Panama Canal Project Will Benefit U.S. Ag…Eventually

The first major expansion of the Panama Canal was expected to wrap up in time for the canal’s centennial this year, Southeast Farm Press reported. But most work on the canal was suspended when the contractors ran out of money. Officially, the new completion date is December 2015; unofficially, it may be much later.

U.S. agriculture has a big stake in the eventual outcome. According to the U.S. Agriculture Department, 17% of world grain shipments pass through the Panama Canal, and 90% of them are from the United States. Rabobank forecasts a 12% drop in the cost of transporting grain from the Corn Belt to Asia when the expansion project is complete, making U.S. grain more competitive with Brazil, Argentina and grain-exporting countries in Eastern Europe, and boosting Gulf and East Coast ports that have been losing business to the Pacific Northwest.

Once new gates are installed on the lock chambers, larger ships with greater cargo capacity will be able to pass through, and tonnage through the expanded canal is expected to double by 2025.