By Greg Vincent
Bob Metz, a member of the United Soybean Board and a farmer from northeast South Dakota, says any concerns he had about the Panama Canal are alleviated. After visiting the man-made waterway as part of the Top Producer Frontier Study Tour and meeting with the management of the Panama Canal Authority, he feels confident that U.S. agricultural exports can get to the markets that demand U.S. goods.
"We know that we're exporting more than half of our soybeans we raise. Many of those go to Southeast Asia and China," he says. "So the Canal ends up being very important. Everything that comes out of the Gulf of Mexico goes through that Canal to go to China. I feel very good about that Canal and the way it is run."
The Panama Canal
was built in 1914 and was under United States control until President Jimmy Carter signed a treaty with the Panamanian government in 1977 to transition the management to Panama. The management transition was complete at the end of 1999 and Panama has had full control of the system since then.
Last year the Panamanian government announced a major expansion project that will more than double the size of container ships that move through the system. Today the largest ships the Canal can handle are Panamax vessels. As the name implies, that is the maximum size of ship that can move through the Panama Canal. In terms of U.S. grain and oilseed products, that equate to 2 million bu. of product. When the expansion is complete, that capacity will jump 2.5 times, meaning shorter times between the United States and key markets in Asia and more efficient trading.
Despite many rumors circulating about foreign governments taking control of the project, the Panama Canal Authority is funding 100% of the $5.25 billion construction project, says Alberto Alleman, the administrator of the Panama Canal Authority. Most of the project will be self-funded, but loans of $2.3 billion from multi-national banks were secured for the construction projects.