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Nearly A Century Old, Panama Canal Still Vital To Midwest

A massive expansion of the Panama Canal to meet the demand of the 21st Century is set to open as soon as early 2015.

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    Photo: Jean-Pierre Martineau (Flickr)

    A loaded container ship passes through the Miaflores Locks on the Panama Canal in 2006.

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    Photo: Amy Mayer/Harvest Public Media

    A mechanical “mule” helps pull ships through the canal. Construction on an expansion of the canal could be finished in early 2015.

Need For Expansion

When it opened in 1914, the Panama Canal introduced the harvest from Midwest farms to the world and helped link U.S. farmers to the global economy. Nearly a century-old, the canal today remains an important connector of global trade, from the U.S. heartland to Asia.

“Obviously it’s one of our major achievements,” said Bill Angrick, a former state Ombudsman of Iowa who was born in the Canal Zone and has studied the engineering marvel. “It’s like going to the moon. It’s something we did well and did right.”

But as international trade surged and modern ships got too big for the waterway, the Panama Canal became a bottleneck. A massive expansion to meet the demand of the 21st Century is set to open as soon as early 2015.

Export Market

From the fruit we eat to the farm products we export, Midwesterners will be rewarded.

“I think it will keep prices in check,” said Chris Schrage, the global business opportunities coordinator at the University of Northern Iowa. “Bananas, all the grapes from Chile – all of those things can be moved in faster to us and have less chance of spoilage and wastage for the suppliers and intermediaries in the supply chain.”

The primary impact for exporters will be on trade between the world’s largest economies: the U.S. and China, as well as the rest of Asia. The export market is becoming more and more important to U.S. farmers, who exported more than $140 billion worth of product overseas each year for the last two years.

“600 million bushels of soybeans went through the Panama Canal last year and that’s the No. 1 U.S. agricultural product that utilizes the canal,” said Mike Steenhoek, director of the Soy Transportation Coalition.

Some American farmers stand to benefit from the canal’s expansion, too. New supertanker ships can accommodate an additional half-million bushels of soybeans, saving time and money for buyers, and a larger canal means that more supertankers can travel through.

“It could save 35 cents per bushel of soybeans to our ultimate customer, say in Asia,” Steenhoek said. “So 35 cents per bushel of soybeans passed on to the customer – that’s really going to help us remain competitive.”

The improved 50-mile long canal will herald two-way traffic and 24-hour service. But an expanded Panama Canal won’t solve every export issue. Many ag groups hope new legislation will green light upgrades to the aging lock and dam system Midwest rivers, and many farmers, depend on.

Harvest Public Media

Harvest Public Media is a reporting collaboration focused on issues of food, fuel and field. Based at KCUR in Kansas City, Harvest covers these agriculture-related topics through an expanding network of reporters and partner stations throughout the Midwest.

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