard Panamax vessels are loaded to 66,000 metric tons — 70,000 metric tons max. Sometimes, the river is dredged to 47 feet, so vessels don’t hit the bottom. But even then, larger Panamax vessels can only be loaded to 77,000 metric tons.
The benefit of larger loads and lower freight costs touches many along the soy value chain, including farmers. In research made possible through the soybean checkoff, the United Soybean Board found U.S. farmers can expect an addition $461 million in revenue per year – paying farmers as much as 13 cents more per bushel of soybean.
What it Means for Missouri
Farmers in the Show-Me State can expect a boost of $34.9 million to their annual revenues. The map below shows how this added revenue breaks out for Missouri acres.
Governor Parson sees the importance of that increase, and has joined the Missouri Soybean Association in support of dredging, and of securing the federal funding necessary to capture that benefit for Missouri and other states connected to the Mississippi River and tributaries.
“Missouri and other states that export products such as soybean and corn rely upon this link to access the international marketplace,” Gov. Parson wrote in a letter to R.D. James, Assistant Secretary of the Army for Civil Works.
Deepening the Mississippi River Ship Channel is an investment that “will propel our country into the future,” Gov. Parson continued.
Farmers across the state can expect to see improvement in their basis after dredging the lower Mississippi River.
The draw area is the crop acres required to supply the export markets. Increasing to 78,000 metric tons per load will extend the draw area to 245 miles. Cash basis will improve 13 cents per bushel for 205 miles from the river and pay out less until 246 miles, impacting 72% of U.S. soybean production.
Brazil is dredging the Port of Santos canal to a depth of 49.2 feet and adding new terminals on both sides. Across northern Brazil, exports have increased from 1.6 million metric tons in 2002 to 15.4 million in 2015, with the potential of exceeding 60 million per year.
Since the Panama Canal expansion, it can now handle vessels loaded to 99,000 metric tons. Asian buyers continue to want larger volumes and the resulting lower freight rate. Six of the 10 largest ports in the world are in China and have drafts that exceed 50 feet, accommodating vessels in excess of 80,000 metric tons. Nine countries have the capability to harbor vessels carrying nearly 80,000 metric tons.