Soybean Industry Navigates Illinois Waterway Repairs
Tons of soybeans destined for customers around the world fill barge tows that move from the heart of Illinois to the Gulf of Mexico via the Illinois Waterway. But those barges will be notably absent during the summers of 2019, 2020 and 2023, as several locks and dams along receive much-needed major rehabilitation and repairs that require planned, short-term closures.
The Illinois Waterway connects the Great Lakes at Chicago to the Mississippi River near St. Louis. The system typically carries more than 29 million tons of cargo each year, including about 10 million tons of agricultural products and 4 million tons of fertilizer.
This inland waterway supports the economy. The Impacts of Unscheduled Lock Outages, a 2017 National Waterways Foundation and U.S. Maritime Administration study, estimated that an unplanned closure of the LaGrange Lock and Dam would cost $1.7 billion per year in additional shipping costs and affect 18 states. Plus, it would lead to a $2.1 billion loss in farm-dependent income.
Numbers like that call for action. Especially when about 60 percent of the soybeans grown in Illinois are exported. The Illinois Soybean Association (ISA) checkoff program has been leading collaborations and facilitating discussions among industry, government and transportation stakeholders to develop solutions to infrastructure challenges like the Illinois Waterway.
“We began meeting with state legislators, the U.S. Army Corps of Engineers and others in 2016 to discuss how to address needs of 80- to 90-year-old locks that were built with a 50-year lifespan,” explains Doug Schroeder, who farms near Mahomet, Illinois, and serves as the chairman of ISA. “Planning ahead and including farmer perspectives helped develop the plan that is unfolding now.”
“These priority repairs are a good first step in improving the condition of locks and dams on the Illinois Waterway,” says ISA’s Schroeder. “The $117 million investment in major coordinated rehabilitation of these locks and dams is desperately needed and will help the system significantly.”
The U.S. Army Corps of Engineers expects this major maintenance work to increase the lifespan of these locks and dams another 25 years. But as some of the locks are dewatered in 2020 for the first time in more than 30 years, unexpected issues could show up.
“We need the Illinois Waterway to be reliably navigable,” Schroeder says. “However, the true total investment the system needs to be renewed and robust currently surpasses $700 million. Substantially more work needs to be done to ensure that our inland waterway system is fully rehabilitated to be resilient.”
“I have met soy buyers from Columbia,” he adds. “Though it’s located in South America, Columbia buys almost all it’s soy from the U.S. through the Port of New Orleans because of the lower transportation costs and reliability of shipments. Both these U.S. advantages would be lost without our great water transportation system.”
According to Schroeder, ISA continues to work closely with government and industry partners to manage the short-term challenges created by the current repair schedule. At the same time, ISA is focusing on the long-term needs to maintain the shipping advantage Illinois’ strategic location and infrastructure provides.
Meanwhile, Illinois soybean producers are planning ahead to get their crops to market while the waterway is closed.
Navigating River Detours
David Wessel, like many Illinois soybean producers, depends on the Illinois Waterway to get his soybeans to market. Wessel farms near Chandlerville, Illinois, about 18 miles from river terminals in both Beardstown and Havana, Illinois, above the LaGrange Lock and Dam on the Illinois River.
“Our best option is to ship soybeans via the Illinois Waterway,” says Wessel, who also serves a as a director for the Illinois Soybean Association (ISA). “The cost-effective, efficient shipping options along the Illinois River support our basis. Long-term, we depend on it being navigable.”
The combination of record flooding and planned lock maintenance requiring partial lock closures in 2019 has helped Wessel identify challenges and look for solutions.
“Because of high water, we’ve been checking to see if terminals are open daily and we’ve seen higher traffic,” Wessel says. “We are learning not to take the river for granted and exploring other shipping options.”
During summer 2019, the Starved Rock and Marseilles Locks and Dams have been closed during daylight hours for about three months, and will fully closed for about 15 days from September 21 to October 5. These closures are serving as an example for 2020 work, which will require full closures of six locks for various time periods between July 1 through November 1, 2020. The timing is projected to avoid traditional spring flooding season while still allowing for post-harvest shipping.
“I expect bottlenecks in soybean movement next year because many producers move soybeans directly from the field to the river starting in September, and we know our on-farm and local cooperative storage capacity,” Wessel explains. “We will have to adjust in 2020 because the river will be closed at the beginning of harvest.
His solutions include a soybean contract with a group located in Naples, Illinois, below the LaGrange Lock and Dam. While he hasn’t delivered there before, the added 20 miles for delivery will be offset by the price he sold at, since he knows he can’t deliver more locally. He also has rail terminal options roughly the same distance away.
Wessel expects that fertilizer and other agricultural input suppliers who bring products up the river will be planning inventory around the lock closures, as well.
“We understand the value of the river, especially when it isn’t available,” he says. “We are willing to adjust our system as needed for a couple seasons to ensure we sustain the long-term benefits the river delivers for our soybean exports.”
On behalf of Illinois soybean producers, ISA recognizes the value of the Illinois Waterway as a critical corridor that needs to be fully rehabilitated to ensure resilience, reliability and robust renewal.