Mississippi River project approved, more corn and soybean export capacity expected
Farmers rely on many variables to make a living, which include factors they can and can’t control.
One of those variables that is essential to having an efficient and effective agriculture industry is infrastructure. Sometimes it may go overlooked or isn’t thought of enough, but an infrastructure development was released on Monday.
The U.S. Army Corps of Engineers (USACE) provided Congress with its Work Plan for the Army Civil Works program, covering the 2020 fiscal year.
"The funding in the Army Civil Works FY 2020 Work Plan will continue to develop and maintain American water-related infrastructure, which provides safety and economic growth for our nation. This funding also invests in the partnership between local communities and the Corps that develop, manage, restore, and protect our water resources," said The Honorable R. D. James, Assistant Secretary of the Army for Civil Works, in a release.
The plan includes a handful of different projects and studies, but an important focus for farmers will be put on the Missouri Basin with the “Lower Missouri Basin Flood Risk and Resiliency Study” that includes four Corn Belt states, along with the plan to deepen the Mobile Harbor in Alabama and the Mississippi River Ship Channel from Baton Rouge to the Gulf in Louisiana.
The area receiving the dredging to increase the river’s depth from 45 feet to 50 feet runs about 256 miles, according to the USACE, an area that’s used for 60% of the U.S. soybean exports and 59% of corn.
The 5-foot increase in depth projects to cost $245 million with a three-part process. The first two parts are funded from 75% of federal support and 25% nonfederal support.
Part 1: The project includes dredging in Venice, Louisiana, to the Gulf of Mexico. The cost is estimated at $100 million.
Part 2: From that point, the project covers north to Baton Rouge, Louisiana. The projected cost for this sits at $65 million.
Part 3: The project requires pipelines under the northern part of the channel need relocated. This part estimates to run $80 million that will be paid equally between Louisiana and the owners of the pipelines.
Year one of the project has costs distributed between the federal government, Louisiana, and the United Soybean Board (USB). In July, the USB chipped in $2 million to assist with the planning and research costs associated with the project. The first year will use that $2 million and combine it with $7.5 million from Louisiana and $21 million from the federal government.
Louisiana has added its share, but the federal government still needs to approve its portion of the funding, according to the USACE.
While the region where the Mississippi River will increase in depth isn’t located in the Midwest, it should benefit Corn Belt farmers.
The increased depth of the river should allow for larger barges or barges with increased carrying capacity. The Soy Transportation Coalition (STC) projects a rise from 2.4 million bushels of soybeans on an average barge to 2.9 million bushels – an almost 21% climb.
STC research also pegs savings at 13¢ per soybean bushel after the river is dredged deeper. STC expects states closer to the river to benefit the most, but with added competition, states leaning on rail could see better prices, too.
Nationally, President Donald Trump noted the importance of infrastructure in the U.S. during his State of the Union address earlier this month, saying investment is needed in roads, bridges, and tunnels.
“We must also rebuild America’s infrastructure,” says Trump, according to the Associated Press’s transcript.
Along with the 2020 plan, the President’s Fiscal 2021 Budget was released for the USACE on Monday, too.
The total budget comes in at $5.967 billion that’s broken up into nine different categories. Notably, $210 million is distributed to the Mississippi River and Tributaries, and $77 million is provided for Flood Control and Coastal Emergencies.
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