The Andersons' plans to boost storage capacity at Port Houston will bolster soybean supply chain resiliency, farmers say
12/26/2024
By Bridget Dean, Associate Editor
Diversifying product transportation is critical for supply chain resiliency. With soy oil demand on the rise, a surplus of its processing counterpart soybean meal will increasingly need to be exported to new markets.
By 2026, a rail-served export facility in Houston will provide that option to farmers.
The Andersons Inc., an agriculture supply chain management and logistics company, recently announced the signing of a long-term lease at a bulk grain export terminal at Port Houston, with the intent to begin exporting soymeal to small markets in northern Africa, Europe, the Middle East, Latin America and the Caribbean.
In doing so, The Andersons is making a significant investment in the terminal; the company intends to add 22,000 metric tons of storage capacity for soybean meal to its current storage capacity of 6.3 million bushels, according to a Dec. 11 press release. It’s a strategic move in anticipation of the growing demand for soy oil from the renewable fuel sectors. Some of the excess soybean meal will be consumed within the livestock sector domestically, but a significant amount will need to be exported.
“The more you can diversify, the better position you are in for success,” says Mike Steenhoek, executive director of The Soy Transportation Coalition, which comprises 14 state soybean boards, the American Soybean Association and the United Soybean Board.
A group of the coalition’s soybean farmer organizations is chipping in with $275,000 for the facility pre-engineering, design and research costs: the United Soybean Board and the boards from Iowa, Kansas, Missouri and Nebraska, in addition to the Soy Transportation Coalition itself.
The soy industry is jumping at the opportunity to ship excess soybean meal via rail to Houston for export for a number of reasons, Steenhoek says. Perhaps most pertinent is the low water levels in the Mississippi River for the past three years, which has made it difficult to move soymeal down the river. Other issues causing supply-chain friction include weather (notably, hurricanes), labor/management complications such as work stoppages, and geopolitical conflicts.
“[We] want to reinforce our commitment to having a rail sector that can help facilitate our exports,” says Steenhoek. “Here’s an opportunity to connect states west of the Mississippi River to the Gulf of Mexico that does not involve the Mississippi River.”
Primary shippers will include farmers in Iowa, Missouri, Kansas, Nebraska and Minnesota. No railroads have been identified as partners, but Steenhoek anticipates BNSF Railway Co. and Union Pacific Railroad will primarily funnel the soymeal into Houston, based on their network locations.
This investment is the first time the coalition has partnered with The Andersons, but not the first time it has sought out partnerships to benefit the larger soy farming industry.
“The overwhelming majority of the investment for this project is The Andersons – so they’re the ones that really deserve the commendation – but I think there are some real opportunities to do partnerships and collaborations like this,” says Steenhoek.
Farmer-members and leaders of the coalition want to invest in tangible things, he adds. Members of the coalition have already toured the facility. Once the additional soybean meal storage facility is constructed – in 2026, Steenhoek estimates – farmers will be able to see their product loaded and shipped out of the country.
“Soybean farmers played a role in assisting that,” says Steenhoek. “Those are the kind of things that we're really excited about.”
