Soy transportation coalition
1 / 18

Soy Transportation Coalition Overview The Transportation ... - PowerPoint PPT Presentation

  • Updated On :

Soy Transportation Coalition Overview The Transportation Challenge Establishing the Soy Transportation Coalition Action Steps Questions/Feedback The Transportation Challenge

Related searches for Soy Transportation Coalition Overview The Transportation ...

I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
Download Presentation

PowerPoint Slideshow about 'Soy Transportation Coalition Overview The Transportation ...' - emily

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.

- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript

Overview l.jpg

  • The Transportation Challenge

  • Establishing the Soy Transportation Coalition

  • Action Steps

  • Questions/Feedback

The transportation challenge l.jpg
The Transportation Challenge

  • The U.S. transportation infrastructure – heretofore a facilitator of economic growth & a source of competitive advantage in both the domestic & international marketplace – is increasingly an obstacle to profitability for the agricultural sector, in general, & the soybean industry, in particular.

  • Rail transportation is of particular concern

Why should the u s soybean industry be concerned about transportation l.jpg
Why Should the U.S. Soybean Industry Be Concerned About Transportation?

  • Export markets are becoming less favorable for U.S. soybean products

  • Reduced prices for farmers at original point of sale – increasingly due to domestic transportation costs

The transportation challenge escalating rates costs l.jpg
The Transportation Challenge: Escalating Rates & Costs Transportation?

  • National Grain & Feed Association (NGFA) estimates that over the last 3 years, 43% of grain & oilseed shipments & 28% of soybean meal & oil were moved at rates exceeding 180% of variable costs of the rail companies.

    “(BNSF’s) earnings were up more than 25% last year (2006), thanks in part to a 15% boost in freight revenue – 2/3 of which came from price increases. CSX revenue grew 8% last year, & the company estimates that 60% of that came from price increases.” (MSN Money)

  • No accessible, cost-effective option for shippers to challenge excessive rates (Surface Transportation Board – established an excessive threshold)

  • In addition to rates, costs are increasingly shifted onto rail shippers

    Tonnage carried by railcar ownership: 1987 2004

    Privately owned 40% 60%

    Railroad owned 60% 40%

The transportation challenge declining service l.jpg
The Transportation Challenge: Declining Service Transportation?

  • Soybean producing regions are experiencing an abundance of rail traffic, but a scarcity of rail service.

    • Growing percentage of rail transit occurs via 100+ car unit trains from the West Coast to urban centers with few stops en route – increasingly difficult for rural areas to access service

    • Due to inherent challenges facing agriculture (i.e. - seasonality of demand, high volume/low value shipping, diverse points of origin), rail companies are less enthused to service the industry

The transportation challenge infrastructure limitations l.jpg
The Transportation Challenge: Infrastructure Limitations Transportation?

  • Freight demand – expected to increase 67% over next decade (Source: Informa Economics)

  • Railroads in the U.S. are primarily funded via private investments. Highways & waterways are funded with public funds

  • Stock market – discourages rail infrastructure investments; encourages rate increases

The transportation challenge8 l.jpg
The Transportation Challenge Transportation?

  • Railroads understand & are taking advantage of their elevated negotiating position resulting from:

    • Trade with China & India – increasing volume of goods to be shipped from West Coast ports to rest of the country

    • High oil prices – greater use & transportation of coal

    • Lack of investment in nation’s interior waterways

    • Trucking (main competitor) – hurt by high fuel costs, driver shortages, limits on amount of time behind the wheel, weight thresholds, & limits on highway & road construction

The transportation challenge9 l.jpg
The Transportation Challenge Transportation?

Question – If our nation’s highway & county road system was developed & maintained according to the same guidelines as our freight rail system, how many soybean crushers, elevators, & biodiesel plants would have access to quality roads?

Establishing the soy transportation coalition l.jpg
Establishing the Soy Transportation Coalition Transportation?

  • As transportation concerns continued to become more acute, a group of soy industry leaders (QSSBs, USB, ASA, NOPA, NGFA) decided to discuss how to address them (August 2006 – December 2006)

  • Decision was made to establish a formal organization – Soy Transportation Coalition (STC) - & hire an Executive Director (February 2007)

Establishing the soy transportation coalition11 l.jpg
Establishing the Soy Transportation Coalition Transportation?

  • The STC has been established as a legal entity (bylaws, articles of incorporation, etc.)

    • Board of Directors – 10-15 members from participating QSSBs & ASA; 5 ex-officio members from USB; NGFA & NOPA leadership – ex-officio members

  • Goal of STC – Position soybean industry stakeholders to benefit from a transportation system that delivers cost effective, reliable, & competitive service.

Action steps to be a credible voice on the transportation debate the stc needs to l.jpg
Action Steps – Transportation?To be a credible voice on the transportation debate, the STC needs to:

  • Wrap our arms around the issue/Be a respected source of information

    • Accumulate data from processors, biodiesel plants, etc. in order to quantify & increasingly document both problems (rates, service, etc.) & attitudes about transportation issues. Be able to sort by state &, possibly, by congressional district.

    • Continue to assemble specific anecdotes & experiences of transportation concerns & hardships from each state (processors, biodiesel, elevators, etc.)

    • Assemble U.S. vs. overseas transportation infrastructure data & anecdotes – illustrating how U.S. agriculture’s competitive advantage is decreasing with time.

    • Translate transportation concerns & constraints into tangible per bushel costs for farmers & lost revenue for a rural community. Farmers are the only ones who can’t “pass the buck.”

Action steps to be a credible voice on the transportation debate the stc needs to13 l.jpg
Action Steps – Transportation?To be a credible voice on the transportation debate, the STC needs to:

  • Educate our membership

    • Soybean industry publications

    • Agricultural & transportation focused media outlets

    • In person visits to each state (board meetings, local chambers of commerce, local media, etc.)

  • Collaborate with other agricultural groups & industries (including railroads when appropriate)

  • Develop relationships with Congress, Surface Transportation Board, USDA, etc. – ensuring that STC’s positions & messages are increasingly penetrating the overall transportation debate (education, not lobbying)

Potential questions l.jpg
Potential Questions… Transportation?

  • Why establish a group specific to soybeans? Are we reinventing the wheel?

    • For any significant change to occur, the farmer/producer community must be educated, engaged, & motivated (no longer solely relegated to industry). Agricultural groups are either the best of advocates or the worst of advocates – completely a function of how engaged the membership is.

    • Network of producers & extensive relationships with other industries puts the soybean industry in a unique position to shape the overall debate & affect positive change.

Potential questions15 l.jpg
Potential Questions… Transportation?

  • Why establish a group specific to soybeans? Are we reinventing the wheel? (cont’d)

    • Other industries are engaged (sources of collaboration), but their prescribed transportation system may not mirror ours.

    • Improving our transportation infrastructure will not result from one single champion on behalf of all industries. It will result from a collaboration of many actively engaged organizations.

    • Neglecting the issue would be a disservice to the farmers/producers. Our organizations have a track record of being advocates for those issues that are important to members (farm bills, exports, etc.). Given the importance of transportation issues – our organizations cannot respond by being passive or deferring to other groups.

Potential questions16 l.jpg
Potential Questions… Transportation?

  • Can anything of significance be accomplished to improve the transportation climate for the soybean industry? Yes!

    • By the end of 2007, the STC will have:

      • Identified on a more comprehensive level the rate & service challenges facing the soybean industry

      • Raised the awareness level of transportation issues among our producer community throughout the country

      • Developed collaborative relationships with other agricultural groups & effected industries

      • Developed relationships with transportation decision makers (Congress, Surface Transportation Board, USDA)

        Will provide the foundation for the STC to move forward & leverage our voice for needed change.

Conclusion l.jpg
Conclusion Transportation?

  • Our political leaders, the national media, & the general public regularly articulate many goals & objectives that involve the soybean industry:

    • Decreasing reliance on Middle East oil

    • Decreasing our foreign trade imbalance

    • Revitalizing rural America

  • Transportation is a linchpin to each of these goals. Without an coherent, integrated transportation system, these intentions will never become outcomes.

  • The Soy Transportation Coalition can greatly assist this effort &, in the process, provide a valuable service to our industry.

Thank you l.jpg
Thank you! Transportation?

Mike Steenhoek, Executive Director

Soy Transportation Coalition

4554 114th Street

Urbandale, Iowa 50322


515-251-8657 (fax)

[email protected]