USDA Touts Locks, Dams ROI

ALTON, Ill. (DTN) -- Agriculture Secretary Sonny Perdue is pushing for increased spending on locks and dams in the upper Mississippi River and Illinois River so U.S. agriculture can boost sales and remain competitive in the coming decades.

Perdue released a USDA study Wednesday stating that spending $6.3 billion over the next 10 years to upgrade the lock and dam system would boost agricultural sales as much as $142 billion through 2045.

"This is where we need to be folks, right here," Perdue told a group of farmers, local officials and barge industry representatives at the Alton, Illinois, lock and dam.

The secretary frequently pointed to the "rate of return" from boosting investment to $6.3 billion in Corps of Engineers construction funds, which would boost GDP by $72 billion over time. Perdue added that global competitors are investing in infrastructure, and he noted that China is investing in Brazilian infrastructure. "If we want to remain as the superpower for food in the world, this is what we have got to do," Perdue said.

The secretary said global competitiveness was the driver behind the report. Perdue noted the production of corn and soybeans in the U.S. has a great deal to do with access to the waterways for exports. "Everybody is for infrastructure and wants to invest in infrastructure, but what difference does it make? I'm a return on investment guy, and that is what we wanted to have was a valid argument we could take to Congress to show this is what we get back when we are willing to invest," Perdue said.

The USDA report proposes a few scenarios for increased investment in inland waterways through 2045, or maintaining the status quo and reducing investment. Increased investment in the river would boost employment by 77,000 jobs and increase gross domestic product by $72 billion. Agricultural sales would rise from $354 billion to $496 billion, or 40%, over that time. Reducing investment in locks and dams would curb jobs, GDP and agricultural sales by nearly comparable amounts, the report stated.

While calling for $6.3 billion more in direct construction investment over 10 years, the USDA analysis calls for increased funding through 2045 to rehabilitate existing locks and conduct routine maintenance that would cost just under $36 billion over that time span.

USDA shows the costs of a metric ton of U.S. soybeans last year to Shanghai, China, -- including the farm-gate price, was about $397.45 while from Mato Grosso, Brazil, the costs were $402.80. With increased investment, those costs in the U.S. could come down about 4% to around $380.25 a ton.

Also taking part in the report release was R.D. James, assistant secretary for the U.S. Army Civil Works Division. James farms cotton, corn and soybeans in southeast Missouri, but also has served multiple stints on the Mississippi River Commission, which oversees management of the river south of St. Louis to the Gulf of Mexico. James pointed out roughly 60% of corn exports move down the Mississippi River and roughly 40% of all agricultural exports move down the river.

"I know the importance of this river and the inland waterways system to farmers," James said.

James noted most of the locks and dams on the Mississippi were built in the 1930s and '40s. They were also built at a much quicker pace than similar Corps of Engineers projects now take today.

Constant delays and repairs up and down the river all translate into widening basis for farmers, James added. The system now can often be compared to a two-lane highway in which traffic has been shifted down to just one lane, he said. James said some locks have smaller lock chambers that require barges to break apart and move through in segments, taking up hours at a time.

"Improvements to this lock and dam system are crucial for the American farmer," James said. He later added, "Basis affects all of us."

The Corps has been focused this spring and summer on flood recovery on both the Mississippi and the Missouri rivers. James said that can affect overall congressional appropriations for the Corps spending. "Congress basically has in their minds the top limits, and they are only going to give the Corps so many dollars, and if the Corps has to put that in flood recovery, they will, instead of construction projects," James said.

Perdue and James called on agricultural groups, the barge industry and local officials to begin aggressively lobbying congressional appropriators to increase funding for lock and dam projects. An official for the Iowa Department of Transportation at the meeting noted that upgrading locks and dams is one of Iowa DOT's main priorities, because state highways cannot handle the volume of commodity traffic that the Mississippi River can carry.

A full copy of the USDA study, "Importance of Inland Waterways to U.S. Agriculture," can be found here: https://www.ams.usda.gov/…

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

(CZ/BAS)

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