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Container shipping: A chance for Illinois farmers

The state’s soybean association wants Illinois farmers to think inside the box: specifically, the 40-foot shipping container.

The U.S. trade war with China means Illinois has, for the time being, lost its best customer for soybeans. Instead of China buying 70,000 metric tons of beans stashed in a ship’s belly, the Illinois Soybean Association wants farmers to consider shipping smaller quantities of soybeans via container to customers in Taiwan and Southeast Asia.

The goal is to replace some of the lost Chinese sales volume, 24 metric tons at a time. (That’s how much a container can hold, meaning it takes 2,916 containers to equal one bulk ship.) While other countries may be buying in smaller quantities, at least they’re buying.

“The markets have existed, but people want to talk about it a little bit more and see what the possibilities are,” said Eric Woodie, a trade analyst for the soybean association. “When people start losing money, they start paying attention to what other options might look like.”

Illinois farmers are leading this year’s soybean harvest with 688 million bushels out of 4.6 billion gathered across the United States.

The record harvest combined with Chinese tariffs has sent prices plummeting to $8.87 per bushel. Eight months ago, they were $2 higher. Many farmers are storing their crops and hoping prices will improve, risking spoilage.

Yet infrastructure limits the ability of farmers to sell into the container market. Soybean farmers who grow their crop closer to Chicago, a hub of trains, trucks and intermodal yards, have more opportunities to tap. Shippers and third-party logistics companies bring in more revenue when they can return full containers to Asia, rather than empty ones.

About 5 to 7 percent of the U.S. soybean export crop moves in containers, according to a 2014 study published by professors at the University of St. Francis in Joliet. With business and governmental support, that could increase to 12 to 15 percent.

Read more on Crain's Chicago Business.


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