While this idea is as close to blasphemy as a corn grower can get, I think we should seriously rethink spending $2,200,000,000 to upgrade the Mississippi locks. I'm not alone in wondering where the payback will be.
When the economists fed the information into their computer model, there were some signification predictions that resulted:Note the costs of delays mentioned later in the report: 1-3 cents per bushel.
• World trade in grain would increase from the current 264 mmt up to 561 mmt in 2060, however US export volumes would grow from the current 101 mmt to 122 mmt in 2010 and then decline.
• The shift is for increased corn from Argentina and Eastern Europe, soybeans from Brazil and Argentina, increased wheat from Australia and Canada; and reduced wheat from Argentina and the United States,
• US exports initially increase as a result of increased planted acreage and availability of grain to export, as well as a decline of Chinese exports. The subsequent decline in US exports results from increasing competitiveness from other exporting countries and domestic use of corn for ethanol. Wheat exports drop and soybean exports increase.
The economists studied the impact of what would happen if the lock and dam infrastructure on the Mississippi between Cairo and Davenport and the Illinois River were upgraded by 2020 to handle greater volumes of barge traffic. “The results indicate a change in barge shipments by about +4 mmt by 2020, nearly all of which would be for corn and soybean in equal amounts. Thereafter, the change in barge shipments would be about +1 mmt to +2.5 mmt, with most of it being soybeans.”
They also found that when volumes of grain increase because of reduced delays and costs on the Mississippi and Illinois Rivers, total barge shipments decrease on the Ohio River. [More of a great summary from Farmgate]
Delay costs, in aggregate, are comprised of the lower delay costs that would occur atHow long to payback billions at that rate? $52M won't make the interest payment on $2.2B. If farmers had to fund this from the ag budget it would be forgotten pronto, but as long as it simply goes on our tab for the next generation(s) to pick up, we'll keep fighting for those tax dollars long after the market has moved the grain elsewhere.
current capacity, plus the volume effect. The impact of expansions on delay costs are in the area of $61 million, inclusive of both direct effects. Most of this is accrued on Reach 4, followed by Reach 2 and 1. Expansion results in an increase in barge costs due to the increase in volume, a decrease in rail shipping costs, and a slight increase in ocean shipping costs. In total, the impact of expanding locks is a decrease in costs by about $52 million. [More]
The big problem perhaps is how to stop lobbying for something without risking looking foolish. Instead we just keep firing the same bullet points long after the target has moved. Given the conservative assumptions of this study, we could fix the locks and see less use.
This is a time to realize ethanol has changed all the spreadsheets and courageously whisper, "Never mind".