In the News

TRANSCRIPT

 

Tracy Zea:

Barge transportation is the most fuel-efficient surface mode of transportation. And the reason for that is the capacity that these barges can hold. A 45 barge tow is equivalent to a U.S. aircraft carrier. So if you think about that size going down the river, that you don't see or you don't hear about, it's pretty impressive to think about.

 

Dusty Weis:

Hello and welcome to Wherever Jon May Roam, The National Corn Growers Association Podcast. This is where leaders, growers, and stakeholders in the corn industry can turn for big picture conversations about the state of the industry and its future. I'm Dusty Weis, and I'll be introducing your host association CEO, Jon Doggett. From the fields of the corn belt to the D.C. beltway, we're making sure that the growers who feed America have a say in the issues that are important to them with key leaders who are shaping the future of agriculture. The Mississippi River transports 60% of American corn and soybean exports to market. The massive barges that ply America's waterways are more cost effective than any other form of transportation and also play a key role in getting vital inputs to growers. And yet, most of the infrastructure that makes this possible hasn't been updated since the 1930s that is until now.

 

Dusty Weis:

In this episode, we talk about a key win for the NCGA and other groups who have spent decades pushing Congress to act on this critical infrastructure problem. But if you haven't yet, make sure you're subscribed to this podcast in your favorite app. Also, make sure to follow the NCGA on Twitter @nationalcorn and sign up for the National Corn Guard Association newsletter at ncga.com.

 

Dusty Weis:

And with that, it's time to once again introduce Jon. Jon Doggett, the CEO of the National Corn Growers Association. And Jon, super great to be here in New Orleans with you. We're here for Commodity Classic, America's largest farmer-led, farmer-focused, agricultural and educational experience. And Jon, exports are a pressing issue right now, we've got the war in Ukraine cutting off valuable commodities from that country. And the world is going to be increasingly turning to U.S. farmers to fill that void.

 

Jon Doggett:

Dusty, U.S. farmers are going to do their part to meet the world's demand, but you have to have infrastructure to get that crop down the river and to the port and overseas. And we've been working a long, long time on the Upper Mississippi River system and the locks and dams there that are getting pretty antiquated and certainly need to be upgraded. Some of these locks and dams have been here since the 1930s, they've led to breakdowns. It's a real problem and one that has been very costly for U.S. agriculture. But thanks recently to a bipartisan effort in Congress, the infrastructure investment and jobs act was signed into law and it designated billions of dollars to updating the aging locks and dams along the system. But you know, this didn't happen overnight. And we were talking before we started here a few minutes ago, it's 20 plus years of education and advocacy. And two of the people who have spent a good portion of their career doing this work are with us today.

 

Jon Doggett:

And I'd like to welcome Jim Tarmann, he's the managing director with Illinois Corn Growers, and also with us is Tracy Zea, he's the president and CEO of the Waterways Council, the association dedicated to advocating for a modern national system of inland waterway infrastructure. So gentlemen, welcome and thanks for being part of the podcast.

 

Tracy Zea:

Thanks for having us.

 

Jim Tarmann:

Yeah, it's great to be here, Jon.

 

Jon Doggett:

So before we get into questions, I'm going to ask you each to take a minute and talk about your organization. Talk about yourself and what do you do here. So Jim, start with you.

 

Jim Tarmann:

So I've been on staff with Illinois Corn now I'm entering my 29th year. Illinois Corn Growers Association was formed back in 1972. If I look back, I've been with them for about half of their existence, but my role with corn growers over time has grown. One of the issues that I've tracked very closely, that we're going to be talking about today is the locks and dams and their importance to not only Illinois, but the Midwest. So our organization currently has plus or minus 4,000 members, and we're located in Bloomington, Normal, Illinois.

 

Jon Doggett:

Tracy?

 

Tracy Zea:

I haven't been with Waterways Council as long as Jim's been with Illinois Corn Growers. I've been with Waterways Council for about eight years now. Waterways Council, we are Washington, D.C. based association that advocates for modern, efficient, reliable, inland waterway transportation systems. So what does that actually mean? It means locks and dams, which we're here to talk about today. We are a fairly young association when it comes to Washington, D.C. standards. National Corn Growers has been around, I believe 65 years, next year Waterways Council will be our 20th year. Our membership is very diverse and it's a successful coalition. We have a makeup of operators that actually push the barges, the boats that push the barges then the shippers. We have National Corn Growers, but also nine state corn associations. It's a very successful partnership with ag that we truly do appreciate. And we wouldn't be where we are here today, discussing this major win in the infrastructure bill without ag. So we want to say thank you to that.

 

Tracy Zea:

But also an interesting part of our membership is we have the skilled building traits. Right now, every lock that is being constructed is being constructed by organized labor. And they have really opened up doors to our membership that has helped pushed our advocacy efforts on Capitol Hill pretty far along. And then to make it even more funky, we have environmental groups such as Nature Conservancy and Ducks Unlimited that support us. So it's a collective organization that we take great pride in. And we're thankful for the support from National Corn Growers as well as Illinois Corn Growers and all the corn growers.

 

Jon Doggett:

A very unique coalition of folks that you've brought together. We're going to talk about that in a few minutes, but Jim, in the meantime, tell us about the Upper Mississippi River and it's importance to farmers. The farmers you represent in Illinois, what's their take on the lock and dam situation and its importance?

 

Jim Tarmann:

Well, I guess one of the easiest statement that I usually make about that is you have your east and west coast. And I call the Upper Mississippi River basin our third coast for the Midwest for getting our products. Illinois, for example, more than 40% of the corn that we grow in the state of Illinois is exported via the Illinois and Mississippi rivers. If you add soybeans into that, corn and soybeans collectively together, that's over 60% of our corn and soybeans are exported through the lock and dam system. I mean, quite frankly, we're blessed to have that system. We have all six class one railroads. We have both river systems and we have a strong ethanol processing. So of all the states, the competition that we have and what the river system means to that competition gives us a strong basis in Illinois.

 

Jon Doggett:

A lot of inputs come up the river for farmers.

 

Jim Tarmann:

Absolutely. Grain goes down and inputs come up. So it's very important. And you go on up into Chicago, Chicago Hair gets all of their aviation fuel delivered via the river system. And if you think about how many trucks that takes off the road, plus the safety component of that. I know over time the rail industry has kind of backed away from certain products on delivery just because logistically where they have to travel through some of our major cities and crossings, and sometimes they refuse to carry some of our products. We're blessed that we have the river system to bring it right up through there. It works 24/7, 365. And I would guess that part of our problem is, it operates, like I said, 24/7, 365, and nobody even really knows it.

 

Dusty Weis:

You know, there's something to that if I can chime in here, and this might be the nerdiest thing that I've ever said on your podcast,

Jon.

 

Jon Doggett:

Boy, that's a high bar.

 

Dusty Weis:

That's a high bar to clear, but I'm going to say it anyway. Locks and dams, I would say are the most underrated piece of infrastructure that exists. And I say this for this reason, my wife and kids and I, we were vacationing in Southwest Wisconsin a couple of summers ago. And at one point we had an afternoon to kill and I told my wife, let's just take the kids down, we'll pack a picnic lunch, and we're going to sit in the grass alongside the lock and dam, just north of Prairie du Chien, right there on the Mississippi River. And my wife looks at me and says, "You want to sit and watch boats?" And I'm like, I do. And it's going to be the most entertaining thing that we do this week.

 

Dusty Weis:

And she thought I was nuts, but then we got out there and you see these massive barges coming and going through the lock and dam going up, going down, you've got trains running alongside right there, along the Mississippi River. My kid was two and a half years old at the time and he just had a field day. He was giddy. And you see the scale of those barges, Tracy, and you just have to wonder, holy cow, how does that stack up compared to other forms of transportation in terms of efficiency? They're just so much bigger than trains, so much bigger than semi-trucks. It just has to be a much more efficient way to travel.

 

Tracy Zea:

Yeah, you bring up a good point, especially about the river system and locks and dams being out of sight out of mind. We like to call it the silent R, roads, rail and runways are kind of in the forefront when you think of infrastructure and the river is traditionally not. To give you interesting fact to what you guys talked about inputs coming up the river. So speaking of the Upper Mississippi River system, north of St. Louis, it traditionally has cold winters. So road salt is an unspoken commodity that traditionally helps everyday Americans that people don't realize. As far as the efficiency and the ability that barges are able to handle, barge transportation is the most fuel efficient surface motor transportation. And the reason for that is the capacity that these barges can hold. One 15 average tow barge that goes through a lock is equivalent to over a thousand trucks on the road.

 

Tracy Zea:

So wear and tear to your daily roads is taken off, but also safety. Truck accidents are high and the river system has the best safety rating of any surface transportation. One fact that I really like to tell that really puts things into a perspective. Once you go south of St. Louis, there's no locks and dams on the Mississippi River. So where we gain the most efficiency is they couple up all the barges and you have 45 barge tows. So a 45 barge tow is equivalent to a U.S. aircraft carrier. So if you think about that size going down the river, that you don't see, or you don't hear about, it's pretty impressive to think about all the commodities in there, everything from agriculture to energy products that just really help keep one American competitive on foreign markets, but also help drive down costs for your average American.

 

Jon Doggett:

So you talk about a 45 barge tow, but how many problems are now created by the current system in order to get that 45 barge tow put together below St. Louis? You've got some problems between wherever they started and wherever they got. So what's going on with these antiquated locks and dams, and why is it vital that they get replaced?

 

Tracy Zea:

That is a very, very good question, Jon. So the problem is these locks and dams, as you mentioned in your opening statement were constructed in the 1930s. What was going on during the 1930s? We had steam vessels pushing barges. Well, just like modern ingenuity, there's been advancements in the way that motors work and we are able to push larger barges. So obviously tow sizes have outgrown these locks. Right now, the average size of the lock is 600 feet. So there's a process called decoupling that has to take place on the river system where you pull half of the barges into the actual lock, then you have to reverse all the way back out the lock. Then they have to take a rope system and pull the barges in the lock, through the lock, then refill the lock, go back in, do the whole process again, then tie back up. Which again, you're putting safety at Mariners because the more time they're out tying and untying boats, is more opportunity for something to happen. But that process right there at a 600-foot lock takes about two to two and a half hours.

 

Tracy Zea:

So if you start in Minneapolis, you're going to have to go through 20 plus locks before you get down to the 45, which adds cost to your ag shippers and also to the operators, it's fuel burned. But if you upgrade these locks like Lock and Dam 25 is that got infrastructure funding to 1200 feet, it's only going to take 45 minutes. That's a significant increase that we see.

 

Dusty Weis:

You don't have to decouple. You just pull it in and go.

 

Tracy Zea:

Pull it in and rock and roll.

 

Jim Tarmann:

I was just going to say the two to two and a half hours is kind of a generous time. And that's if everything is working correctly. And I know Tracy would probably agree that in my time being out on the river and advocating, I don't think I've ever seen a tow on time or something not go wrong with something. So, I mean, you're looking at delays sometimes at some blocks of four, even six hours because something goes wrong.

 

Jon Doggett:

And you have to do it 20 times.

 

Jim Tarmann:

Well, and you can see right away with those delays and question of reliability, how you've not seen a lot of investments above the St Louis area just because of that. The St. Louis has kind of become the hub for that. And I think in the last 30 years, since I've been around the only investment that I've seen above St. Louis was one ethanol plant. I mean, other modes of transportation have gradually compensated for an unreliable system.

 

Jon Doggett:

So Tracy Zea, president and CEO of the Waterways Council, talk about the infrastructure investment in jobs act and what's that going to do to make things better?

 

Tracy Zea:

So the infrastructure and jobs act was monumental win for the inland waterways. 2.5 billion was included for inland waterway construction. Those funds were released in January and that funded five projects to completion out of the 15 projects that are currently authorized in our backlog. So one-third of our backlog is completed, that is something. If you look at appropriations, the last 13 years is the same amount for a dollar if you add up the 2.5. But what does agriculture care about? What does the corn growers care about? Is a program called the Navigation Ecosystem Sustainability Program, which was authorized in 2007. It was to modernize seven locks and dams, five on the Upper Mississippi River, two on the Illinois River. And what was big in this infrastructure and jobs act was 732 million provided for Lock and Dam 25 to give everyone a little history, the Navigation Ecosystem Sustainability, NESP program, began study phase in 1991. It was authorized in 2007 and received its first construction funding in 2022.

 

Tracy Zea:

So you're looking at 31 years of a process. People have spent a long time of their career such as Jim advocating for this program and-

 

Jim Tarmann:

No, not at all.

 

Tracy Zea:

And it is just a major win because these locks are outdated as we talked about earlier, they don't accommodate the average tow size, but it really decreases the American farmers' competitiveness in foreign markets.

 

Dusty Weis:

Jim, it's cool to hear about how these upgrades are going to be made to the locks and dams, but what does this mean for corn growers, particularly in Illinois, but all throughout the Midwest? What sort of changes are they going to expect to see short-term and long-term here in terms of getting their grain to market and getting the inputs that they need?

 

Jim Tarmann:

So as Tracy was talking about, there's seven locks and dams that were part of the authorization in 2007 and we just got the first one. So we won't realize the total benefits until all of them are going to be completed. But you're going to see the draw back to the river. Right now just a certain draw area based on the cost of transportation. Well, as that transportation becomes more efficient, that draw area goes out farther. So we'll see more grain going down as world demand continues to grow around the world. I can remember when we first started advocating, we were watching very closely and I had an opportunity to go down to South America and take a look at their infrastructure system that they've been wanting to upgrade. And they've been very slow about that, but I didn't think anybody could be that slow, but we were even slower than that with upgrading ours.

 

Jim Tarmann:

So really just getting the ball rolling on that efficiency, hoping probably within the next eight to 10 years will have all seven locks completed and up and going. And like I mentioned earlier, we really believe that investment will come back to the river system just because how efficient it is. You know, if we're moving more toward a more climate-friendly type transportation, you can't find a better one than the river system.

 

Tracy Zea:

So Jim mentioned the stat on draw about rivers. So right now, according to the core of engineers with a 600 foot river chamber, it's a hundred miles. If you're within a hundred miles of the river, you're going to bring your product to the river. And they claim, if you go up to 1200 feet locks, it'll go out to 200 miles for the river.

 

Jon Doggett:

So what happens when one of the locks goes down, what happens to corn prices?

 

Tracy Zea:

So if a lock goes down right now on the Upper Mississippi River, it shuts down the hole in the waterway transportation system. And the reason for that is there's only one lock chamber. So what NESP is going to do is add another lock chamber at 1200 feet. So if one of those lock chambers go down, you can still move your product.

 

Jim Tarmann:

Specific to price. When hurricane Katrina happened, we saw basis or corn price dropped 50 cents and the river system was shut down for more than 30 days. So 50 cents is what we lost.

 

Dusty Weis:

Nothing could get through the port of New Orleans [crosstalk 00:17:03]

 

Jim Tarmann:

Same thing would happen as Tracy alluded in the Upper Mississippi. Right now, we just have a one way street, if you will. So if one goes down, it's amazing how you'll have 50, 60, 15 barge tows sitting on the river system as far as the eye can see, waiting for the lock to come up. And we've seen that before too.

 

Tracy Zea:

There's a study done by the National Waterways Foundation on what would happen for an unexpected long closure. So a year duration. And it was pretty remarkable about the study. They surveyed shippers in it came back that 50% of shippers if the lock system went down would go to other modes and never come back to the waterway transportation system. On rates going down, obviously when the lock goes down, rail rates and other modes of truck and other surface transportation modes rates go up. So it's more costly to the shipper.

 

Jon Doggett:

One of the things I'd like you to explain for us is, there's a fund that helps run the locks and dams and the inland waterways. How does that work?

 

Tracy Zea:

Yeah, so the fund Jon's talking about is the inland waterway trust fund. This is a per gallon of diesel fuel tax. We used to be 20 cents up until 2015 when industry, as far as the operators pushing the barges and shippers all got together and recognized the need to update our infrastructure and these fuel tax dollars go to update our infrastructure, got together, went to Capitol Hill and asked lawmakers for an increase in their taxes, which a lot of Republicans about fell out of their chair when-

 

Jim Tarmann:

I never will forget when we went to the Hill and now let me get this right, you want to tax yourself? Well, yes we do as long as it goes to what its intended purpose for. So it probably took two or three trips before they got it into their head that somebody was coming in to tax themselves.

 

Tracy Zea:

So the tax was 20 cents. It was raised 45% in 2015, it's up to 29 cents a gallon of fuel. So what does this inland water trust fund pay for? It pays for the modernization of locks and dams. So it pays for 35% of new construction and major rehabilitation.

 

Jon Doggett:

So Lock and Dam 25, how long is it going to take?

 

Tracy Zea:

That's a million-dollar question. If you look at the last several lock projects, Olmsted Lock and Dam, which is on the Ohio River, that took almost 30 years of construction time. And if you look back at the 1930s, when Lock and Dam 25 was in construction, it took about six years. So recognizing right now, the time in America inflation just went up, what? 0.8% to 7.9 and worker shortage, we have better equipment now, bulldozers and tractors, we're hoping that the core can construct and have Lock and Dam 25 up and running in a six to eight year timeframe. It's a major construction project. It's 732 million. We hope they can get it done a lot sooner, but I would expect a six to eight year timeframe.

 

Jim Tarmann:

The big key to that is, it just wasn't a partial appropriation to start Lock 25. It was here you go, here's 732 million, go forth and build it. So they'll go out for bids. I assume Tracy, probably this summer, fall, I've heard as early as springtime to see actual shovel go into the ground, but what's great about it again is it's funded from start to finish. So you don't have contractors coming back and forth like we saw at Olmstead Lock and Dam, they run out of money and then they didn't know whether there was another appropriation going to come. So the construction company would leave and go somewhere else or whatever. Then they'd have to show up to the site again when money became available. So it's very inefficient.

 

Tracy Zea:

If you look at the last project the core did, that was fully funded to completion like Lock and Dam 25. The core got upfront full funding and it came in under budget and on time or ahead of schedule. So they have a track record where they can expedite when they are given the funding. And this is a great opportunity through this infrastructure plan for the core to show that they can construct these locks.

 

Jon Doggett:

What's the next big project after 25?

 

Tracy Zea:

That's a good question that we have an answer for Jon at Waterways Council and I think-

 

Jim Tarmann:

I'll answer it, LaGrange.

 

Tracy Zea:

Jim is correct. LaGrange Lock and Dam. So the users of the inland waterway system have a federal advisory board called the Inland Waterway User Board that partners with the core of engineers on something called the capital investment strategy. This is a document that racks and stacks projects they put them in tier system. So the infrastructure funding funded three out of the four tier A projects. The last tier A project is LaGrange Lock and Dam.

 

Dusty Weis:

And that is where?

 

Tracy Zea:

It's the first lock on the Illinois River as you leave the Mississippi River. So it is actually close to-

 

Dusty Weis:

Beardstown.

 

Tracy Zea:

Beardstown, Illinois.

 

Jim Tarmann:

Well, the uniqueness of LaGrange back to your question about what it means to corn growers, if you look at the river miles between Peoria and LaGrange versus Lock 25 and then 24, we'll see a bigger impact right away. That's why LaGrange is so key to specifically Illinois, if I can and be selfish. But 25 was targeted because of political reasons of Iowa, Missouri, and Illinois working, it benefited all three of them. So it was kind of to get the ball rolling. But now at least from an Illinois perspective, you're going to see us really advocating for LaGrange being selfish.

 

Tracy Zea:

And Jon, you've been in D.C. long enough. Community project funding, AKA earmarks is back and in fiscal year '22, NESP received 45 million for an earmark, which isn't a large number, but it was large. They're testing the water with earmarks. So ways listeners can help move the ball forward is fiscal year '23 appropriations. We're looking for an earmark for LaGrange Lock and Dam. And that will be our number one push as Jim simply stated.

 

Jon Doggett:

One other topic I want to touch on, and you mentioned it briefly, and that is the unique coalition that was put together. And I've worn a little shoe leather out on this issue. When you walk into a congressional office with a bunch of farmers and a bunch of union guys, they kind of wonder, did both of our appointments show up at the same time? So tell us about that. And also you have some folks in the environmental community that have been particularly helpful.

 

Tracy Zea:

Yeah. You're absolutely right, Jon. People are confused when you go around and do introductions and you have an operator, an agriculture farmer and a skilled building trade member. It's a great coalition though. Locks and dams is a bipartisan issue. If you look at the NESP work plan letter to get infrastructure funding, there's over 70 senators and members of Congress that signed that, and that would not have been done without the grassroots from agriculture communities such as the corn farmers, as well as the skilled building trades. Both are very active politically, and it really helps to benefit the locks and dam system.

 

Jon Doggett:

Well, certainly now is not the time to go ahead and restaurant any laurels. And I know you guys at Waterways Council are not doing that. And I certainly know that Jim Tarmann from Illinois Corn is not going to do that, but we still have work to do and advocacy that needs to be performed.

 

Tracy Zea:

Yes sir. The work has just begun.

 

Jim Tarmann:

Yeah. I don't anticipate the other six being any easier than the first one we got done, but-

 

Dusty Weis:

Hopefully it doesn't take another 30 years.

 

Jim Tarmann:

I hope not. I mean, all indications as Tracy said, is the appropriations that hopefully, the Sentinel will pass the 45 million for LaGrange.

 

Tracy Zea:

They did last night.

 

Jim Tarmann:

They did last night? Okay. We're still moving in the right direction, but not going to take our foot off the accelerator.

 

Tracy Zea:

When you get some momentum in D.C. as you know Jon, you got to double down and ride the hot streak while you can and drive it like you stole it, run it until the wheels go off. So we're going to go all in until they tell to stop.

 

Jon Doggett:

There is an [inaudible 00:24:48] and when you're on the right side of that, you need to stay on the right side of that. Yeah, absolutely. Well, Tracy Zea from the Inland Waterways Council and Jim Tarmann from the Illinois Corn Growers. Thank you so much for being with us today. This has been great. The Upper Mississippi River system is a vital way to import and export goods. And if the U.S. is going to truly be competitive in the global marketplace, that system absolutely has to be reliable. And that wouldn't be possible without great advocates like the two of you and countless thousands of others who have advocated for this very important and very vital systems. So thank you again. I'm Jon Doggett, I'm the CEO of the National Corn Growers Association, and we hope you'll join us again soon for the next episode of Wherever Jon May Roam, The National Corn Growers Association Podcast.

 

Dusty Weis:

That is going to wrap up this edition of Wherever Jon May Roam, The National Corn Growers Association Podcast. New episodes arrive monthly so make sure you subscribe in your favorite app and join us again soon. Visit ncga.com to learn more or sign up for the Association's email newsletter. Wherever Jon May Roam is brought to you by the National Corn Growers Association with editing and production oversight by Larry Kilgore III. And it's produced by Podcamp Media, branded podcast production for businesses, podcampmedia.com. For the National Corn Growers Association, thanks for listening. I'm Dusty Weis.