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Will Oil in the Gulf Affect Ag Shipping?

So far, the oil disaster in the Gulf of Mexico has had relatively little impact on the Midwest, though many are wondering if agricultural exports could suffer as a result on an ongoing oil spill.

“Thus far the spill has not disrupted traffic into or out of the Mississippi River or Mobile, Alabama.  All scheduled freight deliveries have been made.  No ship calls have been cancelled due to the spill.  This is expected to continue for the foreseeable future,” said Mike Steenhoek, Executive Director of the Soy Transportation Coalition.

Congressmen Bruce Braley (D-Iowa) and Phil Hare (D-Ill.) sent a letter on June 10th to President Barack Obama and Coast Guard Admiral Thad Allen, urging them to fully evaluate the impact of the BP Oil Spill on Mississippi River shipping lanes. As oil continues to drift closer to the Southwest Passage, a critical shipping lane for farmers who rely on barge traffic to ship their crops overseas, Braley and Hare are concerned about the impact a slowdown in Mississippi River traffic could have on prices for farmers, producers and distributors.

Braley and Hare requested that the Obama Administration perform a full analysis on the potential economic impact that the Gulf oil spill could have on barge traffic along the Mississippi River, and the further effect on commerce and local economies along the Mississippi. Braley and Hare hope that an efficient and thorough study of the impact could help mitigate the cost of the spill for the agricultural industry in Iowa, Illinois and the rest of the Midwest.

The Soy Transportation Coalition applauds Congressmen Braley and Hare for being engaged in this issue and making sure the potential impact of the oil spill on agriculture will not be ignored, Steenhoek said. A disruption of shipping from the Mississippi Gulf region would have a detrimental impact on agriculture, in general, and the soybean industry, in particular.  Our ability to meet customer demand would be compromised.  Farmer incomes would be reduced due to a likely widening basis.

In 2009, 21.8 million metric tons of soybeans (800 million bushels) of soybeans were exported from the Mississippi Gulf region.  This amounts to 61% of the total soybean exports by port region.  Among port regions, the Pacific Northwest ranked 2nd with 9.7 million metric tons (356 million bushels) of soybeans exported in 2009 – 27% of total soybean exports by port region.

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