university extension/department of economics grain transportation infrastructure pioneer...

University Extension/Department of Economics

Grain Transportation Infrastructure

Pioneer GrowingPoint® Advisory Board MeetingKansas City, Missouri

Mar. 14, 2011

Chad HartAssistant Professor/Grain Markets Specialist

[email protected]


Grain Flow SurveysEdward Yu and I conducted grain and biofuel flow

surveys for the 2006/07 and 2007/08 marketing years in Iowa.

2006/07 Report:• http://www.card.iastate.edu/publications/DBS/PD

FFiles/08sr102.pdf

2007/08 Report:• http://www.card.iastate.edu/publications/DBS/PD

FFiles/09sr103.pdf


Survey Format5 distinct surveys

• Grain Marketers (Farmers)

• Grain Handlers

• Corn Processors (including Ethanol)

• Soybean Processors

• Biodiesel Producers


0

10

20

30

40

50

60

70

Countryelevators

Corn processors River terminals Farm/feedingoperations

1999/2000 2006/07

Shifting Markets for Cornpercent


Transportation for Corn


0

10

20

30

40

50

60

70

80

Country elevators Soybean processors River terminals

1999/2000 2006/07

Shifting Markets for Soybeanspercent


Transportation for Soybeans


Grain Hauling Vehicles


-50

-40

-30

-20

-10

0

10

20

30

Wagon(<500 bu.)

Wagon(>=500

bu.)

Single axletruck

Tandemaxle truck

Semi Other

Projected Change in Fleet by 2012percent


Producer Shipments


Producer Ratings


0

10

20

30

40

50

Feeders Corn processors River terminals Export markets

1999/2000 2006/07

Shifting Markets for Corn Handlerspercent


Handlers – Corn Transport


0

10

20

30

40

50

60

70

80

90

Soybean processors River terminals Export markets

1999/2000 2006/07

Shifting Markets for Soy Handlerspercent


Handlers – Soybean Transport


Elevator Ratings


Ethanol Markets for 2007/08


Survey Summary• Continued demand for corn from the livestock

and ethanol industries is expected to generate more demand for in-state transportation.

• Although the share of export markets decline, the volume may increase given the expanding harvests.

• The total vehicles owned by farmers continue to decline, however, the number of heavier vehicles (large wagons and semis) is expected to increase.


Survey Summary• Most of the biofuels and co-products were sold

to other states, translating to a higher demand for rail services.

• Interstate highways received the most positive feedback, gravel roads received the least.

• High transportation costs was the common hurdle for all five surveyed groups.


Grain Transportation Channels

Source: U. S. Grains CouncilValue Enhanced Grain Exporter Manual


Transportation Costs

Source: USDA, Agricultural Transportation Challenges for the 21st Century


Iowa Roadways

As of 2008:

Interstates 781 miles

Principal and minor arterials 9,748 miles

Collectors 31,558 miles

Local 72,136 miles

Total 114,223 miles

Source: BTS State Transportation Statistics2009 Edition


Iowa Roadway Conditions

As of 2008:

Very Good 2,456 miles 10.1%

Good 7,064 miles 28.9%

Fair 10,944 miles 44.8%

Mediocre 2,460 miles 10.1%

Poor 1,498 miles 6.1%



Roadway Comparison


Rank State % Mediocre or worse

1 New Jersey 49.5%

2 Hawaii 46.1%

3 California 40.5%

4 Vermont 36.3%

5 Idaho 35.2%

6 Maryland 34.6%

7 Kansas 32.6%

8 Alaska 32.4%

9 Oklahoma 32.3%

10 West Virginia 29.4%

Iowa is 25th with 16.2% of the roads rated “Mediocre” or “Poor”.

For the entire U.S. 17.9% of the roads rated “Mediocre” or “Poor”.

In Washington DC 96.0% of the roads rated “Mediocre” or “Poor”.


Iowa Bridges

As of 2009:

Iowa has 24,799 bridges

5,358 (21.6%) are structurally deficient

1,320 (5.3%) are functionally obsolete


U.S.

11.8%

12.9%

Iowa ranks 4th in structurally deficient bridges


Costs Due to Rough Roads

Source: AASHTO, “Rough Roads Ahead”May 2009

State Cost per Motorist New Jersey $596 California $590 Hawaii $503 Rhode Island $473 Oklahoma $457 Maryland $425 Missouri $410 New York $405 Mississippi $394 Louisiana $388

The U.S. average is $335

Iowa is 11th with $383

Given Iowa’s nearly 2 million drivers, rough roads costs Iowans $762 million


Roadway Maintenance

Source: National Center for Pavement Preservation


Needs Assessment

The Iowa Department of Transportation looked at its critical needs versus revenue streams

Their projections show a shortfall of $267 million per year for critical transportation needs

Source: IDOT, TIME-21 Funding AnalysisDec. 2008


Iowa’s Rail and Grain Facilities

Source: IDOT


Rail Deliveries to Ports

Source: USDA-AMS


Rail Needs

Large-scale corridor expansion projects

New intermodal terminal facilities

New, more efficient locomotives and rail cars

Upgrades to railway track and structures

New technology and communication systems

Source: Association of American Railroads

University Extension/Department of EconomicsSource: Russ ByingtonUS Dept. of Transportation

Barge and Rail Shipments of Grain to U.S. Ports, 2000-2008

0

20

40

60

80

100

120

2000 2001 2002 2003 2004 2005 2006 2007 2008

Mil. Tons

Barge Rail


U.S. Waterway System

Source: USACE


Upper Mississippi Locks

Source: USACE


Barge Grain Shipments

Source: USDA-AMS

University Extension/Department of EconomicsSource: Russ ByingtonUS Dept. of Transportation

Unscheduled Lock and Dam Repairs, 2000-2008

0

20,000

40,000

60,000

80,000

2000 2001 2002 2003 2004 2005 2006 2007 2008

Hours


Barge Issues

Aging infrastructure in need of repair

Expansion of locks to meet barge shipping needs600 vs. 1200 feet long locks

Environmental vs. shipping concerns

Source: Association of American Railroads


Cost -- MN and Japan via Gulf

Source: USDA-AMS


Cost -- MN and Japan via PNW

Source: USDA-AMS


Thank you for your time!

Any questions?

My web site:http://www.econ.iastate.edu/~chart/

Iowa Farm Outlook:http://www.econ.iastate.edu/ifo/

Ag Decision Maker:http://www.extension.iastate.edu/agdm/

university extension/department of economics grain transportation infrastructure pioneer...

Documents

corn slide

corn percent slide

soybeans percent slide

corn handlers percent

soy handlers percent

state transportation

high transportation

share of export markets