U.S. soybean farmers will reap the possibility of low costs and bigger shipments when the new set of locks slide open in late June on the deepened Panama Canal, according to Mike Steenhoek, executive director of the Soy Transportation Coalition.
The $5.25 billion dollar project has expanded the canal, creating a deeper, wider set of locks that can handle larger ships that sink up to a depth of 50 feet. Before, it could only handle ships with a draft of 39½ feet. That means exporters can load more soybeans per ship, cutting transportation costs, Steenhoek said.
That could make U.S. soybeans more competitively priced in the global market.
“When you’re able to load more soybeans per vessel, you’ve got more revenue producing freight spread over a cost of a particular ship,” said Steenhoek.
A typical ocean vessel is typically loaded with 2.1 million bushels (of soybeans) so if there is 500,000 (bushels), beyond that, “it is quite notable,” Steenhoek observed.
Overall, the Panama Canal handles 600 million bushels of U.S. soybeans annually, according to Steenhoek.