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Corn Growers' Testimony Shows How Antiquated River Infrastructure Hurts
U.S.
Exports
May
23, 2001
FOR IMMEDIATE
RELEASE
Contact:
David Uchic, uchic@dc.ncga.com;
202/628-7001
Gary
Bradley, NCGA Strategic Marketing Communications Manager, 636-733-9004, ext.
139
WASHINGTON (May 23, 2001) -- The National Corn Growers Association (NCGA)
testified on Capitol Hill today that the antiquated locks and dams on
the Upper Mississippi and Illinois Rivers severely compromise producers'
ability to ship commodities when markets demand product.
Tim Burrack, a member
of NCGA's Production & Stewardship Action Team and a farmer from
Arlington, Iowa, told the Water Resources and Environment Subcommittee
that growing congestion due to outdated river infrastructure hinders
"our ability to meet global demand, which ultimately costs us markets
and drives down grain prices."
Overseas markets
are key customers for corn growers and other grain producers. Burrack
testified that corn producers "see global corn and oilseed demand
is increasing, yet U.S. exports are growing at a much slower rate."
The reason is, Burrack stated, that U.S. corn exports historically relied
on a superior transportation network that kept the price of corn competitive
with overseas producers.
Burrack shared his
personal observations from his visits to South American exporters, who
have invested hundreds of millions of dollars into their transportation
infrastructure. Citing the transportation improvements made by competitors
such as Brazil, he stated: "We all compete for the same customers
in a global marketplace and if foreign countries can transport their
corn more cost effectively and rapidly than the United States, they
will capture the market."
A study commissioned
by NCGA found that "growers will lose $364 million per year by
2020" if lock and dam improvements are not made, and this loss
is due to continued congestion throughout the barge and rail system.
In another ongoing study, preliminary results indicate that without
improvements, the average price for shipping corn to New Orleans would
increase by 20 cents per bushel. This higher price reduces exports,
and also reduces the bid prices of corn in the Midwest. And higher barge
rates diminish the competitive pressure on railroads, allowing rail
rates to rise.
Burrack concluded
that "our overseas competitors have found the fortitude to invest
in their transportation systems and these investments are paying off.
Congestion at the locks on the Upper Mississippi and Illinois Rivers
exists. It is real and every year it gets worse. This growing inefficiency
chokes our ability to meet growing global demand, it robs America of
foreign trade, it costs Americans jobs, it drives up the cost of energy
in the Midwest and costs farmers like me millions of dollars in lost
crop revenue. And the worst part, it will only continue to magnify until
we fix it, or are completely irrelevant in global agriculture markets."
For the Burrack's
full testimony, visit the NCGA web site: www.ncga.com
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