Dredging the Mississippi
By: Brandelyn Twellman
The Mississippi River plays an essential role in delivering Missouri soybeans to export markets around the world. Checkoff-funded research executed by the United Soybean Board (USB) and Soy Transportation Coalition (STC) exposed the need to deepen a 256-mile stretch of the river between Baton Rouge, Louisiana, and the Gulf of Mexico.
At the Mississippi River’s current depth of 45 feet, standard Panamax vessels are loaded to around 66,000 metric tons. On occasion, the river is dredged to 47 feet so vessels don’t hit the bottom. At this depth, larger Panamax vessels can still only be loaded to 77,000 metric tons.
“The effort has been to see the river depth increase to 50 feet,” said Mike Steenhoek, executive director of STC. “That will allow you to load more revenue-producing freight per vessel. If you have a deeper channel, you have less of a likelihood of scraping the bottom so you can handle more freight. You can use larger ships, as well.”
At a depth 50 feet, vessels could be loaded to 80,000 metric tons. STC emphasized the importance of this particular 256-mile stretch of the river, as it accounts for 60 percent ofU.S. soy exports.
On July 31, the project was officially kicked off in a ceremony between the U.S. Army Corps of Engineers (USACE) and the governor of Louisiana. The dredging is to be completed by USACE and the Louisiana Department of Transportation.
Steenhoek said soybean farmers played a key role in taking this project from research to implementation through both advocating for the dredging and supporting it financially with checkoff dollars.
“The United Soybean Board and soybean farmers really stepped up to the plate and put their money where their mouth is to help improve the supply chain for the industry,” he explained.
The involvement and support of soybean farmers helped generate enthusiasm to push the project forward. Farmer leaders like Missouri’s Megan Kaiser were essential in showing both the interest in and need for deepening the river.
“The soybean industry made for a great case study and reason to deepen the Mississippi River,” said Louisiana Governor John Bel Edwards during the project’s kickoff ceremony. “Once this project is completed, the deepening of the Mississippi River will improve the global import and export of goods, and in turn, improve jobs, business and the quality of life for thousands of Louisianans and others who depend on the Mississippi River. I am grateful for our partnership and the commitment of time and money from the farming leaders of the United Soybean Board, the Soy Transportation Coalition, and countless others who have made this project possible.”
The Missouri Soybean Association (MSA) also participated as a catalyst
in garnering support for the dredging. From participating in Capitol Hill visits to securing a letter of support from Governor Parson, MSA and other state soybean associations helped move the needle forward on the policy side of the project.
Farmers can expect to see their efforts pay off in the near future.
“By fall of this year, we’ll see some of these vessels in the Mississippi River actually executing that project and actually scooping up dirt and depositing it off to the side, doing that channel deepening,” Steenhoek said.
This deepening is the first of three phases to be completed throughout the project. Phase one is anticipated to be complete by fall of 2021.
“This first phase involves deepening certain areas of the channel where sediment builds up,” Steenhoek explained. “Once they do that, we’ll have 154 miles of lower Mississippi River that is at a 50-foot water depth or greater.”
Since eleven of the fourteen soybean and grain export terminals are located within that 154-mile stretch, the majority of export facilities could benefit within the first year of the project.
Phases two and three tackle the river between mile marker 154 and Baton Rouge, Louisiana. Steenhoek said oil pipelines buried underneath the river complicate this portion of the project, which is projected to take two to three years.
Once complete, the new river depth will unlock long-term benefits for soybeans and other U.S. agricultural exports, according to USB.
How much of an impact can 5 feet make? The benefit of larger loads and lower freight costs touches many along the soy value chain, including farmers. USB and STC projected that dredging the river by 5 feet would save up to 13 cents per bushel of freight while increasing loads by 21 percent, or 500,000 bushels per ocean vessel.
“That improves the economics of our supply chain and makes U.S. soybeans more price competitive with other countries,” Steenhoek explained.
Projected savings estimate an additional $461 million in revenue to U.S. soybean farmers. Of that additional revenue, Missouri farmers are expected to experience a boost of $34.9 million annually.
“One of the concepts our research highlighted is that when farmers make a delivery of soybeans to a barge-loading facility on the Mississippi River, say near Hannibal, Missouri, that price is significantly impacted by how efficient transportation is after the delivery is made,” Steenhoek said. “If you make that transportation more cost-effective, that will reflect well on the price that farmers receive.”
Dredging the lower Mississippi River also increases global competitiveness by expanding its draw area, the geographic area around a river supplying soybeans for export.
“There are three transportation steps from a Missouri farm to a customer overseas,” Steenhoek explained. “There is first a truck movement, then there’s a barge movement down to the New Orleans area, and then there’s an ocean vessel movement.”
The thought is when step number three, the ocean vessel movement, becomes more economical, farmers will be more willing to incur costs on the first step, traveling further to market their soybeans. After the dredging, the draw area of the lower Mississippi River could extend from 150 miles to 247 miles.
Steenhoek believes investments like this project are necessary for growth.
“When you’re talking about a supply chain or transportation infrastructure, investment should not just be a one- time activity, it should be a perpetual activity,” he explained. “Great industries continue to invest in themselves.”
In this case, investment is helping to make the supply chain more cost- effective and reliable. The dredging will enhance access to customers and the competitive advantage of the export region as a whole.
Photo courtesy of the United Soybean Board and soy checkoff. The United Soybean Board contributed to this article. Find the entire October issue here.