Department of Agriculture (USDA) released a new study that quantifies the importance of the inland waterways system to the U.S. economy, specifically U.S. ag.

The “Importance of inland waterways to U.S. agriculture” study addresses the connection between the inland waterways and the competitiveness of U.S. agriculture in global markets. U.S. farmers and agribusinesses, as well as the overall U.S. economy and balance of trade, depend upon the inland waterways and its infrastructure, which provide safe, lowest-cost and most environmentally sustainable and fuel-efficient way to move grain and other agricultural products. 

“USDA’s study underscores the inland waterways as a conduit to our nation’s agriculture competitiveness, as well as to overall U.S. economic prosperity,” said Mike Toohey, president and chief executive officer of the Waterways Council, Inc., (WCI).

Highlights of the study include:

  • Due to efficiencies and lower costs, the inland waterways system saves between $7 billion to $9 billion annually over the cost of shipping by other modes. These values are based on all goods currently being moved on the water compared to the same volume transported by rail. 
  • Every dollar of waterways activity output results in $1.89 in additional U.S. economic activity directly related to the waterways.  
  • Compared to the status quo, increasing investment in the inland waterways system by $6.3 billion over a 10-year period (through 2029) and $400 million per year thereafter through 2045 cumulatively would grow the waterways’ contribution to U.S. gross domestic product by 20% (to $64 billion) and increase waterways-related employment by 19% — to 472,000 jobs. The study said this option would more than offset the cost of completing all the proposed projects, and would increase the market value of U.S. corn and soybeans by $39 billion. Conversely, reduced investment would decrease the market value of those commodities by $58 billion, the study said.
  • The inland waterways’ infrastructure is aging and needs rehabilitation to restore its full capability, forestall major disruptions and provide opportunities for growth. Most locks on the Upper Mississippi and Illinois river system have exceeded their projected 50-year lifespan. Delays can cost operators and shippers more than $44 million annually.  For corn, delays on the Mississippi river could have up to a 24¢ per bushel negative impact.
  • While the United States currently has a $5.35 per tonne advantage over Brazil when shipping soybeans on the inland waterways system (from Davenport, Iowa, to Shanghai, China), aging U.S. waterways infrastructure will increase the price to the end-user, lower the demand for U.S. grains and soybeans, and make them less competitive in global markets.

The newly published report was supported by the WCI and the National Grain and Feed Association (NGFA)

“We believe the study makes the case to expedite the Navigation and Ecosystem Sustainability Program (NESP) that would modernize five locks on the Upper Mississippi river and two on the Illinois waterway to be ready to capitalize on predicted grain shipments, while at the same time improving the health of our marine ecosystems and habitats,” Toohey said. “NESP is awaiting Pre-Construction Engineering and Design (PED) funds to be ‘shovel-ready’ for these vital locks.”

The NGFA along with the WCI urged the NESP infrastructure project to move forward. 

“We appreciate the leadership of Secretary Perdue and USDA in once again spotlighting the importance of the U.S. inland waterways transportation system to U.S. agriculture’s global  competitiveness and farmers’ bottom lines,” said Randy Gordon, president and CEO of the NGFA. “Very importantly, this study quantifies the significant cost of further delays in rebuilding America’s inland waterway infrastructure, and it’s not a pretty picture. Foreign competition from countries like Brazil is only increasing given current trade disruptions, and China is investing aggressively in South America’s transportation infrastructure to the United States’ detriment.

“The United States simply can’t afford to lag behind any longer. This study is a wake-up call to the White House Office of Management and Budget and Congress to make the PED funding for NESP available this year, and to ensure growing investments are continued and expedited in the tremendous natural resource that America’s inland waterways represent.”

Informa’s Agribusiness Consulting was retained by the USDA Agricultural Marketing Serviced to produce this study.