Wednesday, October 19, 2016

Soybean Exporting

I came across an article about "Chinese buyers committed to purchase nearly $1.8 billion worth of U.S. soy, totaling 146 million bushels of U.S. soybeans." Six weeks later they signed contracts worth $2.1 billion. Total soybean exports are valued at $27.7 billion. The article mentioned the US Soybean Export Council. I studied it because I wanted to determine how the Iowa soybeans are shipped from Iowa to China. Do they go by railroads to the west coast or do they take advantage of the bigger Panama Canal and go by barge to the Gulf? I assume grain shipped to the west coast back-haul (empty) containers rather than use covered hoppers that are already at a premium because we have to "get rid of" three years of bumper crops. Do they tip the containers on their end so that they can poor the grain into the other end?

I did find a "transportation resource." But the percentages seem to be for rail+river even though they have separate graphics for each mode of transportation. The fact that twice as much soybeans leave the country through the gulf compared to the west coast indicates to me that a lot of the exporting is done with barges. I was surprised that only 2% leave through the Great Lakes. I know that Toledo alone has three big grain elevators for loading ships from trailroads: Cargill (managed by Andersons), Andersons, and ADM. Maybe when the grain reaches the Gulf, it is loaded into back-haul containers. That would help explain why the Great Lakes usage is low because their infrastructure is for bulk ships, not container ships. Going to Asia would be another reason. But the travel distance is more than competitive for Europe markets.


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