How the Mississippi River Delta links Midwestern farmers with mainland China

Celebration mirroring commerce: A team carrying a tiger puppet draws nearer to a group of dragon dancers at a Chinese New Year parade. The increased volume of trade flowing through Mississippi River Delta shipping facilities to the Panama Canal and the Pacific has led to closer commercial ties between Louisiana and China, links that have been strengthened by new LSU exchange programs with Chinese universities and recent trade missions between Baton Rouge and Beijing (Source: Flickr (ryskiphotos))

Gung Hay Fat Choy! As billions of people in China (and elsewhere) celebrate the start of the Lunar New Year, many will be sitting down to dinner tables stocked with wheat noodles, corn-fed beef, soy sauce, and other foods whose inputs were cultivated in the American heartland and subsequently shipped to East Asia by way of the Mississippi River Delta. In this post, we will look at U.S.-China agricultural trade through Louisiana’s ports, and discuss why wetland protection could be critical to safeguarding this commercial link between the world’s two largest economies.

From the Corn Belt to Chongqing, via Chalmette

Scarred by a history of famine and ideological isolation, China’s Communist leaders spent much of the late 20^th century pursuing agricultural self-sufficiency, encouraging domestic farming with subsidies and quotas while also maintaining extensive oversight of the nation’s grain purchases on international markets. However, all this changed in 2001, when the People’s Republic of China joined the World Trade Organization (WTO).

As a condition of membership, China adopted market reforms that included substantially lowering tariffs on agricultural imports. In the years that followed, Chinese consumption of foreign corn, wheat, and soybeans, much of it grown in the Midwestern and Mountain West regions of the United States, soared. Though many of these shipments were transported by rail to West Coast ports like Seattle, the lion’s share of these staples were shipped down the Mississippi River Valley to Louisiana ports like New Orleans, where they were then warehoused and transported to vessels for shipment to Asia.

Grain-fed growth: In the six years after China joined the WTO, its imports from the United States via Louisiana grew in real terms by 232%, jumping from $827.4 million in 2001 to $2,745.1 million in 2007 (figures in 2009 $USD). Despite the global downturn in ’07-‘08, continued Chinese demand for American grain and animal feed caused Louisiana exports to the world’s largest country to rise even higher during the Great Recession. In 2009, the value of agricultural crop shipments from New Orleans and other Bayou State ports to the People’s Republic of China (~$4.3 billion, equivalent to 79.6% of Louisiana’s shipments to China) outstripped the total value of all shipments (agricultural and non-agricultural) from Louisiana to the Eurozone (~$3.4 billion) (Sources: Bureau of Labor Statistics; The U.S.-China Business Council; U.S. Commerce Department)

The shipping infrastructure of southern Louisiana – grain elevators, intermodal facilities, canals, docking stations – has allowed America’s farmers upriver to efficiently and inexpensively transport their goods to China, keeping our country’s agricultural firms cost-competitive with growers in places like Brazil and Argentina. But the navigation hub that is coastal Louisiana would not be possible without the protection afforded it by the wetlands of the Mississippi River Delta. When disasters like tropical storms strike the Gulf Coast, particularly during the autumn harvest months when Atlantic hurricane activity peaks, the region’s ports rebound quickly because of the buffering action of coastal marshland and swamps. These natural areas attenuate wave action and reduce the risk of flooding, channel silting, and facility destruction.

Natural protection for navigation infrastructure

Yet every day, almost twenty-four acres of these protective wetlands wash away, increasing the risk of future storm disruptions and catastrophic navigational infrastructure losses in coastal Louisiana. The replacement value for these facilities would likely run into the billions of dollars, and the impact on our commerce with the Far East could be substantial. While floodwalls shield some areas from potential disaster, comprehensive protection for this vast transportation complex is contingent on a multiple lines of defense strategy that includes wetland protection.

For that reason, it would be wise for administration officials and domestic trade strategists to recognize that Louisiana wetland restoration and its contingent effects on navigation infrastructure protection could play a role in ensuring our expansion of trans-Pacific trade. Targeted action to restore the Mississippi River Delta would protect important regional ports and help our nation’s exporters maintain their burgeoning trade ties with China in the years to come.

Related Links

Free trade and a functioning Mississippi River Delta [Restoration and Resilience]

Soybean production costs and export competitiveness in the United States, Brazil, and Argentina [U.S. Department of Agriculture]

The Delta and America’s economy [Restore the Mississippi River Delta]

Washington Insider – Gulf coast restoration [The Maritime Executive]