For Minnesota’s ag and food sector, transportation is a key part of keeping the industry—and our economy in general—competitive.
By Tamara Nelsen, Executive Director, Minnesota AgriGrowth Council
Minnesota’s special landscape has made agriculture a cornerstone of our state’s economy throughout its history, a cornerstone upon which many of Minnesota’s other major industries have been built. In fact, the agricultural industry generates nearly one-fifth of the state’s overall economic activities. One of every five Minnesota workers has a job that is directly or indirectly related to agriculture. Whether you’re in Eagan or Eveleth, Worthington or West St. Paul, International Falls or Inver Grove Heights, ag, food and related industries are providing jobs and contributing to our economy.
Nationally, Minnesota is one of America’s leading agricultural producers, ranking fourth in the United States in agricultural exports, providing a reliable source of food and clothing for an ever-growing consumer population here and around the world.
And while agriculture is not as visible an economic driver in some parts of the state as it is in others, it supports the development of many other industries in Minnesota, including manufacturing, transportation, and the wholesale and retail trades, and it is still the foundation of a significant portion of the state’s businesses and jobs, including some of the state’s largest employers.
It’s a huge responsibility.
But it takes more than great soil, climate and water resources to keep agriculture contributing to the state’s economy in this significant way.
One vital piece to keeping the agriculture industry ticking in Minnesota is our transportation infrastructure: the highways, rail lines and waterways over which producers move goods around our state, throughout the U.S., and eventually to markets around the world. The ability to get goods to market—and for consumers to buy them—is wholly dependent on the condition of our transportation infrastructure.
For everyone in our state, including farmers, ag producers, and agri-businesses, to get their goods to market we must have an updated, multimodal system of roads and bridges, rail and waterways. Major employers—firms like General Mills, Cargill, CHS and Land O’ Lakes—depend on rural producers being able to get their goods to market efficiently.
Multiple modes.
Trucks tend to carry more valuable freight and make a large portion of the last-mile trips, while long-distance shipments of heavier, less valuable goods tend to be made by other modes. We need every link in the chain from farm to plate to be well maintained. Although the share of goods moved by other modes is increasing, truck-only trips remain the primary means of shipping goods as measured by value. Moving goods efficiently over the road means having well maintained roads. Roads in poor condition mean slower trips and more wear and tear on vehicles, while poorly maintained bridges often require long cost-adding detours, as do roads that are not built to stand up to the weight of a fully loaded grain truck.
Shipments by weight have shifted from water to rail, truck and pipeline, but river barge traffic up and down the Mississippi and Minnesota rivers is still a major means of moving goods in and out of the state. According to the Minnesota Department of Transportation, more than 14 million tons of goods were loaded and offloaded to and from barges at the state’s four river ports in 2016. Grain alone accounted for over 7 million tons.[1]
Freight rail is the key other piece of Minnesota’s transportation infrastructure, connecting the state centrally into the web of global trade. Minnesota’s 4,500 miles of railroad track, the eighth largest rail system in the nation, transports 228 million tons of freight each year—over 3.6 million carloads, more than one for every worker in the state. Almost 20% of Minnesota’s rail-transported exports are farm products—the second largest category by weight after iron ore.
Partnering and investing for the future.
Minnesota’s ag and food sector is ready to be a key partner, working with the incoming Governor and his administration to help prioritize transportation funding and helping the public and policymakers statewide understand how important transportation is to keeping Minnesota’s ag industry—and our economy in general—competitive.
We need a state budget that values transportation in Greater Minnesota and makes it a top priority.
Although state highways are meeting or nearly meeting condition targets today, pavement quality is expected to decline significantly over the next four years, according to a 2015 study by MnDOT:
- “Needs are significantly outpacing existing revenue sources.”
- “Smooth pavement enhances mobility, improves fuel economy and reduces the need for vehicle repair and maintenance.”
- “In terms of state highway pavements, this means managing life cycles so that remaining service life is balanced across the system and the investment need is stable and predictable from year to year. Failure to do so will eventually lead to preservation-heavy spending plans or significant declines in system performance.”
In 2017, the state legislature passed the largest transportation funding bill in close to a decade. Nearly $2 billion in transportation-related sales taxes are being directed to the state’s system over the next ten years, including 100% of revenue generated from sales tax on rental cars and approximately 60% of revenues generated from sales tax on auto parts.
The need to invest in our state’s transportation infrastructure is occurring at the same time the global economy is becoming more competitive. Countries like China, India and Brazil are expanding and investing in their economies. The projected boom in global population growth—from 7.6 billion in 2018 to 8.6 billion by mid-2030—is putting pressure on basic resources. Our state’s well-diversified economy, natural resources and food production systems provide us with a strong foundation to compete and win.
But continuing to succeed internationally will require both public and private sector investments in waterways, rail, and ports to keep the goods flowing. The innovation and growth these investments generate will serve as a springboard for meeting global consumer demand.
Transportation is the backbone that connects the regions of our state to one another and our state to the world. For our ag and food industries to grow, we need a comprehensive and sustainable transportation system that includes reliable and convenient transportation options. We look forward to working with the next Governor on a plan to keep us on the leading edge of the global economy.
Tamara Nelsen is the executive director of AgriGrowth, a non-partisan, non-profit member organization representing the agriculture and food systems industry in Minnesota. Before coming to AgriGrowth, Tamara was Senior Director of Commodities at the Illinois Farm Bureau and a senior consultant and Assistant Executive Director at the International Policy Council on Agriculture, Food and Trade in Washington, DC.
[1] Minnesota Department of Transportation, “Navigable Minnesota waterway activity,” http://www.dot.state.mn.us/ofrw/waterways/activity.html