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From farm to market: St. Louis’ competitiveness, infrastructure impossible to separate

Barges from St. Louis carry billions of dollars worth of soybeans to the Gulf of Mexico for export

There’s no doubt the St. Louis area has played a big role in moving soybeans produced in Missouri and other nearby states into world markets. But maintaining that position is far from a sure thing.

Speakers at the recent Freightweek STL conference at America’s Center in downtown St. Louis emphasized that point. And while it may be next to impossible to overcome some of the factors involved, issues such as investing in infrastructure improvements and maintaining leadership in plant research are within the control of national, regional and local decision-makers.

Numbers tell much of the story, according to Brian Burke, who manages the St. Louis office of John Stewart & Associates, a grain trading/risk management firm. Soybean exports account for more than $24 billion in U.S. economic activity, with 60 percent of the volume going through St. Louis on the way to New Orleans for loading onto ships bound for destinations around the world, he noted.

World soybean trade is expected to grow 30 percent or more by 2027 as consumption of meat in developing countries continues to increase, Burke continued. Soybean meal is a major ingredient in feed for raising livestock, as well as in rations used in fish farming.

Brazil and Argentina already are capturing a bigger share of the global soybean market as they continue to expand production and invest in infrastructure projects needed to move their commodities to world markets, he added.

“The amount of U.S. land available for agriculture is relatively constant,” Burke said. “That’s not the case in many other nations. So, if we are going to remain competitive, we can’t do it by putting more land into production. We need infrastructure improvements to squeeze costs out of the system and be competitive that way.

“We may be able to get more production from an acre of land than other nations, but fragile logistics can quickly disrupt marketplace demand for our products.”

Dr. Eric Jessup, an agricultural economist and research professor at Washington State University, noted that prioritizing infrastructure improvements involves examining literally hundreds of projects. However, there’s no doubt the nation has not adequately invested in freight transportation improvements.

The seasonality of agriculture’s transportation needs makes decision-making more complex – raising questions about investing in facilities that may be used efficiently only for a comparatively brief time each year, Jessup observed.

Dave Jump, CEO of American Milling LP of Cahokia, Illinois, agreed with Jessup’s view of the difficulties of investment decisions involving assets used seasonally. The St. Louis area’s barge-loading capacity now is “in great shape,” Jump said. The problem is the infrastructure leading to those facilities has constraints.

St. Louis is blessed to be on the nation’s major inland waterway at a point where locks and dams are unnecessary all the way to the Gulf of Mexico, Jump said. Another asset is the emphasis on plant research found here and the gains in agricultural production stemming from those efforts. However, Jump questioned whether there is the political will for improving the locks and dams north of St. Louis, adding it may take some kind of catastrophic event affecting that infrastructure to change the situation.

Scott Sigman from the Illinois Soybean Association said the political picture Jump described stems at least in part from the fact that the nation’s soybeans, as well as other commodities, are produced by fewer farmers as farm numbers decline but individual farm operations become larger. With a smaller base of agricultural voters, there’s less pressure on politicians to maintain and improve the roads and bridges in the farm-to-market infrastructure, he concluded.

FreightWeek STL, an inaugural event by the St. Louis Regional Freightway, was a collaborative effort with the Inland Marine Expo [IMX] and the Institute for Trade and Transportation Studies to promote America’s freight industry.

The overall program featured a variety of speakers addressing topics of interest to the barge and freight transportation and agriculture industries. A tradeshow included more than 240 firms exhibiting their marine-related equipment, other goods and services.

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