Twitter facebook rss
Connect with Us
12-20-13 Banner

Infrastructure should not present roadblocks to global market

Tuesday, March 3, 2015

By the year 2050, it is projected that we will need to have doubled the world’s food supply to meet the expected demand. This will require breadbaskets of the world to participate and share in the challenge. The current roadmap to meeting the necessary goals contains solutions, including the use of science and technology. 

But will there be roadblocks in logistically implementing those solutions and ultimately delivering product to our global consumers? To answer this, we must first visualize the entire food supply chain, including its U.S. infrastructure. What starts at our local farm gate may eventually make its way to some remote areas across Asia. 

Agricultural producers and those providing solutions to produce, condition, store and transport raw resources will find it necessary to develop and build out the pieces required to meet the increasing production volume and global demand. It will require higher capacity combines, larger grain storage systems, more miles of rail lines, more rail terminals, better roads, more axles on trucks to carry heavier loads safely, and the use of big data—all of which will require significant investment from both the private and public sectors. I am convinced that those who choose to invest capital and those who develop the means for the delivery of the science and technology solutions will be rewarded. 

The United States has so many natural logistical “tools,” including, of course, our river systems. In our efforts to utilize these natural tools, we have developed and built locks and dams for our intercostal waterways, high capacity ports and the connectivity to access the Panama Canal. 

Unfortunately, although the natural tools may remain, the infrastructure put in place to utilize the systems may not, at least not with an ability to continue to deliver at the level needed to meet global needs. As a matter of fact, it is clear that the river systems will be the weak link in our ability to deliver. These arteries are critical to our access to the global markets—markets which are expected to be our largest consumer of U.S. agricultural products in 2050. 

Today, the Mississippi River annually carries more than 500 million tons of production volume through a system constructed in the 1930s with an expected 50-year life. With just over 10% of the locks scheduled for upgrades between now and 2080, we will lack the capacity to meet the demands on the system to move our products to the global market place. While it is clear that there will be headwinds in implementing upgrades to this natural tool alone—ranging from limitations on public funding to perceived environmental challenges—it is time leaders recognize this is no time for business as usual. We must seek solutions such as private-public partnerships, or take bold steps such as did former Indiana Governor Mitch Daniels when he succeeded in obtaining approval to lease the Indiana Toll Road for just under $4 billion for 75 years. This toll road lease retuned more revenue to the State in one year than Indiana made in 50 years operating the toll road. Further, the lease revenue fully funded more than $10 billion of road projects across an eight-year period. I would think that similar options are available for our river systems. 

With the upgrades to the Panama Canal, we will now have the ability to load capesize vessels with upwards of 18,000 containers or weights up to 400,000 deadweight tons (DWT).  To meet the demands coming from Asia, we need to expedite our own upgrades so that we can fully utilize the capacity that is now realized with the Panama Canal. 

Agriculture logistics delivering from the field to the fork is comprised of a complex web of independent components, each dependent on the other for success. We need to take action now to be able to deliver to our global consumer in the future.


Kip Tom Kip Tom (kiptom@tomfarms.com)
Managing Member, Tom Farms LLC and President, CereServ Inc.
www.tomfarms.com
View more posts by Kip Tom

The views and opinions expressed in AgChllenge2050 blog posts are solely the opinions of the authors, and not those of Farm Foundation, NFP.