Feature

Haven’t we been here before?

Farmers in the squeeze between expenses and returns

Some 45 years ago, MFA president Fred Heinkel was pondering how his farmers could navigate increasing input prices without increased commodity prices. Of course, back then, the U.S. average corn price was $1.16, and the world commodity trade was a different landscape. From the nation’s technocrats and planners, there was a call for increased farm production. Government was for pushing for increased production for different reasons back then, but it brings to mind our nation’s urge to increase biofuels today.

Heinkel’s ruminations were cogent. As price takers, farmers have real control on either side of their ledger. He titled his editorial “The Farmer’s Dilemma,” which, it turns out,

Read more: Haven’t we been here before?

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Scout early, scout often

Sap-sucking aphid populations can thrive in summer conditions

For a while last summer, the skies above parts of Missouri and Iowa resembled an aerial dogfight, as Air Tractor spray planes banked and dived across aphid-ridden soybean fields. The soybean aphid had arrived in damaging numbers and growers declared all-out war on the pest, including air attacks.

“They hit in east-central Missouri in early August, when most soybeans were in the R-4 stage [early reproductive stage],” said Andy Schmidt, MFA staff agronomist. “They can really explode within a few days, especially when temperatures are in the 70s and 80s and that’s what happened in the area around Audrain and Montgomery counties.”

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MoDOT studies ways to increase waterway freight

Farmers stand to benefit from lower freight rates if more grain and fertilizer moves along the Missouri River again after an eight-year hiatus caused by low river levels.

Ernest Perry, freight development administrator at the Missouri Department of Transportation, leads an effort to study ways to increase freight travel along the Missouri, create jobs and promote an environmentally friendlier way to transport goods.

“We’re having a transportation capacity crisis,” Perry said. “We have too many vehicles on our highways, and it’s only going to get worse. The only capacity we have left is the waterway. The river is a tremendous transportation asset that can help relieve freight-related highway congestion. It provides environmental benefits in that it is the most fuel efficient, and is an economic engine for the state.”

A federal appropriation of $900,000 will fund the research and planning project. MoDOT recently named a 12-member project coordination team that developed a request for proposal and asked vendors to bid on developing the plan. Once a vendor’s selected, the plan will take 14 months to complete, with results to be announced in June 2011.

The study got rolling in December when farmers, shippers and government agencies offered input at a MoDOT forum in Rocheport, Mo. Participants identified ways to increase river freight movement through market assessment and development, port infrastructure and river management.

Forum participants identified obstacles to moving freight down the river including business risk related to unreliable water flows and levels. In addition, since so many freight operators have moved off the river, support services are harder to find. As it stands today in Missouri, only seven of 14 authorized public ports on the river have the capability to transport goods across their dock. “The active ports, however, are seeing a lot of business and growth,” Perry reported, adding that over the last two years, more than $16 million has been invested in 20 projects at the seven active ports through the MoDOT waterways program.

“Right now, river conditions are the best they have been in years for freight, so some of these normal obstacles shouldn’t slow us down,” Perry said.

River’s ready for freight

John LaRandeau, a representative from the Corps of Engineers Northwestern Division, explained that the Corps built the Missouri River liquid highway, completing it in 1980. Today the Corps manages all 735 miles of the navigation channel from Sioux City, Iowa, to St. Louis, where the Missouri runs into the Mississippi River. In 2008, he added, the Missouri River basin emerged from an eight-year drought that reduced flows and shortened navigation seasons. As a result, commercial operators largely abandoned moving grain along the river.

Long-haul tonnage on the Missouri River peaked in 1977 at 3.34 million tons, according to the Corps. In 2008, preliminary estimates dropped to 0.175 million tons. Over that time, other droughts and floods contributed to the decline, along with ethanol plants processing grain that would have otherwise been shipped, and freight competition from the Arkansas River.

“The drought is over and the reservoirs are full,” LaRandeau said. “For 2010, the Missouri River liquid highway is open, available and reliable, providing a channel nine feet deep by 300 feet wide for a full eight-month season.” Typically, freight traffic freezes in the winter.

Navigation isn’t the Corps’ only priority as it manages the river. Congress mandates other purposes, including flood control, irrigation, hydropower, recreation, water supply, water quality and fish and wildlife.

Perry maintains that Missouri needs the MoDOT navigation study to represent the state’s interests in light of the five-year Missouri River Authorized Purposes Study (MRAPS) launched in 2009. While the responsibility for MRAPS has been assigned to the Corps, “This appears to be an effort driven by the upstream states to re-evaluate the river’s authorized purposes with the intention to downgrade the priority of navigation as well as other downstream uses,” Perry said.

Shippers support expansion

Private companies like AGRIServices of Brunswick, LLC, continue to move grain along the Missouri River, but on a more limited basis than in the past. “We located along the Missouri so we could use barges to move grain out and fertilizer into this community,” said Bill Jackson, manager of this operation that operates in the central part of the state. Last year, his company brought in 70 barge-loads of fertilizer from the Lower Mississippi, selling much of it wholesale to dealers. It also shipped 35 barges of grain downriver to New Orleans export markets.

Jackson is a member of the MoDOT project coordination team. “I support Dr. Perry’s project because it promotes rational understanding of the Missouri River resource,” Jackson said. “Nothing beats a good crisis for motivation to get rational and productive. When our highways get too dilapidated and congested, we’ll get motivated to look at the inland waterways system as an alternative.”

Today, more sand and gravel moves on the Missouri River than any other commodity. Steve Engemann, another member of the MoDOT project coordination team, is president of Hermann Sand & Gravel, Inc., a family business based in Hermann, Mo., about 100 miles upriver from St. Louis. The company loaded and unloaded commercial barges in the late 80s and 90s, but the flow was interrupted until last year.

“I’m glad to see MoDOT trying to help get more traffic on the Missouri River,” Engemann said. “It is a great resource that is under-utilized. It is a perfectly navigable river that has great potential. It is a shame to waste it.”

He’d like to see a more dependable channel, dug deeper so it compares to the Mississippi River. That would allow more freight per barge, saving shipping costs. A few successful seasons of shipping would attract more freight operators to dip their toe in, he added, but the waterway needs to be more stable and reliable. “I hope that there will be dedicated service on the river, which would make overall shipping rates cheaper,” he said.

Environmental concerns

Jackson and Engemann expressed concern that the Corps is moving away from a focus on navigation and flood control in favor of fish and wildlife concerns. As evidence of the Corps’ success in this vein, Jackson points to the Big Muddy National Fish and Wildlife Refuge created in 1994. Today it’s grown to 11,000 acres along the Missouri River from Kansas City to St. Louis.

The case of the pallid sturgeon illustrates Jackson’s and Engemann’s point about the Corps’ changing priorities. The U.S. Fish and Wildlife Service prescribed a spring rise in river levels to encourage spawning of the endangered fish. As a result, the Corps released more water from upstream dams each March and May since 2006. These releases can take five days to reach Kansas City and 10 days to reach St. Louis. During that time, weather and other factors can combine with added flow to create flooding downstream.

According to John Drew, state hydrologist for the Missouri Department of Natural Resources (MDNR), “Research since 2006 has shown that the spring rise is not needed to cue pallid sturgeon to spawn, and it is likely cued by water temperature. While the spring rise is limited by flood control criteria, there is still concern that it increases the risk of flooding. Given the potential flood risk… Missouri has argued that it should be discontinued.”

Drew believes we can strike a balance. “It doesn’t have to be an either/or between navigation, fish and wildlife,” he said. “In recent years, the Corps of Engineers has been aggressively constructing habitat for pallid sturgeon and two birds that are also on the federal endangered species list, the interior least tern and piping plover. The creation of this habitat has helped the Corps of Engineers maintain reservoir releases needed to support navigation and other uses of the river, such as drinking water intakes.”

Protecting Missouri’s rights

Beyond fish and wildlife issues, MDNR also wades into battles to preserve Missouri’s right to Missouri River water, challenging upstream states like Montana and the Dakotas that want to cut water releases during drought. “Upstream reservoir recreation interests want downstream releases curtailed even further so that more water is retained in the reservoirs,” Drew said. “If more water is held in the upper reservoirs, navigation, power generation, downstream water supplies and other uses would see even more detrimental effects.”

“Fifty percent of Missouri’s citizens get their drinking water from the Missouri River or its alluvium,” added Mike Wells, deputy director for water resources at MDNR. “When flows hit navigation target levels in the summer, then there is more than enough water to supply drinking water for our communities, cooling water for power plants, and water for fish and wildlife habitat.”

Correspondence

Bill Jackson of AGRIServices of Brunswick said that continued degradation of the highway system will bring new focus to river transportation.
No matter how you stand on the pallid sturgeon, everyone agrees that moving more freight by river could not only save shipping costs, but help the environment.

“Waterborne commerce is a much more energy efficient mode of transportation,” said Drew. “It also has advantages for air quality, safety and other considerations. Waterborne commerce can move the same ton of freight 1.4 times farther than rail, and 3.7 times farther than trucks on one gallon of fuel.” Moving freight by water also helps ease road congestion. “One barge can move the same amount of dry cargo as 70 trucks or 16 rail cars,” Drew said.

Hopes rise for the river

For 2010, the Corps’ LaRandeau forecasts full service and a full season for Missouri River navigation. Fertilizer will be barged to Brunswick, asphalt to Kansas City, cement to Jefferson City and clay to St. Louis. More grain will come downriver from Nebraska. In addition, he sees large freight like windmill parts moving more efficiently along the Missouri than on highways.

The Corps has ideas for improving navigation on the Missouri, such as increasing the authorized draft, but these ideas require feasibility studies that consider water supply and environmental impacts. There would also be considerable involvement by all stakeholders in the Missouri River basin, and the required Congressional authorization and funding.

Perry supports deepening the channel. He’s impressed with how the Corps can dredge or add rock structures to scour the river’s bottom. As the MoDOT study kicks off, one of the project team’s first tasks will be to identify navigational problem spots on the river.

The team will also strategize ways to return traditional commodities like grain to the river, to identify new markets, and to identify infrastructure and equipment that might be needed for both. As the study draws to a close in June 2011, the team will determine how to move forward.

“We can do something to get freight back on the water,” Perry concluded. “The freight industry’s fired up, and economic conditions today make this an opportune time to move forward. We need to get the word out that the river works for Missouri agriculture and businesses, and it is the lowest cost, most efficient, greenest, and safest way to ship freight.”

The Waterways Council, an association of waterways users across the nation, recently launched a TV commercial campaign targeted at opinion-leaders in Washington, D.C. The 30-second spot, “Keep America Moving,” highlights the value of the inland waterways system to jobs, the environment and energy efficiency, and traffic congestion relief. You can find it on YouTube or by visiting www.waterwayscouncil.org.

To learn more about MoDOT efforts, visit http://www.modot.mo.gov/othertransportation and click on “waterways” and “freight.”
 

Farmers would benefit from moving freight by waterway

Mike Geske, a farmer from Matthews, Mo., estimates that the average Missouri farmer could save about 25 cents per bushel by shipping corn to St. Louis ports by barge instead of truck. “If elevators could move grain and fertilizer on the Missouri, freight rates would go down,” said Geske. “Elevators could pass the savings along to farmers.”

Geske estimates it might cost a Missouri farmer about 55 cents a bushel to ship corn to St. Louis by truck compared to about 30 to 35 cents by waterway. Farmers farther from St. Louis would save more, and those closer would save less. Geske raised 200,000 bushels of corn in 2009—for a farmer of his size, the savings might have reached $50,000. “It could make the difference between profit and loss,” he said.

Actually, Geske raises corn, cotton and rice near Matthews, south of St. Louis, and he benefits from the Mississippi River waterway, where freight continued to move through the recent drought. He’s pushing for increasing barge traffic along the Missouri River in his role as director with both the Missouri and National Corn Growers Associations.

Farmers would also benefit if inputs could be shipped via the waterway, Geske added. He estimates that last year, a typical Missouri farmer might have saved about $10 to $15 per acre if fertilizer arrived via barge rather than truck. “Fertilizer prices bounce up and down, but shipping by the Missouri River might save an average of $30 to $40 per ton,” he said.

While savings estimates differ, Ernest Perry, freight development administrator at the Missouri Department of Transportation (MoDOT), confirmed that economies could be gained. “Research by the University of Missouri demonstrates that having waterways available for shipping movement can reduce shipping costs between $4 and $8 a ton through additional competition,” he said. Beyond cost savings and improved grain prices, expanding river freight would enhance global access to markets, Perry added.

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We asked the kids

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If you ever want to know why farm and workplace safety is important, look at those cute faces in tow when farmers and agricultural workers aren’t on the job. We can be stoic in the face of injury, but it makes you flinch to think about how a child might be affected by the loss of abilities or income from an injured parent. So to help remind us all about staying safe, we asked the children and grandchildren of MFA employees to make posters offering us all advice on the topic.

We’ll use all of the entered posters in an ad campaign to highlight importance of being safe at work and at home.
Judges in the contest faced tough decisions in awarding the winners. There were plenty of clever ideas and nice artwork. But after much deliberation, judges ordered the posters as follows.

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