Do You Know Why?

Big Picture Overview

♦ U.S. agriculture is expected to contribute $16 billion to the U.S. balance of trade in fiscal 2016. 

♦ Exports are forecast to reach $138.5 billion, while imports are forecast to reach $122.5 billion. (USDA ERS/FAS 

Outlook for U.S. Agricultural Trade, August 27, 2015).

♦ Forestry and fishery products, and critical farm inputs such as fertilizer, feed, and fuel move on the waterway 

system as well.

♦ Agriculture Secretary Tom Vilsack noted that every $1 billion in farm exports supports roughly 8,400 jobs.

♦ In calendar year 2014, 73 percent of U.S. agricultural exports (154 million metric tons) and 65 percent of imports 

(40 million metric tons) were waterborne. (U.S. Census Bureau Trade Data and PIERS). 

♦ Exporters, importers, and domestic shippers depend on authorized port and waterway depths and widths, and 

locks and dam infrastructure.

♦ The Harbor Maintenance Tax (HMT) is a 0.125 percent ad valorem tax on the value of imports and certain 

domestic waterborne cargo deposited in the Harbor Maintenance Trust Fund (HMTF). 

♦ Estimated fiscal 2016 HMT revenues and investment interest are $1.9 billion, and requested appropriations from 

the HMTF are nearly $1 billion, yielding an estimated year-end balance of $9 billion. (Budget of the United States 

Government, Fiscal Year 2016).

♦ Commercial vessels engaged in waterborne transportation on the inland waterways system generate revenues 

and investment interest from a 29 cents per gallon tax on diesel fuel, which is deposited in the Inland Waterways 

Trust Fund (IWTF) to finance one half the Federal costs of authorized locks and dams projects. 

♦ Estimated fiscal 2016 IWTF tax revenues and new user fees are $220 million, and requested appropriations from 

the IWTF are $46 million, yielding an estimated year-end balance of $217 million. (Budget of the United States 

Government, Fiscal Year 2016)

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A Reliable Waterway System Is 

Important to Agriculture

Agricultural 

Marketing

Service

Oct 2015
Grain Exports

♦ The United States exports approximately one quarter of the grain it produces. On average, this includes nearly 

45 percent of the wheat, 35 percent of the soybeans, and 20 percent of the corn. (Grain Transportation Report).

♦ Over 60 percent of grains inspected and/or weighed for export departed from Mississippi River, Texas, and East 

Gulf ports in calendar year 2014, over 78 million metric tons (USDA GIPSA). 

♦ Pacific Northwest (PNW) ports accounted for 25 percent of grains inspected and/or weighed for export, over 

32 million metric tons. 

♦ The September 11, 2015, USDA World Agricultural Supply and Demand Estimates for 2015/16 U.S. exports 

includes:

▪ Corn—1.9 billion bushels (47 million metric tons)

▪ Soybeans—1.7 billion bushels (46.9 million metric tons)

▪ Wheat—900 million bushels (24.5 million metric tons)

▪ Soybean meal—11.7 million short tons (10.6 million metric tons) 

▪ Rice—97 million hundredweight (4.4 million metric tons)

▪ Sorghum—430 million bushels (10.9 million metric tons)

▪ Soybean oil—2 billion pounds (907,000 metric tons)

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Source: USDA FGIS and USDA Market News, Grain Inspected and/or Weighed for Export 

by Region and Port Area, January 12, 2015

Great Lakes

1.8%

Atlantic

3.0%

Mississippi River 

Gulf

49.8%

Texas Gulf

10.1%

East Gulf

0.6%

Interior

9.7%

Pacific Northwest

25.0% California

0.1%

U.S. Grain Inspected and/or Weighed for 

Export by Region and Port Area, 2014, 

% of Total Metric Tons*

*129.7 million metric tons
Ethanol, DDG, Corn Production, Fertilizer, and Barge Traffic

♦ U.S. ethanol production capacity at 198 operating refineries is over 15 billion gallons per year. (Renewable Fuels 

Association, Biorefinery Locations, July 27, 2015).

♦ Over 839 million gallons of ethanol were exported in calendar year 2014. (U.S.Census Bureau Trade Data). 

♦ Major multimodal ethanol terminals include Albany, NY, Baltimore, MD, Chicago, IL, Houston, TX, Linden, 

Newark, and Sewaren, NJ, New Orleans, LA, Sauget, IL, Providence, RI, and Tampa, FL.

♦ Barges move an estimated 5 percent of ethanol.

♦ Barges also move some of the fertilizer needed to grow corn for the production of ethanol, as well as some of the 

distillers’ dried grains (DDG), an ethanol by-product used for animal feed.

♦ For every gallon of corn ethanol, about 6.34 pounds of DDG are produced. Over 11.3 million metric tons of DDG 

were exported in calendar year 2014. (U.S.Census Bureau Trade Data).

♦ USDA estimates a corn harvested area of 81.1 million acres in 2015/16, yielding 158.8 bushels per acre, with 5.3 

billion bushels, or 34 percent of the total corn supply, to be converted to ethanol and by-products including DDG. 

(September 11, 2015, USDA World Agricultural Supply and Demand Estimates). 

♦ Corn uses about 240 pounds of fertilizer per planted acre, as it has high nitrogen requirements. 

♦ The United States imported 40.6 million metric tons of fertilizer in calendar year 2014. This included nearly 17.9 

million metric tons of nitrogen. (U.S.Census Bureau Trade Data).

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Source: Census Bureau, U.S. Department of Commerce

0

200

400

600

800

1,000

1,200

1,400

1,600

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Thousand Metric Tons

U.S. Monthly Distillers Dried Grains Exports

2012 2013 2014 2015
Barge and Rail Competition

♦ In calendar year 2014, total food and farm product downbound barge tonnage passing through Mississippi Locks 

27, Ohio Locks and Dam 52, and Arkansas Lock and Dam 11 was 40.6 million short tons (U.S. Army Corps of 

Engineers, Locks Performance Monitoring System). 

♦ This included a total of 22,300 downbound grain barges with 35.5 million short tons of grain. 

♦ A total of 35,500 grain barges were unloaded in the New Orleans region, showing that an additional 13,200 grain 

barges entered the river below these 3 locks (U.S. Army Corps of Engineers and USDA GIPSA).

♦ Railroads originate approximately 24 percent of U.S. grain shipments and sent over 416,000 carloads (46.2 

million short tons) to ports in 2014 (Grain Transportation Report).

♦ Railroads take into account barge rates and the spread between U.S. Gulf and Pacific Northwest ocean vessel 

freight rates, and price their services accordingly.

♦ USDA’sTransportation of U.S. Grains, A Modal Share Analysis, 1978-2013 Update, shows that barges moved 45 

percent and railroads moved 35 percent of all grain exports in 2013.

♦ Barges moved 61 percent of corn, 42 percent of soybeans, 40 percent of wheat, and 26 percent of sorghum to 

export grain elevators.

♦ Additional studies have shown that without barge competition, agricultural shippers pay higher rail transportation 

costs, the farther they are from an inland waterway.

1 Mississippi River Locks 27, also known as Chain of Rocks Locks, Granite City, IL, is the last lock for downbound barges on the Mississippi 

River. For purposes of measuring downbound tonnages on the Ohio River, the U.S. Army Corps of Engineers collects data at Locks and Dam 52, 

Brookport, IL, because it is strategiclly located on the Ohio River newar the junction of the Tennessee and Cumberland Rivers. Locks and Dam 53, 

Grand Chain, IL, is technically the last lock on the Ohio River. Arkansas River Lock and Dam 1, also known as Norrell lOck, Tichnor, AR, is the last lock 

on the Arkansas River, bt traffic must use the White River to connect with the Mississippi River. On the White River, Montgomery Point Lock and Dam, 

near Tichnor, AR, is used only during low water conditions.

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Top U.S. Ports for Agricultural Exports

♦ In calendar year 2014, U.S. waterborne agricultural exports totaled 154 million metric tons and

23 percent were moved in containers (PIERS).

♦ During the same period, containers were used to transport 7 percent of total waterborne grain exports and 11 

percent of U.S. grain exports to Asia.

♦ The top five U.S. ports for bulk and containerized agricultural exports were the New Orleans Port Region, Kalama, 

Tacomo, Houston, and Portland. In terms of containerized exports, the top five ports were Los Angeles, Long 

Beach, Oakland, Tacoma, and Savannah.

Top U.S. Ports for Agricultural Imports

♦ In calendar year 2014, U.S. bulk and containerized waterborne agricultural imports totaled 40 million metric tons, 

70 percent were moved in containers (PIERS).

♦ The top five U.S. ports for bulk and containerized agricultural imports were New York, Los Angeles, Philadelphia, 

Savannah, and Houston. In terms of containerized imports, the top five ports were New York, Los Angeles, 

Oakland, Long Beach, and Houston.

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Source: PIERS

New Orleans Port 

Region

44%

Kalama

5%

Tacoma

4%

Houston

Portland, OR 4%

4%

Los Angeles

4%

Longview

4%

Seattle

4%

Long Beach

4%

Norfolk

3%

Other

20%

Top U.S. Ports for Waterborne Agricultural 

Exports, 2014
Harbor Channel and Inland Waterway Draft Issues

♦ Inadequate channel depths and widths due to drought and sedimentation can lead to higher transportation costs, 

as barges and vessels may be loaded to less than capacity because of low water.

♦ The number of barges in a tow may be reduced to the to the available channel width, and one-way, or day time 

only traffic restrictions may be imposed.

♦ In these cases more barges and vessels, and additional time may be required to ship a given amount of 

commodities.

♦ There have been extended periods where low river levels and reduced channel widths impeded grain barge 

movements and access to shallow draft ports.

♦ At a 9-foot draft, a barge has 1,500 short tons of capacity; for each foot of reduced draft, the barge loses about 

200 short tons of capacity. 

♦ When harbor channels are at less than authorized depths, S-Class container vessels lose 3,840 tons of cargo 

capacity per foot, Panamax bulk grain carriers lose 2,148 tons per foot, and Great Lakes ocean-bound vessels 

lose 1,389 tons per foot.

♦ Low water on the Great Lakes and unfunded dredging requirements has increased the risk of vessel groundings, 

reduced vessel carrying capacity by at least 10 percent, and increased shipping costs by $40 million a year. 

(2012-13 U.S. Army Corps of Engineers Water Basin Common Operating Picture)

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Source: PIERS

New York

19%

Los Angeles

7%

Philadelphia

6%

Savannah

5%

Houston

5%

Wilmington DE

5% Oakland

4%

Norfolk

4%

Long Beach

4%

Port Everglades

4%

Other

37%

Top U.S. Ports for Waterborne Agricultural 

Imports, 2014
Effects of Temporary Closures on Costs, Receipts, and the Federal Budget

♦ U.S. exporters compete on the basis of world prices.

♦ Temporary closures and restrictions on traffic in harbors and channels due to flooding, drought, sedimentation, 

groundings, natural disasters, man-made disasters, slowdowns, strikes, and lockouts can lead to congestion, 

delays, spoilage, diversion to other modes and ports, higher transportation costs, and lost sales.

♦ Higher transportation costs can result in lower cash bids in interior markets. 

♦ U.S. exporters may be unable to pass on higher transportation costs, as customers can purchase similar products 

from other countries.

♦ In contrast, U.S. importers may be able to pass on higher transportation costs to their customers.

♦ Users of railroads and highways face congestion, constrained capacity, and driver and equipment shortages. 

♦ Authorized channel depths and widths, and locks and dams maintained by the U.S. Army Corps of Engineers 

moderate the effects of congestion, provide resiliency, and enhance recovery after transportation disruptions. 

♦ The Corps works to maintain operable navigation channels through accelerated dredging, rock removal, river 

training structures to remove sediment, strategic management of water releases from reservoirs, routinely 

scheduled surveys, and close collaboration with channel users and the U.S. Coast Guard on river conditions. 

♦ Important partners in a reliable waterway system include: 

▪ U.S. Coast Guard, which provides security, aids to navigation, and implements vessel traffic safety 

restrictions.

▪ National Oceanic and Atmospheric Administration which provides nautical charts and maps, marine 

weather and river level information, surveys after disruptions, and marine debris removal.

▪ Maritime Administration which promotes the development and maintenance of an adequate, wellbalanced, United States merchant marine and marine highways.

▪ Saint Lawrence Seaway Development Corporation which promotes use of the Seaway and maintains and 

operates the two U.S. Seaway locks and vessel traffic control in areas of the St. Lawrence River and Lake 

Ontario, in collaboration with its Canadian partner, the St. Lawrence Seaway Management Corporation.

▪ Federal Maritime Commission which regulates oceanborne transportation in U.S. foreign commerce for 

the benefit of exporters, importers, and the American consumer.

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Want to Know More? Try These Publications:

Studies and reports on modal share, competition, and infrastructure investment

Salin, Delmy. Brazil Soybean Transportation Indicator Reports. August 2015. U.S. Department of Agriculture, Agricultural Marketing 

Service. Web. http://dx.doi.org/10.9752/TS052.08-2015

McCullough Gerard J. Constrained Market Pricing and Revenue Adequacy: Regulatory Implications for Shippers and Class I U.S. 

Freight Railroads. Staff Paper P15-5 at University of Minnesota. . August 2015. Web. http://apeclib.cfans.umn.edu/dbtw-wpd/new2000.

htm.

U.S. Container Port Congestion and Related International Supply Chain Issues: Causes, Consequences and Challenges. Federal 

Maritime Commission. July 2015. Web. http://www.fmc.gov/assets/1/Page/PortForumReport_FINALwebAll.pdf

Salin, Delmy. Soybean Transportation Guide: Brazil. July 2015. U.S. Dept. of Agriculture, Agricultural Marketing Service. Web. http://

dx.doi.org/10.9752/TS048.07-2015

U.S. Department of Agriculture, Agricultural Marketing Service. Mexico Transport Cost Indicator Reports. July 2015. Web. <http://dx.doi.

org/10.9752/TS054.07-2015>

Sparger, Adam, and Nick Marathon. Transportation of U.S. Grains: A Modal Share Analysis, 1978-2013 Update. June 2015. U.S. Dept. 

of Agriculture, Agricultural Marketing Service. Web. http://dx.doi.org/10.9752/TS049.06-2015

Salin, Delmy, United States–South America Ocean Grain Freight Spreads (Summary), U.S. Department of Agriculture, Agricultural 

Marketing Service, May 2015. Web <http://dx.doi.org/10.9752/TS213.05-2015>

U.S. Department of Agriculture, Office of the Chief Economist and the Agricultural Marketing Service. Rail Service Challenges in the 

Upper Midwest: Implications for Agricultural Sectors – Preliminary Analysis of the 2013 – 2014 Situation. January 2015. Web. http://

www.usda.gov/oce/economics/papers/Rail_Service_Challenges_in_the_Upper_Midwest.pdf

Denicoff, Marina R. , Marvin E. Prater, and Pierre Bahizi, Wheat Transportation Profile. U.S. Department of Agriculture, Agricultural 

Marketing Service, November 2014. Web. http://dx.doi.org/10.9752/TS201.11-2014

Inland Navigation in the United States: An Evaluation of Economic Impacts and the Potential Effects of Infrastructure Investment,” 

University of Tennessee and University of Kentucky, November 2014. Web. http://nationalwaterwaysfoundation.org/documents/

INLANDNAVIGATIONINTHEUSDECEMBER2014.pdf

Denicoff, Marina R., Marvin Prater, and Pierre Bahizi, Soybean Transportation Profile. U.S. Department of Agriculture, Agricultural 

Marketing Service, October 2014. Web http://dx.doi.org/10.9752/TS203.10-2014

Vachal, Kimberly. Marketing U.S. Grain and Oilseed by Container, DP-272. North Dakota State University, Fargo: Upper Great Plains 

Transportation Institute, September 2014. Web. http://www.ugpti.org/resources/reports/details.php?id=773

Denicoff, Marina R., Marvin E. Prater, and Pierre Bahizi. Corn Transportation Profile. U.S. Dept. of Agriculture, Agricultural Marketing 

Service, August 2014. Web. http://dx.doi.org/10.9752/TS090.08-2014

Salin, Delmy L. and Agapi Somwaru. Eroding U.S. Soybean Competitiveness and Market Shares: What Is the Road Ahead? August 

2014. U.S. Dept. of Agriculture, Agricultural Marketing Service. Web. http://dx.doi.org/10.9752/147.08-2014

“Proposed Public-Private Partnership Projects for U.S. Inland Waterways Infrastructure Financing, Operations, and Governance.” 

December 2013. The Horinko Group. (Prepared for the U.S. Soybean Export Council) Web. http://www.soytransportation.org/

newsroom/PrivatePartnershipsforInlandWaterways.pdf

Analysis of Rural Infrastructure and Remedial Recommendations for the Eleven STC Member States. November 2013. (prepared for 

Soy Transportation Coalition). Web. http://www.soytransportation.org/newsroom/AMoreProductivePathForward1113.pdf

Panama Canal Expansion Study Phase 1 Report: Developments in Trade and National and Global Economies. November 2013.

U.S. Department of Transportation. Maritime Administration. Web. http://www.marad.dot.gov/wp-content/uploads/pdf/Panama_Canal_

Phase_I_Report_-_20Nov2013.pdf

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Flynn J. Adcock, Juan Villa, Mark Welch, Jose Antonio Perez-Vidales, C. Parr Rosson, III. Tracking U.S. Grain, Oilseed and Related 

Product Exports in Mexico. CNAS Publication Number 2013-01. November 2013. Web. http://cnas.tamu.edu and http://dx.doi.

org/10.9752/TS144.11-2013

Taylor, April, Profiles of the Top U.S. Agricultural Ports. U.S. Department of Agriculture, Agricultural Marketing Service, September 2013. 

Web. http://dx.doi.org/10.9752/TS092.09-2013

“Potential and Implementation of Alternative Funding and Finance of the USACE Civil Works Mission” 2013-R-06. June, 2013. Louis 

Berger Group (prepared for Institute for Water Resources, U.S. Army Corps of Engineers. Web. http://www.iwr.usace.army.mil/

Portals/70/docs/iwrreports/2013-R-06.pdf

“New Approaches for U.S. Lock and Dam Maintenance and Funding.” January 2013. Center for Ports and Waterways, 

Texas Transportation Institute (prepared for United Soybean Board). Web. http://www.soytransportation.org/newsroom/

TimeForANewApproach010713.pdf

“Failure to Act: The Economic Impact of Current Investment Trends in Airport, Inland Waterways, and Marine Ports Infrastructure.” 

September 2012. Economic Development Research Group. (prepared for American Society of Civil Engineers). Web. http://www.asce.

org/uploadedFiles/Issues_and_Advocacy/Our_Initiatives/Infrastructure/Content_Pieces/failure-to-act-ports-aviation-report.pdf

“Farm to Market, A Soybean’s Journey from Field to Consumer.” July 2012. Informa Economics (prepared for United Soybean 

Board, U.S. Soybean Export Council, and Soy Transportation Coalition). Web. http://www.soytransportation.org/FarmToMarket/

FarmToMarketStudy082012Study.pdf

“Cost of Project Delays: An Estimate of Foregone Benefits and Other Costs Related to Schedule Delays of Inland Waterways Projects.” 

June 2012. HDR Decision Economics. (prepared for National Waterways Foundation). Web. http://nationalwaterwaysfoundation.org/

study/HDRstudy.pdf

“U.S. Port and Inland Waterways Modernization: Preparing for Post-Panamax Vessels.” June 20, 2012. Institute for Water Resources, 

U.S. Army Corps of Engineers.

“A Modal Comparison of Domestic Freight Transportation Effects on the General Public, 2001-2009.” February 2012. Center for Ports 

and Waterway, Texas Transportation Institute. (prepared for National Waterways Foundation.) Web. http://nationalwaterwaysfoundation.

org/study/FinalReportTTI.pdf

“America’s Locks & Dams: A Ticking Time Bomb For Agriculture?” December 2011. Center for Ports and Waterways, Texas 

Transportation Institute. (prepared for United Soybean Board) Web. http://unitedsoybean.org/wp-content/uploads/Americas_Locks_

And_Dams.pdf

“Panama Canal Expansion: Impact on U.S. Agriculture.” September 2011. Informa Economics (prepared for United Soybean 

Board, U.S. Soybean Export Council, and Soy Transportation Coalition). Web. http://www.soytransportation.org/newsroom/

PanamaCanalExpansionImpactOnUSAg.pdf

“Study of Rural Transportation Issues.” April 2010. U.S. Dept. of Agriculture and U.S. Dept. of Transportation. Web. http://www.ams.

usda.gov/services/transportation-analysis/rti

Temporary closures

Meyer, Seth, Luis Fellin, and Peter Stone, September 2007. “Impact of a Lock Failure on Commodity Transportation on the Mississippi 

or Illinois Rivers.” Food and Agricultural Policy Research Institute. Web. http://www.fapri.missouri.edu/wp-content/uploads/2015/02/

FAPRI-MU-Report-30-07.pdf

“Effects on Agriculture of a Closure of West Coast Port Facilities,” United States District Court for the Northern District of California, 

San Francisco Headquarters, United States of America, Plaintiff, v. Pacific Maritime Association, and International Longshore and 

Warehouse Union, Defendants, Declaration of Ann M. Veneman, Secretary of Agriculture, October 7, 2002. 

Higher transportation costs, lower cash bids

Denicoff, Marina. “Carry and Basis: Grain Market Signals and Transportation Implications.” U.S. Dept. of Agriculture, Agricultural 

Marketing Service. Grain Transportation Report. December 23, 2010. pp. 2-3.Web.

Nibarger, Daniel, Pierre Bahizi. “Commodity Basis, Price Spreads, and Transportation Cost.” U.S. Dept. of Agriculture, Agricultural 

Marketing Service. Grain Transportation Report. September 2, 2010. pp. 2-3.Web.
“Transportation and The Farmer’s Bottom Line.” June 2010. O’Neil Commodity Consulting (on behalf of the Soy Transportation 

Coalition and the United Soybean Board).

Nibarger, Daniel. “Basis and Transportation Cost Primer.” U.S. Dept. of Agriculture, Agricultural Marketing Service. Grain Transportation 

Report. July 2, 2009. pp. 2-3.Web.

Photo credits, reading left to right

1) Maersk Line

2) Wikemedia Commons, Kelly Martin

3) Wikimedia Commons

Preferred Citation

McGregor, Brian. A Reliable Waterway System Is Important to Agriculture. October 2015. U.S. Dept. Of Agriculture, 

Agricultural Marketing Service. Web. <http://dx.doi.org/10.9752/TS050.10-2015>

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