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STC: U.S. grain ports must upgrade now

By Staff | May 9, 2011

WASHINGTON Leaders of the nation’s soybean organizations, port authorities and commodity groups heard a plea Monday that U.S. shipping ports need to upgrade their facilities before the Panama Canal expansion is completed by 2014, or lose its competitive advantage to other countries already making those upgrades.

At issue, said Philip Bradshaw, immediate past president of the Soy Transportation Coalition, is the $5.2 billion expansion of the Panama Canal that will facilitate bigger grain ships moving more quickly through the lock system.

Bradshaw, a soybean grower from Griggsville, Ill., told Farm News that after a 2010 visit to the canal system, he became convinced that the U.S. is not prepared to take full advantage of the expanded canal because of outdated port infrastructure.

He said that deep-water ports in the Gulf of Mexico and East Coast, which service ships going through the Panama Canal, plus bigger and faster loading capabilities was essential for the U.S. to retain its competitive edge over South America.

He said that Brazil has built the deep-water ports and is focusing on upgrading its road systems to get larger truck loads more quickly to export markets.

Argentina was reported in 2010 to have invested $650 in dredging to facilitate larger ships with deeper drafts.

The U.S., he added, has been slow in responding to the Panama development and stands to fall behind other nations that will be able load and ship grain to foreign ports more quickly in the larger ships.

Noting a 2010 study that said the world will have to double its supply of soybeans and soy protein products by 2050 to meet demands of a 9 billion world population, Bradshaw said that geneticists can get the increased yields, but it won’t be meaningful without a more efficient way to export the grain to end users.

He said if the U.S. fails to gear up to take advantage of the expanded canal, the U.S. will no longer be the preferred source of grain, especially soybeans, because lower loading and smaller ships will add cost for the end users, and, ultimately take income from growers’ pockets.

Bradshaw was scheduled to speak Monday in Washington, D.C. at a luncheon sponsored by the United Soybean Board and hosted by the STC, with commodity groups and port authorities in attendance. At the meeting is Alberto Alemn Zubieta, chief executive officer of the Panama Canal Authority.

In the past, Bradshaw said, soybean check off dollars have been spent to assist other port upgrades, most recently at Gray’s Harbor in Washington state. He implied other efforts may be offered other ports that utilize the canal. In 2009, the STC reported in March 2010, Gulf of Mexico ports shipped 36.8 million metric tons of grain through the Panama Canal – 57 percent of U.S. exported grain from those ports.

In March 2010, the STC reported that 19.12 percent of soybean costs to foreign buyers is in transportation when purchased from the U.S.; while in Brazil, that costs escalates to 30.1 percent due to the difficulty in getting grain to shipping ports.

As South America gears up its capabilities, Bradshaw said, transportation costs will drop from those countries, whittling the competitive edge the U.S. currently enjoys, if ports here do not take the needed steps to upgrade.

Contact Larry Kershner at (515) 5673-2141, Ext. 453 or at kersh@farm-news.com.

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