1. University Extension/Department of Economics Grain Transportation Infrastructure Pioneer GrowingPoint ® Advisory Board Meeting Kansas City, Missouri Mar. 14, 2011 Chad Hart Assistant Professor/Grain Markets Specialist chart@iastate.edu 515-294-9911

2. University Extension/Department of Economics Grain Flow Surveys Edward Yu and I conducted grain and biofuel flow surveys for the 2006/07 and 2007/08 marketing years in Iowa. 2006/07 Report: http://www.card.iastate.edu/publications/DBS/PD FFiles/08sr102.pdfhttp://www.card.iastate.edu/publications/DBS/PD FFiles/08sr102.pdf 2007/08 Report: http://www.card.iastate.edu/publications/DBS/PD FFiles/09sr103.pdfhttp://www.card.iastate.edu/publications/DBS/PD FFiles/09sr103.pdf

3. University Extension/Department of Economics Survey Format 5 distinct surveys Grain Marketers (Farmers) Grain Handlers Corn Processors (including Ethanol) Soybean Processors Biodiesel Producers

4. University Extension/Department of Economics Shifting Markets for Corn percent

5. University Extension/Department of Economics Transportation for Corn

6. University Extension/Department of Economics Shifting Markets for Soybeans percent

7. University Extension/Department of Economics Transportation for Soybeans

8. University Extension/Department of Economics Grain Hauling Vehicles

9. University Extension/Department of Economics Projected Change in Fleet by 2012 percent

10. University Extension/Department of Economics Producer Shipments

11. University Extension/Department of Economics Producer Ratings

12. University Extension/Department of Economics Producer Ratings

13. University Extension/Department of Economics Shifting Markets for Corn Handlers percent

14. University Extension/Department of Economics Handlers – Corn Transport

15. University Extension/Department of Economics Shifting Markets for Soy Handlers percent

16. University Extension/Department of Economics Handlers – Soybean Transport

17. University Extension/Department of Economics Elevator Ratings

18. University Extension/Department of Economics Elevator Ratings

19. University Extension/Department of Economics Ethanol Markets for 2007/08

20. University Extension/Department of Economics Survey Summary Continued demand for corn from the livestock and ethanol industries is expected to generate more demand for in-state transportation. Although the share of export markets decline, the volume may increase given the expanding harvests. The total vehicles owned by farmers continue to decline, however, the number of heavier vehicles (large wagons and semis) is expected to increase.

21. University Extension/Department of Economics Survey Summary Most of the biofuels and co-products were sold to other states, translating to a higher demand for rail services. Interstate highways received the most positive feedback, gravel roads received the least. High transportation costs was the common hurdle for all five surveyed groups.

22. University Extension/Department of Economics Grain Transportation Channels Source: U. S. Grains Council Value Enhanced Grain Exporter Manual

23. University Extension/Department of Economics Transportation Costs Source: USDA, Agricultural Transportation Challenges for the 21 st Century

24. University Extension/Department of Economics Iowa Roadways As of 2008: Interstates 781 miles Principal and minor arterials 9,748 miles Collectors 31,558 miles Local 72,136 miles Total114,223 miles Source: BTS State Transportation Statistics 2009 Edition

25. University Extension/Department of Economics Iowa Roadway Conditions As of 2008: Very Good 2,456 miles10.1% Good 7,064 miles28.9% Fair 10,944 miles44.8% Mediocre 2,460 miles10.1% Poor 1,498 miles 6.1% Source: BTS State Transportation Statistics 2009 Edition

26. University Extension/Department of Economics Roadway Comparison Source: BTS State Transportation Statistics 2009 Edition Rank State% Mediocre or worse 1 New Jersey 49.5% 2 Hawaii 46.1% 3 California 40.5% 4 Vermont 36.3% 5 Idaho 35.2% 6 Maryland 34.6% 7 Kansas 32.6% 8 Alaska 32.4% 9 Oklahoma 32.3% 10 West Virginia 29.4% Iowa is 25 th with 16.2% of the roads rated “Mediocre” or “Poor”. For the entire U.S. 17.9% of the roads rated “Mediocre” or “Poor”. In Washington DC 96.0% of the roads rated “Mediocre” or “Poor”.

27. University Extension/Department of Economics Iowa Bridges As of 2009: Iowa has 24,799 bridges 5,358 (21.6%) are structurally deficient 1,320 (5.3%) are functionally obsolete Source: BTS State Transportation Statistics 2009 Edition U.S. 11.8% 12.9% Iowa ranks 4 th in structurally deficient bridges

28. University Extension/Department of Economics Costs Due to Rough Roads Source: AASHTO, “Rough Roads Ahead” May 2009 StateCost per Motorist New Jersey $596 California $590 Hawaii $503 Rhode Island $473 Oklahoma $457 Maryland $425 Missouri $410 New York $405 Mississippi $394 Louisiana $388 The U.S. average is $335 Iowa is 11 th with $383 Given Iowa’s nearly 2 million drivers, rough roads costs Iowans $762 million

29. University Extension/Department of Economics Roadway Maintenance Source: National Center for Pavement Preservation

30. University Extension/Department of Economics Needs Assessment The Iowa Department of Transportation looked at its critical needs versus revenue streams Their projections show a shortfall of $267 million per year for critical transportation needs Source: IDOT, TIME-21 Funding Analysis Dec. 2008

31. University Extension/Department of Economics Iowa’s Rail and Grain Facilities Source: IDOT

32. University Extension/Department of Economics Rail Deliveries to Ports Source: USDA-AMS

33. University Extension/Department of Economics

36. Rail Needs Large-scale corridor expansion projects New intermodal terminal facilities New, more efficient locomotives and rail cars Upgrades to railway track and structures New technology and communication systems Source: Association of American Railroads

37. University Extension/Department of Economics Source: Russ Byington US Dept. of Transportation

38. University Extension/Department of Economics U.S. Waterway System Source: USACE

39. University Extension/Department of Economics Upper Mississippi Locks Source: USACE

40. University Extension/Department of Economics Barge Grain Shipments Source: USDA-AMS

41. University Extension/Department of Economics Source: Russ Byington US Dept. of Transportation

42. University Extension/Department of Economics Barge Issues Aging infrastructure in need of repair Expansion of locks to meet barge shipping needs 600 vs. 1200 feet long locks Environmental vs. shipping concerns Source: Association of American Railroads

43. University Extension/Department of Economics

44. Cost -- MN and Japan via Gulf Source: USDA-AMS

45. University Extension/Department of Economics Cost -- MN and Japan via PNW Source: USDA-AMS

46. University Extension/Department of Economics Thank you for your time! Any questions? My web site: http://www.econ.iastate.edu/~chart/ Iowa Farm Outlook: http://www.econ.iastate.edu/ifo/ Ag Decision Maker: http://www.extension.iastate.edu/agdm/