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Soy Transportation Coalition Director: To Cut Food Costs, Boost Freight Rail

In his June 16, 2008 Des Moines Register column "To rein in cost of food, beef up transportation," guest writer Mike Steenhoek looks at the roll the nation's distribution system contributes to food costs, noting that if more went by rail, costs could be kept lower.

Steenhoek, executive director of the Soy Transportation Coalition, wrote "The primary culprit for today's rising food prices is a more costly distribution system - significantly impacted by the escalating price of oil. A rise in the price of crude oil not only equates to a more expensive gallon of gasoline, but also a more expensive gallon of milk."

Mr. Steenhoek's solution, direct enough resources to maintaining and augmenting our transportation infrastructure.

"A railroad can transport one ton of freight 386 miles on one gallon of fuel," he wrote. "Yet our nation's leaders have missed the opportunity to provide tax incentives to railroads - particularly the shortline and regional railroads serving rural America - to augment their capacity-constrained network. Railroads, largely financed by the private sector, are responding to the increased congestion on their systems by raising rates on their customers in agriculture and other industries. Rail customers have witnessed fuel surcharges of up to $0.70 per car mile, equating to $130,000 in fuel surcharges for a train full of soybeans headed to the West Coast."

Barges and trucks need attention too, Steenhoek writes. "Our country has failed to adequately fund our highways and rural roads. The U.S. Government Accountability Office predicts that the Highway Trust Fund, the primary mechanism for financing federal highway and transit programs, can reach a negative balance as early as 2009."

Steenhoek examined how rural counties are strapped maintaining the first-mile gravel roads that criss-cross the nation's farmland and are often the first link in the distribution chain.

"While a small percentage of vehicle traffic originates in rural Iowa, a large percentage of economic value does. A single delivery of soybeans can have a $12,000 ripple effect on the Iowa economy."

He finishes his article: "In this period of economic uncertainty, our nation's leaders must demonstrate the vision and dedication to these long-term projects that serve our long-term needs. The resulting smaller relationship between the price at the grocery store and the price at the pump would be a welcome relief for Iowa and American consumers."

The Soy Transportation Coalition is an organization established by seven state soybean boards, the American Soybean Association, and the United Soybean Board. The seven participating states encompass 63% of total U.S. soybean production. In addition, the National Grain and Feed Association and the National Oilseed Processors Assocation serve as ex-officio members on the Soy Transportation Coalition's board.

The seven participating state soybean boards are: the Illinois Soybean Association, the Indiana Soybean Alliance, the Iowa Soybean Association, the Nebraska Soybean Board, the North Dakota Soybean Council, the Ohio Soybean Council, and the South Dakota Soybean Research and Promotion Council.

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