By DOUG SCHMITZ

Iowa Correspondent

ST. LOUIS, Mo. — The United Soybean Board (USB) has approved $2 million to help offset the planning, design, and research costs of deepening the lower Mississippi River from 45 to 50 feet near the Port of New Orleans.

“Our exploratory research on deepening the Mississippi River ship channel has the potential to improve global competitiveness and capabilities, which in turn makes it easier to deliver our product to customers and enhance farmer profitability,” said Keith Tapp, USB chair.

The current depth of 45 feet on the lower Mississippi is typically dredged to at least 47 feet to ensure the vessels do not hit the bottom of the riverbed. The 256-mile stretch of the river from Baton Rouge, La., to the Gulf of Mexico accounts for 60 percent of U.S. soybean exports, along with 59 percent of corn exports – by far the leading export region for both commodities.

According to the Soy Transportation Coalition (STC) in Ankeny, Iowa, “there is a growing effort among Mississippi River stakeholders, including agriculture, to promote the dredging of the lower river shipping channel from 45 feet to 50 feet in depth.”

A recent STC report concluded that deepening the channel will allow a load increase from 66,000 to 78,000 metric tons, saving upward of $20 per metric ton when loading greater volumes onto one ship. The report said a deeper river will allow both larger ships to be used, and current ships to be loaded with more revenue-producing freight.

The USB is allocating the $2 million to combine with approximately $21 million in federal funding and $7.5 million from the state of Louisiana to initiate the first year’s work of the project (i.e., commencing the deepening of the river from Venice, La., to the Gulf).

USB’s report added the savings are expected to translate to a margin of 13 cents per bushel for barge river elevators exporting soybeans and increase revenues by $461 million. STC officials said the change would increase the competitiveness of the leading export region for U.S. soybeans.

Mike Bellar, STC chair and a Howard, Kan., farmer, said, “During this challenging period, soybean farmers are being aggressive in trying to increase our competitiveness. The $2 million in funding from our national checkoff organization, the United Soybean Board, will help improve our No. 1 export region of U.S. soybeans.

“It will remain critical for the Soy Transportation Coalition, the American Soybean Association (ASA), and the individual state soybean associations to continue to promote this project at the federal and state level.”

STC officials said the overall project is estimated to cost $245 million and will occur in three phases, and the state of Louisiana has been designated as the obligated non-federal entity.

Dredging from Venice to the Gulf of Mexico: Removing this bottleneck would provide a 50-foot-deep channel to approximately Mile 154 of the river. A substantial number of soybean and grain export terminals are located within this portion.

The estimated cost of this phase is $100 million. Given a 75 percent federal and a 25 percent non-federal cost share, the federal obligation would be $75 million.

Dredging from Mile 154 to Baton Rouge (Mile 232): The remaining soybean and grain export terminals would be included in the 50-foot shipping channel upon completion of this phase. The estimated cost of this phase is $65 million; the 75 percent federal obligation would be $48.75 million.

Relocation of pipelines buried under the northern portion of the shipping channel: The estimated $80 million cost of doing so would be split evenly between the state of Louisiana and the pipeline owners.

The physical work to dredge the river would ultimately be paid by state (25 percent) and federal (75 percent) governments, and project work would begin after federal funding is secured. While Louisiana has provided its initial $7.5 million of matching funds, the federal government has yet to approve its estimated $21 million in initial funding.

What’s more, the STC, ASA, and several state soybean groups are also partnering to carry the project beyond the USB’s initial investment.

“The Mississippi River is the top exit spot for U.S. soy,” Tapp said. “Maintaining and expanding our international customers will require enhancing each link in the supply chain. This is a great example of the entire soy industry working together to reach a shared goal that carries significant benefits for all farmers.”