Five feet stand between the American soybean industry and an additional $461M in annual revenue. The path to the cash is the Mississippi River Ship Channel Dredging Project which will increase the depth of the last 250 miles of the river to 50 feet versus its prior depth of 45.
Does five feet really make a financial difference? Yes: 500,000 bushels of difference. Most large ocean-faring vessels can carry 2.4M bushels of soybeans out of the ports of the Mississippi River. And each foot of depth will add an additional 100,000 bushels, to expand that capacity to 2.9M bushels.
And the last ~250 miles of the Mississippi are vital as 60% of all U.S. soybean exports travel this portion of the river. Not to mention that four of the nation’s 15 largest ports are located here.
Fun fact: These ships normally take more than a day to load. Most of them are destined for China, and it takes 30 days on the open seas to make it to their destination.
Return on investment: The depth increase will ultimately save 13 cents per bushel in freight, and loads will increase by 21%. From a different angle, it will return $7.20 for every $1 spent on construction and maintenance.
Soundbite: “This project is a big, big deal for the export strength of U.S. agriculture in the future, and it’s also very significant for farmers in the near-term,” Mike Steenhoek, executive director of the Soy Transportation Coalition (STC), said.
What lies ahead: The total estimated cost of the Mississippi River Ship Channel Dredging Project is $270M, and it should be complete by the end of 2022.