The Impact of the Panama Canal Expansion on U.S. Soybean Exports

Abstract

The objective of this study was to evaluate the impact of the Panama Canal Expansion on the flow of soybeans from producing regions in the U.S. to its ports for export. Specific objectives of this study were to determine the toll rate at which the Panama Canal Authority will maximize their toll revenues for soybeans transiting the canal, and to analyze the impact of the canal expansion on soybean shipments from U.S. producing regions to ports for export. To conduct this study a spatial optimization model was developed. The model minimizes all transportation costs associated with the transportation of soybeans. Major findings were that the expansion of the Panama Canal will increase shipments out of the Gulf through the canal, and reduce the overall costs of shipping by 5 percent. Domestic transportation proved to be somewhat insensitive to changes in the toll rate.