09/02/08 Getting the Crop to Market

Getting the Crop to Market. I'm Greg Martin with today's Line On Agriculture. Fall is right around the corner and with it harvest time. Growing up in the Mid West it was fun to watch the wheat trucks rolling past our house on the way to the grain elevator. In fact my first real job was unloading those grain trucks and loading it into railroad cars. Today, hauling the nation's harvest to market has difficulties beyond the jump in diesel prices. Infrastructure log jams have become a big problem, too. FRANCL: We're looking at the potential for the second largest corn crop in history and about the fourth largest soybean crop, so obviously there are concerns. Where are we going to be able to put this? Are we going to be able to get to the markets? American Farm Bureau economist Terry Francl says inadequate storage space, too few rail cars and old-fashioned locks and dams all add to a significant problem. FRANCL: A lot of our highways, bridges and roads are somewhere near the area of 40, 50, 60 years or older and these things simply wear out over time and so you have to allocate the money to upgrade those and when there are budget deficits it's always difficult to do this but the longer it gets postponed the more expensive it's going to be to fix. Congress has approved renovations for locks and dams along the Mississippi River  which carries the majority of the nation's agricultural exports. But they haven't approved funding for the project, which is estimated to cost more than $2 billion over 20 years. FRANCL: Hopefully the legislatures, both at the federal and the state level, will see fit to put more funds into this, but it's an issue that is going to grow. The cost of storage and the freight and to the extent that moves up or there are losses occurred, that's going to be reflected back to lower prices to farmers. Overall the inability to move the crop effectively will result in lower costs farmers can get. FRANCL: We have to go through this infrastructure and to the extent that it's delayed or interrupted, that decreases the value of the crops. I have seen estimates that suggest we could lose one, maybe two percent of the value of the crops. If you have a corn crop, 12 billion and some bushels, that's worth a little over $5 a bushel, you're talking about $60 billion. So one or two percent of that you're getting up close to a billion dollars. That's today's Line On Agriculture. I'm Greg Martin on the Northwest Ag Information Network.