Transport Option Increases Competitiveness and Profitability During Challenging Year
By Kathy Meyer
Illinois soybean producers are finding a 40-foot rectangular box paves the way for market diversification and adds value for top quality-preserved soybeans sold to foreign buyers. In fact, shipping containers may be the competitive answer to move more soybeans profitably from harvest to new buyers looking to purchase soybeans in smaller quantities.
“To sustain export growth and gain a competitive edge for Illinois soybeans, we need diversification to secure more buyers,” says Scott Sigman, Illinois Soybean Association (ISA) transportation and infrastructure lead. “China trade tensions underscore the need.”
Sigman says container shipping presents a continuously expanding opportunity for Illinois soybeans, and is an effort ISA has worked on for years.
“The container concept for soybeans evolved from various market dynamics,” says Sigman. “Some Illinois soybean producers now gain a premium for soybeans exported in containers.”
Preserving Quality and Value
Customers seeking specific soybean types or quality often want to preserve identity from harvest through processing, transportation and delivery, and Sigman says containers fit that need.
Quality control and documentation certification for US #1 yellow soybeans are part of that process. A licensed inspector approves soybeans for each container, taking samples and confirming quality. Containers are loaded, sealed and travel by rail to ocean ports, often never opened during transit. Hence, customers gain a level of confidence with verification at shipment.
Generally, movement from farm to container loading facilities is a more direct line, with less handling, splits and cracks and less blending from multiple sources. A transporter may then ship a trainload of containers to the coast for processing and transfer back ta major port location.
“Our next step is to develop a range of opportunities to load containers closer to the farm or even on the farm, with a USDA-trained and licensed inspector,” says Sigman. “This process may help farmers improve their basis by shipping more directly to customers overseas.”
Typically, about 14 acres worth of soybeans fit into a container. Sigman says a farmer with substantial acreage could cost-effectively supply a significant number of soybean bushels over the course of their fields and on-farm storage. Possibly, producers could sell several container loads in one fell swoop, or meter it out over the course of a year in a consistent way.
“Export buyers often represent feed mills, livestock companies, vegetable oil, food grade, tofu or other foods that they seek to bring to their market locally. We see them look at fields and say ‘this is incredible. I would like to buy these 1,200 acres,’” says Sigman. “There’s potential for tracking and tracing the specific origin. Some foreign buyers have suggested buying more directly. We’re working to facilitate this by extending the range of existing bundlers with companies loading soybeans, such as transloaders with logistics capabilities.”
Illinois’ Intermodal Edge
Intermodal terminals such as Logistics Park Chicago (LLC), Joliet, Ill., provide the logistics and services for loading shipping containers near farms. Terminals ensure efficient and safe interchange between road, rail and other transport modes that move containers to coastal ports.
Illinois producers and terminals have the production and storage capacity to fill containers year-round, and new digital technology makes it easier to link people with capacity to fill empty containers to shippers who seek to avoid the cost of repositioning empty containers.
“We’re fortunate to be near the Chicago terminals with high demand for container movement in the Joliet area,” say Jesse Ruff, co-owner, Ruff Grain Company. Ruff operates grain purchasing facilities in Livingston, LaSalle, Marshall, Woodford and McLean counties.
“The values traded in that market are strong and close enough to make sense for us,” say Ruff. “If a farmer is much farther than 70 miles away, the economics won’t work. We secure trucking companies that bring containers out of Joliet, load soybeans, return and ship to exporters.
“Containers give farmers another market with a higher value than they might find in their local area,” says Ruff. “We’re able to pass along a higher price. It’s good for us and for our farmers.”
“ISA has pursued returning containers back to their origin in a way that’s mutually beneficial for shipping lines to optimize business plans and soybean growers to profit,” says Sigman. “ISA visits shipping lines worldwide, including in Geneva, Copenhagen, Seoul, Taiwan, Hong Kong and Shanghai. The goal is developing relationships and affirming soybean export importance.”
Exploring Infrastructure Needs
Beyond soybean storage facilities and intermodal terminals, other supporting infrastructure is needed to make the system hum. And it’s no small task.
“There are some growing pains involved in streamlining the container shipping process from farm to intermodal terminals,” says Mark Schneidewind, Will County Farmer Bureau manager.
“We see a huge amount of truck congestion and resulting road deterioration, safety concerns and other infrastructure issues. For example, BNSF and Union Pacific rail companies lift an average of two to three million containers onto rail each year. The facilities have been here 10 to 20 years. Everyone locally uses our roads to reach them,” says Schneidewind.
ISA and many of its partners sit on committees with county officials to help define acceptable trucking routes for container loads ranging 88,000 to 92,000 pounds.
“A location with a box culvert along one of our routes is posted at only 80,000 pounds. We’re working to develop routes through municipalities, townships and counties to allow container loads that won’t involve an extra 25 to 30 miles,” he says. “A lot goes on behind the scenes.
“We lost grain elevators on the Des Plaines River about 14 years ago, and we needed an alternative. We previously relied solely on barges which required 50,000 to 60,000 bushels to fill. Containers hold 1,100 to 1,400 bushels. We need that business, too,” says Schneidewind.
“Basically, we try to nurture a more direct shipment of Illinois soybeans. Streamlined goods flow, cash flow and information flow for buyers means more profit for farmers,” says Sigman.