Empty Shipping Containers On East Coast Could Profit U.S. Soybean Farmers
Monday, June 4th, 2012
Shipping U.S. soybeans and soy meal to Europe, in what would otherwise be empty containers from East Coast ports in the United States, may have profit potential for U.S. soybean farmers as another opportunity to export their crop and increase competitiveness.
A checkoff-funded analysis conducted through the United Soybean Board's (USB's) Global Opportunities (GO) program studied the potential for shipping containerized soy to Europe and the additional profit it could mean for U.S. soybean farmers and the U.S. soy industry.
Ocean freight cost is the major factor. Freight from a U.S. East Coast port to Europe must cost less than $1,000 per 40-foot container (950 bushels, or 25.5 metric tons of soybean meal) to compete with Argentine meal delivered in bulk cargo ships.
The checkoff-funded study shows three sectors of the soy industry need to come together for successful and beneficial transactions: U.S. exporters, carriers and European Union (EU) purchasers.
U.S. soy meal exporters:
• Must reintroduce U.S. soy meal in the EU market as a superior protein source and gain market share.
• Must make business connections with feed buyers who work for the European broiler, swine and other animal ag sectors.
• East Coast ports demonstrating the greatest potential for shipping soy in containers include Charleston, S.C.; New York City; Norfolk, Va.; and Savannah, Ga.
• Must keep ship fleets moving to stay competitive.
• Repositioning (getting empty containers back to where they are needed) is a challenge.
• Look for new, stable business, so they should be open to soy meal. This project educated shipping lines about the volume of EU soy imports and the number of potential new customers in the feed milling industry.
• EU feed millers rely on traders and crushers to acquire soy meal.
• Millers want to diversify sources and increase quality and protein content - U.S. soy meal fits this bill.
• Containerized shipments offer benefits and less risk that would attract small to midsize millers.