November 10, 2005

US grain industry seeks greater transportation capacity
 

National Grain and Feed Association (NGFA) and North American Export Grain Association (NAEGA) have called for greater transportation capacity, at a Senate Agriculture Committee hearing that addressed transportation challenges facing US agriculture.

Both associations said limits on American transportation capacity have become "a very serious" economic issue.

Rick Calhoun, vice president of the Grain Division at Cargill Inc., testified on behalf of NGFA and NAEGA. He said there was a serious need to expand transport capacity, otherwise economic growth in agriculture and other sectors would eventually be limited by inefficient product transportation.

Calhoun added that higher energy costs, long-term shortages in rail capacity and storm-related problems have sharply driven up transportation costs for agricultural products bound for markets.

Meanwhile, countries competing with the US, especially South American nations, have invested in transportation infrastructure and closed the gap in competitive advantage with the US agriculture sector.

NGFA and NAEGA have urged the senate to help approve a water resources development act, which would include funds for building new locks on the upper Mississippi River and the Illinois waterway.

Calhoun said inland waterways were crucial for efficient transportation of export grains and many other products, especially in light of higher energy prices lately.