Panama Canal Expansion Presents Opportunities for U.S. Soybeans

A soybean checkoff-funded study predicts a future expanded shipping lane at the Panama Canal will more than double the area of the United States in which inland waterway transportation is economically viable.  The study, developed by the Soy Transportation Coalition and the United Soybean Board, was performed by Informa Economics, a research and analysis firm based in Memphis, Tennessee.  

The Panama Canal, originally completed in 1914, is in the process of a major expansion that will result in a larger, third shipping lane, including a new set of locks, that will roughly double the size of ships that can transit this key artery of global commerce.  The expansion project, scheduled to be completed in 2014, will: 

• Expand the average area that draws U.S. soy and grain to inland waterways for barge transportation to central Gulf of Mexico ports from 70 miles to 152 miles.
• Increase the total volume of U.S. soybeans and grain moving through the Panama Canal to export markets by 30 percent.
• Result in an approximate 35 cents per bushel savings for elevators within the range of central Gulf of Mexico ports, provided that area shipping channels will be dredged to the federally mandated depth of 45 feet to handle larger ships capable of moving through the expanded Panama Canal.
• Allow each vessel to accommodate 13,300 additional metric tons (488,642 additional bushels) of soybeans.  This amounts to approximately $6 million in additional value per loaded vessel.  

“The checkoff-funded research demonstrates that many areas of the country that heretofore could not benefit from the efficiencies of inland waterway transportation will soon be able to have a commercially viable alternative to meeting customer demands,” explains Mike Steenhoek, executive director of the Soy Transportation Coalition.  “We have learned through this research that increased transportation efficiencies will result from the Panama Canal expansion.  However, it is incumbent upon the United States to make sure we are investing in our own infrastructure.  Otherwise, the opportunities provided by the canal expansion will not be fully realized.”  

In 2010, 540 million bushels of U.S. soybeans were shipped through the canal – the number one agricultural commodity to utilize the canal.  

To access the full report, visit the Soy Transportation Coalition website at www.soytransportation.org or the United Soybean Board website at www.unitedsoybean.org.