Mike Steenhoek has served as executive director of the Soy Transportation Coalition since it was formed in 2007 by the United Soybean Board, the American Soybean Association, and 13 state soybean boards. The STC exists to promote a cost effective, reliable and competitive transportation system that serves the agriculture industry.
As executive director, Steenhoek’s responsibilities include communicating the importance of transportation issues to soybean growers and processors; establishing and executing the organization’s strategic direction; and building collaborations with other affected industries.
Steenhoek is a member of the Transportation Research Board’s Committee on Inland Water Transportation and the Iowa Department of Transportation’s Freight Advisory Council.
Prior to his work on the STC, Steenhoek worked for United States Sen. Charles Grassley, R-Iowa, for eight years, both in Washington, D.C., and most recently in Des Moines. In Washington, Steenhoek served as the senator’s scheduler and frequent speechwriter. In Des Moines, Steenhoek served as his director of economic development. Steenhoek earned both his bachelor’s and his master’s in business administration from the University of Iowa.
High Plains Journal: Recently, ground was broken for a lock expansion at Lock 25 in Winfield, Missouri—the first of seven lock expansions to be funded under the Infrastructure Investment and Jobs Act, five on the Mississippi River and two on the Illinois River, under a program called Navigation and Ecosystem Sustainability Program. How big of a deal is this for farmers and why?
Steenhoek: Agriculture and the barge industry have been pining for these lock and dam expansion projects for a very long time. We’ve gone through long periods with lots of good intentions and not much happening. This groundbreaking was a real shot of encouragement. This is new construction, the beginning of a new 1,200-foot lock chamber, not just maintenance of what’s already there. It means tows of barges full of soybeans won’t have to be laboriously broken up and reformed to transit the outdated, aging 600-foot chambers that can no longer easily accommodate modern tows. This really will enhance the quality of our supply chains; any enhancement provides real benefits. Our industry is still one of high bulk and very tight margins, so any improvement helps.
What makes projects like this more expensive and lengthy is that the locks have to maintain service while the expansions are being built. It might be easier to shut down and drain the chamber, but you can’t shut down the river.
HPJ: You’ve been doing this job for 16 years. In that time, have you seen any issues shift significantly around ag transportation, or seen some issues come to the forefront?
MS: I’ve seen a shift in the soybean markets to selling more meal rather than whole beans.
There used to be three things customers and shippers cared about when it came to transportation: speed, cost-effectiveness and reliability. But the world has changed, and today “resiliency” has been added as a major supply chain concern. Resiliency is not the same thing as reliability.
The 30-year period between the fall of communism in 1989 and the onset of COVID-19 was perhaps the greatest period of global stability and trade in world history. We built our supply chains for that world—and the assumptions undergirding it. Our old model of reliability worked for that world.
But today we have much more uncertainty in supply chains and global trade than we did 10 years ago, or even five years ago. We’ve had pandemic shocks, energy shocks, climate shocks, geopolitical shocks, all of which have changed how we think about trade and supply chains. The just-in-time manufacturing model has come into question. Risks are proliferating.
Agriculture is still dominated by bulk distribution, but there is a new concern about traceability of agricultural products. There is an established niche of identity preserved agricultural products like specialty grains that are bagged and shipped in sealed containers. This is a viable option for ag products that sell at a premium. But conversations about traceability of ag products are growing even for those whose profitability still depends on bulk movement. Are there other ways of providing this traceability besides bagging and containerization? More important, are customers willing to pay for them?
HPJ: Is it too soon to tell if the merger of Canadian Pacific and Kansas City Southern will provide benefits for agricultural shippers?
MS: This merger combined the sixth and seventh largest railroads, so the Surface Transportation Board looked very closely at the competitive aspects. It’s much different than if we were talking about the two largest railroads merging. STB concluded that the merger is more likely to increase competitive pressures than remove them. We [at the STC] didn’t support or oppose the merger. Hopefully, rates won’t be negatively affected, but time will tell.
Concerns about service issues with the major railroads go back to way before the COVID pandemic. Both railroads and agriculture are industries that need more of a pad in the form of inventories than other industries. Farmers buy more than they need to provide redundancy—in case a combine breaks down, for instance.
The railroads have been under a lot of pressure from Wall Street to improve operating ratios—the return on a dollar spent. Wall Street rewards railroads for short-term improvements in operating ratios, but that’s sometimes at the expense of longer-term maintenance.
HPJ: Does the STC take any position on the push to electrify trucking—notably by California—and its affects both on supply chains in general, and on demand for renewable diesel in particular?
MS: As an organization representing the soybean industry, we are excited about the prospect of increasing volumes of soybean oil being utilized to meet our nation’s sustainability targets. Soybean oil is one of the prominent feedstocks for biodiesel, renewable diesel, and sustainable aviation fuel. With the increased soybean processing both underway and planned, there will be increased challenges and opportunities for transporting both the oil as well as the soybean meal. This is a major area of focus for the soybean industry, including the STC.
David Murray can be reached at [email protected].
