Transportation challenges post-Ida relates to infrastructure needs

Sep 10, 2021  | 7 min  | Ep4704

Much of the floodwater from Hurricane Ida has receded - but the damage is done. High water contributed to dozens of deaths and the winds knocked down transmission lines that feed the New Orleans area.

At the end of the grain super highway - the ports in southern Louisiana are trying to get back to receiving corn and soybeans via the Mississippi River.

Those in the Grain Belt, like Mike Steenhoek of the Soy Transportation Coalition, have been monitoring the situation closely. My conversation with Steenhoek on Ida and infrastructure is the subject of our Cover Story.

 

Mike Steenhoek, Soy Transportation Coalition:  “Well, the real big concern is when you've got a pretty seismic weather event in the Gulf of Mexico, right when our harvest season is coming online, so you've got all of this volume that soybean farmers and grain farmers are producing, you've got robust demand, particularly International. But then you've got this area of the country called the Lower Mississippi river that accounts for 61% of us soybean exports 58% of corn exports, by far the number one launching point for both commodities. And so all of a sudden, if you have a disruption at that area, supply and demand Connect, can't connect, and they just look at each other and the transaction will never occur. So that's the real concern, particularly as hurricane can see season can certainly extend into the fall when our harvest comes online. And our export program really elevates.

Paul Yeager: Severity is one thing, is there a location from a Grain Belt perspective that causes more concern than another?

Mike Steenhoek, Soy Transportation Coalition: Well, you just look at our, launching points for these, commodities like soybeans, which is the number one ag export from the United States. So you look at the Lower Mississippi River, which is number one, we've got 14 soybean and grain export facilities that are located along that stretch of the river, from Baton Rouge, Louisiana, past New Orleans into the Gulf of Mexico. So unfortunately, that's also an area that's that's, that's suspect for hurricane activity. So you can have these kinds of disruptions. It is clearly that the profitability of farmers in the Midwest is so strongly linked to how functional our export capacity is on the Lower Mississippi River. So it's very important for someone like me to be well acquainted with it. So even before the hurricane hit, the big concerns that I had are, yes, the facilities themselves the storage facilities, but it's the conveyance system that links the storage facilities that ultimately is used for loading an ocean vessel. That's the that's the more fragile elements of these export facilities that are along the Lower Mississippi River.

Paul Yeager: It's just not cheap to do either. And that's the hard thing to remember. Whether I'm writing a check to a checkoff, which is lobbying on behalf of a certain bill, or maybe I'm having a premium cut off of my grain sold so that we can expand it, someone has to eventually pay for it, if we're going to continue to use it,

Mike Steenhoek, Soy Transportation Coalition: When it comes to actually paying for it. It is expensive. But that makes it more incumbent upon us to make sure that we're articulating the cost benefit. So there's the cost side, how big of a check, you have to write to build a new road bridge lock, whatever it may be. But there are benefits to that. And that is the competitiveness of the American farmer. And all the ripple effects that result from that, you know, one of the things I like to  underscore is, some industries create the ripple effect, other industries ride the ripple effect. And I think the best example of an industry that's like the stone getting dropped into a pond of water that creates the ripple effect is farming. And you think about the, it's not an accident that we've got all of these industries in the state of Iowa, that flourish and exist in the first place. Because there's a group of farmers that plant a seed in the spring and they harvested in the fall. And because that that activity occurs, there's all these other industries like rural lending, manufacturing, see technology, all of these industries that would not exist if it wasn't for the farmer. So that's all part of that story. We need to tell that. Yes, infrastructure is expensive, but the benefits exceed that. And that's why it merits our attention.

Paul Yeager: Did Ida highlight the biggest vulnerability and that's the port in New Orleans? Or is there another one that we need to worry about even more?

Mike Steenhoek: Soy Transportation Coalition: It really highlighted? Because so much volume goes out of that area? How seismic, the problem would be if you had wholesale disruption there. Hurricane Katrina presented that to us 16 years ago, you know, there were farmers in the Midwest that all of a sudden saw the price that they were offered at point of sale in the middle of the country, 1000 miles from New Orleans, all of a sudden their price declined, not because their supply had diminished in quality. And not because there were no there was no longer demand. But just all of a sudden the supply chain wasn't operating as it normally would be. And the whole phenomenon with agriculture is you've got these barge loading facilities on the inland waterway system like the Mississippi River. And if these facilities can't move products out their back door, because say the port of South Louisiana is closed by New Orleans, then those facilities will not be willing to accept products via their front door because they can't move it out. And so what they do is they'll drop the price that they offer to farmers. And so you know my mind immediately turns when you see these export regions close, or say even the same phenomenon can happen is if you have an unexpected closure at a lock on the inland waterway system is all of a sudden that translates to less money in a farmer's wallet. So it has real relevance to an individual farmer.

Paul Yeager: What's the biggest priority for your organization as we is it become less trying to figure out this infrastructure bill? Is it something else? What's the biggest priority in the next six months for you?

Mike Steenhoek. Soy Transportation Coalition: Well, it's, you know, all of the above is kind of a scapegoat kind of question. But it really is true, you know, when you look at the journey from the farm, to the ultimate customer, internationally, it's comprised of a number of links, and you're always only as strong as your weakest link. And so there are challenges with our rural road and bridge inventory, our inland waterway system, our ports, you know, I always try to keep in mind that if your supply chain if, if each link in your supply chain is made out of stainless steel, but only one of them is made out of a twisty tie, then you don't have an effective supply chain, even if most of the links are strong. So you have to be attentive to each of those links in the supply chain. So for us to do our job appropriately, we're going to be very attentive to rural roads and bridges and the inland waterway system and our ports. And the the moment we focus disproportionately on one, then the danger is that one of those other links could become the twisty tie, and then you don't have an effective supply chain.

Paul Yeager: Alright, Mike Steen, appreciate the time. Thank you so much.

Mike Steenhoek: Hey, thanks for having me.

The full interview will be available Tuesday through our YouTube and MtoM podcast feed.

 

Contact: Paul.Yeager@iowapbs.org

 

 

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