Market Trends: Current and Future Cargo
April 23, 2015
Moffatt & Nichol Background
Established in 1945 in Long Beach, California, currently:
•
•
Offices in The Americas, Europe, Middle East and Pacific Rim
Practices: Goods Movement, Energy, Ports, Coastal, Urban Waterfronts & Marinas, Inspection &
Rehabilitation
Planning and design of marine and freight transportation
•
Terminal design for all types of freight and passenger movement
•
Freight planning and market analysis
•
Investment/privatization analysis
•
Strategic development plans
•
Port selection/network analysis
•
Coastal engineering
•
Port and waterside construction (marinas)
•
Railroads and capacity expansion
•
Environmental issues/emission modeling
•
Port security
Commentary and presentation materials on this occasion are based on the personal views of
the speaker and may not coincide with opinions held by Moffatt & Nichol or its employees.
Summary
 US has been the driver of global growth for 4 years, rest of world is following with expansionary policies
 Until the Fed raises interest rates its premature to declare the economy “recovered”
 Low inflation, wage increases and commodity prices = low pressure to raise interest rates
 Medium to long term outlook is all about the trade deficit and infrastructure
 ACE (Agriculture, Capital Goods, and Energy) sectors are the key to prosperity
 But not without more inland waterway infrastructure investment
 What happens if we don’t change our infrastructure development strategies?
 Other countries will invest and are doing so right now
 US export competitiveness in some markets will decline
Moffatt & Nichol
3
US has led global growth
After pulling the world economy into a severe recession, the US has been driving global economic recovery, more so in the
last few years. Europe and Asia should be stepping up soon and eventually commodity-exporting economies.
CONTRIBUTIONS TO CHANGES IN GLOBAL REAL GDP GROWTH: 2014 COMPARED TO 2013
10%
Consumer Countries
8%
Consumer Goods Commodity Exporter
Exporter Countries Countries
6%
4%
2%
Australia
Iran
Canada
Saudi Arabia
Brazil
Russia
Turkey
Korea
Mexico
Indonesia
India
China
Spain
Italy
UK
France
Germany
-2%
Japan
US
0%
-4%
-6%
-8%
4
Source: Bloomberg, IMF, Moffatt & Nichol
US economy is in a virtuous cycle until the Fed decides it isn’t
As of May 2014, employment in the US exceeded the previous peak level of December 2007. Monetary and fiscal policy
supported increased spending by employed consumers which eventually reached levels where the private sector needed to
hire more labor. This in turn helped consumer spending, resulting in more employment… a virtuous cycle.
140
$1.6
120
$1.4
$1.2
Millions on Payrolls
100
$1.0
80
$0.8
60
$0.6
40
$0.4
$0.2
0
$0.0
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
20
$ Trillions (inflation adjusted)
EMPLOYMENT AND RETAIL SALES VOLUMES
Recession
Employment (left)
5
Source: Bureau of Labor Statistics, National Bureau for Economic Research, Moffatt & Nichol
Real Retail Sales (right)
Inflation risk is less than growth risk
Core inflation (excluding volatile food and energy prices) provides a better indication of consumer price trends.
The Federal Reserve is not under pressure from inflation to raise interest rates. Japan finally broke out of deflation but
economic growth remains stalled. The Euro Area is struggling to increase inflation. China is actually experiencing
deflation.
If anything the greatest risk to the economic outlook is the possibility of a vicious deflation cycle.
CORE CONSUMER PRICE INFLATION TRENDS
4.0%
3.0%
Japan
2.0%
US
1.0%
Euro Area
Sep-15
May-15
Jan-15
Sep-14
May-14
Jan-14
Sep-13
May-13
Jan-13
Sep-12
May-12
Jan-12
Sep-11
May-11
Jan-11
Sep-10
May-10
Jan-10
Sep-09
May-09
-1.0%
Jan-09
0.0%
China
-2.0%
-3.0%
-4.0%
6
Source: Federal Reserve, Moffatt & Nichol
Strengthening US Dollar trend has likely run its course
With the US economy leading global growth and inflation, US interest rates are likely to rise ahead of interest rates in other
currencies. As long as an economy is relatively stronger and this is reflected in rising (real) interest rates, its currency tends
to strengthen. However, correlation between US Dollar strength and export growth is only mildly negative. Strong growth in
export destination countries can overcome the effect of a strengthening US dollar. Investments in infrastructure can also
make exports more competitive.
DOLLAR-EURO EXCHANGE RATE AND THE SPREAD BETWEEN US AND GERMAN GOVERNMENT BOND YIELDS
3
Weaker Dollar, Lower US interest rates
1.8
2
1.6
1
1.4
0
1.2
-1
1
-2
0.8
-3
0.6
-4
0.4
-5
Stronger Dollar, Higher US interest rates
0.2
-6
USD/EUR
Source: Trading Economics, Moffatt & Nichol
German-US 10 year (right)
2014
2012
2010
2008
2006
2004
2002
2000
1998
1996
1994
1992
1990
1988
1986
1984
1982
-7
1980
0
Spread Between German and US 10 Year
Government Bond Yield
US Dollars per Euro
2
US trade deficit remains high but declining
The US has helped the world economy, particularly emerging market economies develop by allowing its trade balance to be in deficit. This
isn’t sustainable in the long run. Reducing the trade deficit is important for employment and therefore economic growth. The decreasing
US oil trade deficit has directly helped strengthen our goods balance and in the process helped employment recover from the deep 20072009 recession. But more is needed.
US TRADE DEFICIT
$40
$20
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
$0
-$40
-$60
… by the same amount
-$80
Goods Balance
Services Balance
Oil Trade Balance
Moffatt & Nichol | Trading Patterns: Successfully Dealing with Change
The reduction in the oil trade deficit
has decreased the overall trade
deficit…
-$20
8
The world wants to trade
From 1950 to 2013 manufactured goods trade has grown twice as fast real GDP. Among other trends, this is due to:
- Free Trade Agreements
- Maritime and inland connectivity infrastructure
- Information/Communication Technology
- Demographic trends
WORLD REAL GDP AND TRADE INDEXES 1950-2013
8000
?
1950 - 2013 CAGR
7000
6000
M an u f actu red G ood s
7.2%
E xtraction G ood s
4.0%
G DP
3.6%
Ag ricu ltu ral G ood s
3.6%
China
When will this become an S-curve?
5000
Korea, Taiwan
4000
Manufactured Goods
3000
Extraction Goods
2000
GDP
Japan
Agricultural Goods
1000
2010
2007
2004
2001
1998
1995
1992
1989
1986
1983
1980
1977
1974
1971
1968
1965
1962
2013
9
Source: WTO, Moffatt & Nichol
1959
1956
1953
1950
0
Ships have been getting larger
10
The “Grey Tsunami”
Besides under-employment, the US has an increasing share of its population that is of retirement age. This impacts labor
availability and consumer spending.
PEOPLE TURNING 65 AND THEIR SHARE OF US POPULATION: 1900 - 2050
25%
Last Boomers 2,000
Turn 65 (2026)
1,800
Kemmsies turns 65!
20%
1,600
1,200
Share
15%
1,000
10%
800
First Boomers
Turn 65 (2011)
600
5%
400
200
65 and Over Share of Population (left)
Source: International Monetary Fund, Moffatt & Nichol
2047
2040
2033
2026
2019
2012
2005
1998
1991
1984
1977
1970
1963
1956
1949
1942
1935
1928
1921
1914
1907
0
1900
0%
Increase in Over 65 Population (right)
Thousands of People
1,400
The World’s Population Is Aging
Proportion of Population Above 55 Years of Age
60%
Japan
50%
Europe
China
40%
Canada
US
30%
Brazil
Mexico
20%
India
10%
0%
1990
2000
2010
2020
2030
2040
2050
Wage differentials drove “offshoring” and eventually “on-shoring”
It is unlikely that manufactured goods which are labor intensive will be manufactured in the US. Besides lower production
costs, emerging markets also have faster growing demand for manufactured goods. It is not surprising that many factories
moved to China and other Emerging Asian economies. Wages are rising in China, its households could eventually be able to
afford the goods they produce. This deliberate effort at “Fordism” sets China apart.
MANUFACTURING WAGE COMPARISONS IN US$ IN 2008 AND 2014E
$55,000
44% of World Population
$50,000
$45,000
$40,000
$35,000
$30,000
$25,000
$20,000
Developed Market
sourcing is shifting from
China to Central America
and South Asia
$15,000
$10,000
$5,000
$0
Source: UN ILO, Moffatt & Nichol
9% of World Population
The ultimate global logistics challenge
Emerging markets are more than just large economies growing quickly, they are developing significant middle classes too.
For the developed economies to sustain higher growth in the long term they have to focus on this market segment. Developed
economies need growth in order to support their retirees… need more infrastructure and less waste if these forecasts are
correct. This is the ultimate global logistics challenge.
WORLD POPULATION AND OECD GLOBAL MIDDLE CLASS PROJECTIONS
14
Source: OECD, Census Bureau
What can the US can competitively export?
Agriculture, Capital goods and Energy.
Labor is more expensive and capital is cheaper in the US compared to fast growing emerging market economies such as
China. The US has comparative (and competitive) advantages in the production of goods that use little labor. This is shown in
the list of goods that the US has been prone to export.
This list applies to the Americas as well.
TOP 10 HIGH POTENTIAL US NET EXPORTS1
Containerized
Wood Pulp Scrap and Waste
Oil Seeds (Soy)
Raw Hides And Leather
Cotton - Untreated, Yarn And Woven Fabric
Animal Feed
Meat and Other Edible Animal Parts
Plastics Feedstock and Manufactured Goods
Iron And Steel
Paper and Paperboard
Chemical Products
Cereals
Organic Chemicals
1 Based
Score
9.4
1.1
0.8
0.7
0.7
0.3
0.2
0.1
0.1
0.1
0.1
0.1
Bulk/Breakbulk
Oil Seeds (Soy)
Meat and Other Edible Animal Parts
Cereal Grains
Animal Feed
Wood And Charcoal
Crude Oil and Refined Petroleum/Natural Gas Products
Live Animals
Wood Pulp Scrap and Waste
Fish and Crustaceans
Dairy Products, including Eggs and Honey
Organic Chemicals
Plastics Feedstock and Manufactured Goods
Score
32.7
28.7
3.9
3.4
0.4
0.4
0.3
0.2
0.2
0.1
0.1
0.1
on relative comparative advantage as defined by Bela Belassi
15
Source: US Census Bureau, Moffatt & Nichol
>680M short tons of cargo was moved using the Mississippi in 2012
CARGO MOVING ON MISSISSIPPI RIVER – DOMESTIC FUEL FLOWS DOMINATE BUT EXPORTS ARE GROWING FASTER
Total Domestic
Exports
80
Millions of Short Tons
200
40
20
0
2008
2009
2010
2011
2012
120
Food and Farm Products
Chemicals and Related Products
Petroleum and Petroleum Products
Coal,Lignite and Coal Coke
Crude Materials
Primary Manufactured Goods
80
Imports
Millions of Short Tons
80
40
0
2008
Coal,Lignite and Coal Coke
Food and Farm Products
Source: USACE
2009
2010
2011
2012
Petroleum and Petroleum Products
Crude Materials
Chemicals and Related Products
Primary Manufactured Goods
60
40
20
0
2008
2009
Petroleum and Petroleum Products
Chemicals and Related Products
Food and Farm Products
2010
2011
Crude Materials
Primary Manufactured Goods
All Manufactured Equipment
2012
Moffatt & Nichol | Trading Patterns: Successfully Dealing with Change 16
Millions of Short Tons
160
60
>100M short tons of cargo was moved using the Columbia River in 2012
CARGO MOVING ON COLUMBIA RIVER – EXPORTS DOMINATE AND AGRICULTURE HAS THE LARGEST SHARE
Exports
Total Domestic
6
Millions of Short Tons
60
50
2
0
2008
Food and Farm Products
Waste Material
30
2009
2010
2011
2012
Crude Materials
Petroleum and Petroleum Products
Chemicals and Related Products
Primary Manufactured Goods
Imports
20
Millions of Short Tons
6
10
0
2008
2009
Food and Farm Products
Petroleum and Petroleum Products
Source: USACE
2010
Crude Materials
Primary Manufactured Goods
2011
2012
Chemicals and Related Products
4
2
0
2008
2009
2010
2011
2012
Primary Manufactured Goods
Crude Materials
All Manufactured Equipment
Chemicals and Related Products
Petroleum and Petroleum Products
Food and Farm Products
Moffatt & Nichol | Trading Patterns: Successfully Dealing with Change 17
Millions of Short Tons
40
4
Fracking has reversed oil and natural gas trends
US oil production is over 10% of global oil consumption and headed higher. Natural gas production has increased enough to
decouple its price from oil in the US. Natural gas production is spurring production of resins and plastics and an industrial
renaissance, supporting “on-shoring”
US OIL AND NATURAL GAS PRODUCTION
120
5
4.5
100
3.5
Million Barrels per Day
80
3
60
2.5
2
40
1.5
Billion Barrels of Oil Equivalent per Day
4
1
20
0.5
0
0
1962
1966
1970
1974
1978
1982
1986
Oil (left)
1994
1998
2002
2006
2010
2014
Natural Gas (right)
18
Source: EIA, Moffatt & Nichol
1990
Pipelines from Gulf to Midwest regions move largest volumes of US Oil
Pipelines are the main form of oil shipment in the US. Midwest to/from Gulf Coast is the largest segment of flows. Most of the
benefit may come from use of oil and natural gas production as industrial feedstock, such as in plastics.
INTRA-US MOVEMENTS OF OIL BY PADD REGIONS
by Pipeline
by Tanker or Barge
100
Million Barrels
450
400
350
80
60
40
20
0
2010
250
Midwest to Gulf Coast
2011
2012
Gulf Coast to East Coast
200
East Coast to Gulf Coast
2014
Midwest to East Coast
by Rail
100
Million Barrels
150
100
50
80
60
40
20
0
0
2010
Gulf Coast to Midwest
Source: EIA
2013
2011
Midwest to Gulf Coast
2012
2013
Rocky Mountains to Midwest
2014
Midwest to Rocky Mountains
2010
2011
2012
2013
2014
Midwest to Gulf Coast
Midwest to West Coast
Rocky Mountain to Gulf Coast
Gulf Coast to Gulf Coast
Canada to Gulf Coast
Rocky Mountains to West Coast
Moffatt & Nichol | Trading Patterns: Successfully Dealing with Change 19
Million Barrels
300
Global oil production growing faster than consumption
Since 2008 global oil production has outpaced consumption, with a cumulative 30 million barrels per day inventory
surplus. Since July 2014 production has grown dramatically faster than consumption.
Production
Millions of Barrels of Crude Oil per Day
Jun-14
Jul-13
Aug-12
Sep-11
Oct-10
This probably isn’t sustainable!
Cummulative Excess Demand
20
Source: IEA, Bloomberg, Moffatt & Nichol
Consumption
Nov-09
-40
Dec-08
65
Jan-08
-30
Feb-07
70
Mar-06
-20
Apr-05
75
May-04
-10
Jun-03
80
Jul-02
0
Aug-01
85
Sep-00
10
Oct-99
90
Nov-98
20
Dec-97
95
Jan-97
30
Feb-96
100
Mar-95
Millions of Barrels of Crude Oil per Day
WORLD OIL PRODUCTION AND CONSUMPTION: 1995 - 2014
Water is the overlooked looming resource crisis
Water is becoming increasingly scarce in Asia, the Middle East and in the Western half of the US. The Americas otherwise
have abundant water and are likely to grow in importance as the world’s breadbasket.
GLOBAL DISTRIBUTION OF PHYSICAL WATER SCARCITY
Changes In The Ogallala Aquifer Water Level
21
Source: UN-FAO, US Government Agencies
Global soybean productivity trends
Productivity is higher in the Americas because of larger farm sizes, technology and inland infrastructure – particularly
storage, and water availability.
SOY HECTOGRAMS PER HECTARE TRENDS IN MAJOR PRODUCING AND CONSUMING NATIONS
35,000
30,000
USA
Brazil
25,000
Argentina
Canada
20,000
World
China
15,000
Indonesia
India
10,000
5,000
2010
2008
2006
2004
2002
2000
1998
1996
1994
1992
1990
1988
1986
1984
2012
22
Source: UN-FAO
1982
0
Asia is the dominant destination of US grain and oilseed exports
US GRAIN AND OILSEED EXPORTS (MILLION METRIC TONS) BY DESTINATION
140
120
100
Aus & Oceania
Tons (Million)
Asia - South
80
Middle East
North America
Europe
60
Africa
S. & Cent. America
40
Asia - East & Southeast
20
0
2003
2004
Asia - East & Southeast
China
S. & Cent. America
Africa
Europe
North America
Middle East
Asia - South
Aus & Oceania
Source: US Census Bureau, Moffatt & Nichol
2005
2003
52%
11%
14%
13%
9%
9%
4%
0%
0%
100%
2006
2007
2005
53%
10%
15%
14%
5%
7%
5%
0%
0%
100%
2008
2007
50%
10%
15%
14%
7%
6%
7%
1%
0%
100%
2009
2010
2009
63%
21%
13%
9%
4%
7%
4%
0%
0%
100%
2011
2011
60%
21%
11%
11%
4%
7%
6%
0%
0%
100%
2012
2013
2013
62%
34%
15%
7%
6%
7%
3%
0%
0%
100%
2014
2014
62%
30%
17%
6%
6%
6%
3%
0%
0%
100%
+/- Share
10%
19%
3%
-6%
-3%
-3%
-1%
0%
0%
East coast grain and oilseeds export destinations are more diversified
2%1%
1% 0%
New Orleans
Columbia-Snake
5%
7%
Asia - East & Southeast
S. & Cent. America
Middle East
Asia - South
Europe
WEST
COAST
2%0%
8%
25M Tons
99% Bulk;
1% Container
9%
EAST
COAST
Seattle
Asia - East & Southeast
Middle East
11M Tons
Aus & Oceania
83% Bulk;
17% Container
S. & Cent. America
Europe
Other
98%
49%
23%
Other
91%
3% 2%
Asia - East & Southeast
S. & Cent. America
North America
69M Tons
Europe
100% Bulk;
Africa
0% Container
Other
Norfolk
9%
Asia - East & Southeast
S. & Cent. America
15%
49%
Africa
Europe
North America
3M Tons
77% Bulk;
23% Container
Other
22%
NYNJ
LALB
5%
6%
Asia - East & Southeast
Middle East
S. & Cent. America
Asia - South
Europe
92%
4%
Other
4%
6%
4M Tons
24% Bulk;
76% Container
14%
55%
16%
Asia - East & Southeast
Africa
S. & Cent. America 800,000 Tons
53% Bulk;
North America
47% Container
Europe
Other
Aging inland waterway infrastructure
Soybean Transportation Coalition studied US inland waterways. Key points: 54% of the Inland Marine Transportation
System’s (IMTS) structures are more than 50 years old and 36% are more than 70 years old. Along with water issues probably,
this has impacted where grain is produced and exported. Grain increasingly moves on steel rivers (railways).
Changes In Share of Crop Production: 1997 versus 2012
Hours of Lock Outages by Year and by Type of Outage
Shares of US Grain and Oil Seed Exports
New Orleans
Columbia-Snake
Seattle, WA
Los Angeles, CA
Norfolk, VA
Other
2003
61%
14%
8%
1%
1%
15%
100%
2005
52%
16%
13%
2%
1%
16%
100%
2007
51%
16%
11%
4%
2%
17%
100%
2009
52%
15%
12%
3%
2%
15%
100%
2011
48%
18%
12%
4%
2%
17%
100%
2013
49%
20%
8%
4%
3%
16%
100%
2014
52%
19%
8%
3%
2%
14%
100%
+/Share
-8.7%
5.2%
0.2%
2.1%
1.9%
-0.6%
Brazil is becoming a more competitive supplier
Both Canada and the US can benefit from agricultural exports, if they can get products to the market, but its competitors are
gaining. Brazilian exports are likely to benefit from the Panama Canal expansion. Press reports indicate Brazil soy exports
freight costs to China could decline 34% and have a $180 per ton advantage from the Cerrado to Shanghai over Davenport to
Shanghai.
COSTS OF TRANSPORTING SOYBEANS*
Davenport to Shanghai
Sioux Falls to
Shanghai
N. Mato Grosso to
Shanghai
Truck
$13.51
$13.51
$109.73
Barge
$24.86
Rail
$55.66
$46.82
$23.88
$32.00
Total Transportation
$85.19
$93.05
$141.73
Farm Value
$565.85
$552.38
$570.66
Customer Cost
$651.04
$645.43
$712.39
*U.S. vs. Brazil. Price per metric ton in 2012 – Q3
Source: U.S. Department of Agriculture, Agronegocios
Moffatt & Nichol | Trading Patterns: Successfully Dealing with Change 26
Ocean
US manufacturing is growing but not hiring
US manufacturing output is almost 8x the level of 1950 while employment is 25% lower. This is due to the changing
nature of the commodities manufactured in the US (higher technology content) and automation. Using a minimum
of relatively expensive US labor allows capital goods to be cost competitive.
US MANUFACTURING AND EMPLOYMENT INDEXES: 1950 - 2014
800
Index Values (January 1950 = 100)
700
600
500
400
300
200
100
1950
1952
1955
1958
1960
1963
1966
1968
1971
1974
1976
1979
1982
1984
1987
1990
1992
1995
1998
2000
2003
2006
2008
2011
2014
0
Industrial Production
27
Source: IEA, Bloomberg, Moffatt & Nichol
Manufacturing Employment
Asia is the dominant destination of US capital goods exports
US CAPITAL GOODS EXPORTS (MILLION METRIC TONS) BY DESTINATION
7
6
5
Tons (Millions)
North America
4
Australia and Oceania
Africa
Europe
3
South/Central America
Asia
2
1
0
2003
Asia
of which China
South/Central America
Europe
Africa
Australia and Oceania
North America
Source: US Census Bureau, Moffatt & Nichol
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2003
35%
2004
35%
2005
33%
2006
33%
2007
33%
2008
33%
2009
35%
2010
35%
2011
34%
2012
33%
2013
36%
2014
37%
+/- Share
2%
7%
8%
7%
7%
7%
7%
8%
8%
8%
7%
7%
9%
1%
28%
23%
7%
7%
1%
100%
27%
22%
7%
8%
1%
100%
29%
22%
8%
8%
1%
100%
29%
22%
9%
7%
1%
100%
29%
24%
8%
6%
1%
100%
31%
22%
8%
6%
0%
100%
32%
18%
10%
5%
0%
100%
33%
18%
7%
6%
0%
100%
33%
20%
7%
7%
0%
100%
33%
20%
7%
7%
0%
100%
31%
19%
7%
5%
1%
100%
30%
19%
8%
5%
1%
100%
2%
-3%
1%
-2%
0%
East coast capital good export destinations are more diversified
HOUSTON, TX
2%
16%
Asia
26%
Europe
1%
LA/LB
1.4M tons
39% container
61% bulk
1%
17%
Asia
Europe
4%
4%
South/Central America
South/Central America
Australia and Oceania
1%
NY/NJ
Asia
36%
18%
Africa
74%
North America
38%
9%
Australia and Oceania
Africa
17%
Asia
Europe
Europe
South/Central America
South/Central America
Australia and Oceania
Australia and Oceania
Africa
Africa
North America
North America
650,000 tons
61% container
39% bulk
94%
NORFOLK, VA
10%
2%
Asia
37%
Europe
BALTIMORE, MD
600,000 tons
70% container
30% bulk
12%
19%
9%
Asia
Europe
South/Central America
South/Central America
Australia and Oceania
Australia and Oceania
Africa
North America
36%
North America
MIAMI AREA
770,000 tons
72% container
28% bulk
36%
15%
1M tons
80% container
20% bulk
Africa
24%
36%
North America
300,000 tons
41% container
59% bulk
Small vessels matter to trade and economic growth
Agricultural goods exported by ports in the New Orleans custom district go to destinations all over the globe. The average
monthly number of tons of dry bulk agricultural goods shipped to countries in various regions of the world are shown in the
map below. The average Caribbean country receives 17,000 tons of cereals, oilseeds and/or DDGs per month. Central
American and Caribbean countries receive shipments in a range that is best served through smaller capacity vessels that
could call at ports such as the Port of Morgan City, if the access channels are sufficiently deep.
TRIPS OF VESSELS WITH LESS THAN 13’ DRAFT –
GULF INTRACOASTAL WATERWAY
AVERAGE MONTHLY OILSEED AND GRAIN SHIPMENTS FROM THE NEW ORLEANS
CUSTOM DISTRICT BY DESTINATION COUNTRY
200
150
100
50
0
2008
0-5 ft.
2009
2010
6-9 ft.
2011
2012
10-12 ft.
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Thousands of Trips
250
Louisiana has been increasing its agriculture and energy exports
It is well known that Louisiana’s exports of coal, and increasingly, petroleum and natural gas products have grown
substantially in the last 10 years. However, it often escapes notice that Louisiana’s agricultural exports have also been
growing. USDA data, graphed right, shows that the value of Louisiana agricultural exports have grown at an average
rate of 10% between 2000 and 2013. Over the same period of time, Louisiana’s share of US agricultural exports has
increased from 1.3% to 1.8%.
VALUE OF LOUISIANA AGRICULTURAL EXPORTS
$2.5
$2.0
$ Billions
$1.5
$1.0
$0.5
$0.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Animal Products
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Source: USDA, Louisiana Department of Agriculture, Moffatt & Nichol
Plant Products
The larger picture
Port of Morgan City has developed new bulk exports and imports despite navigation channel issues. This has positively
impacted the state economy and likely the use of its infrastructure as well – larger ports can focus on larger vessels.
More support is needed to maintain the momentum.
ECONOMIC IMPACT OF PORT OF MORGAN CITY DRY BULK HANDLING
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Summary
• US has been the driver of global growth for 4 years, rest of world is following with expansionary policies
– Until the Fed raises interest rates its premature to declare the economy “recovered”
– Low inflation, wage increases and commodity prices = low pressure to raise interest rates
• Medium to long term outlook is all about the trade deficit and infrastructure
– ACE (Agriculture, Capital Goods, and Energy) sectors are the key to prosperity
– But not without more inland waterway infrastructure investment
• What happens if we don’t change our infrastructure development strategies?
– Other countries will invest and are doing so right now
– US export competitiveness in some markets will decline
Moffatt & Nichol
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Dr. Walter Kemmsies, Chief Economist
Moffatt & Nichol, New York
104 West 40th Street
New York
NY 10018
T 212.768.7454
F 212.768.7936
www.moffattnichol.com
Moffatt & Nichol | Trading Patterns: Successfully Dealing with Change
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