Long before he joined Minnesota Soybean in 2013, Joe Smentek apprenticed as a legal intern at the Minnesota Department of Agriculture. During his three years at MDA, Smentek helped conduct a feasibility study on moving grain via the Port of Duluth and the massive Great Lakes-St. Lawrence Seaway System.

“That was the first question when I started here: ‘What are we doing with the Port of Duluth?’” recalled Smentek, executive director of the Minnesota Soybean Growers Association. “I know now that we’ve been hammering on it.”

After nearly a decade of Minnesota Soybean checkoff investments, relationship building and MSGA advocacy efforts, it appears soybean producers eventually could have another viable option to ship their commodities and diversify the agriculture supply chain. This follows the Hansen-Mueller Company’s recent acquisition of General Mills’ Duluth Elevator A, a deal that brings a much-heralded return of the grain-handling facility.

“It’s very cool stuff,” Smentek said. “We’re excited to see the progress.”

The facility can store 3.5 million bushels of grain and stands 195 feet above the bar. The site also supports a nearly 2,000-foot dock and on-dock rail service from BNSF Railway. The facility is expected to export small grains, plus soybeans and meal, from the United States and Canada to both domestic and international destination.

“The Port of Duluth has had a storied past of decades of prosperity, but also of less usage recently,” said Minnesota Soybean Research & Promotion Council CEO Tom Slunecka. ”Things are shifting, and it’s coming back around to where its value is again important.” Kate Ferguson, director of trade and business development with the Duluth Seaway Port Authority, said despite valiant efforts by the Council and MSGA, commodity trade via the Port of Duluth has proven difficult primarily because most of the facilities are held by private entities. The Jones Act, legislation enacted in 1920 that requires shipping vessels are flagged in the U.S. if they travel from one U.S. port to another, has also hampered efforts to move more grain through Duluth.

“Minnesota Soybean has always wanted to have a public facility to use to ship their beans,” Ferguson said. “We’re not seeing a lot of soy being shipped, but we have seen a development in the last six months that might allow soy to move through, and soy can always move via container transportation.”

Though the port, which is open nearly 300 days annually, still ships about a million tons of grain annually – wheat is typically the top exported commodity – iron ore is king at the Port of Duluth-Superior, which first opened for commercial shipping more than 150 years ago. The Port is the continent’s furthest inland seaport and the highest-ranking port on the Great Lakes. Shippers are attracted to ship via Duluth because traffic is uncongested; traffic on the Seaway could double and ships and barges would still flow freely. Additionally, low water levels on the Mississippi River, along with supply chain snarls on the West Coast, are making the Great Lakes system increasingly more appealing to shippers.

“The great thing about the Great Lakes is we can offer a diversified supply chain for many of these shippers utilizing the coast,” Ferguson said. “So many companies want to diversify their risks, and we know the Great Lakes can be a reliable chain.”

In October, Minnesota Soybean Director of Market Development Kim Nill met with officials from the United Kingdom, the Port Authority and Minnesota Department of Agriculture to discuss ways the Great Lakes System could increase soy shipments to markets including the U.K., Europe, North Africa and Uzbekistan, among others. Smentek is following up on these efforts during a trade mission to Spain and North Africa in late 2022.

“The size of ships gives Duluth its niche,” Nill said. “Not all ports can handle the large ships coming out of the Pacific Northwest (PNW) or out of the Gulf of Mexico. … It was nice to be able to have our foot in the door to discuss the benefits of shipping more soybeans out of the Port of Duluth.”

Reaching those overseas customers via the St. Lawrence Seaway would hit a “sweet spot,” said Mike Steenhoek, executive director of the Soy Transportation Coalition. “There’s a real opportunity for seeing soymeal exported via the Great Lakes-St. Lawrence Seaway,” he said. “That’s something that’s really exciting to me.”

Ferguson said she’s looking forward to working with commodity groups and shippers to expand transportation options and improve the region’s economy. “I hope we can continue to support Minnesota Soybean,” she said. “We’re all trying to support our region, support ag in helping our region get products to market.”

Growing markets

The St. Lawrence Seaway, the “Opportunity Belt” that traverses 2,300 miles from the head of the Great Lakes in Duluth to the Atlantic Ocean, currently accounts for only about 2% of U.S. soybean exports.

“It’s the transportation conduit between the rest of the world and the Great Lakes and the Upper Midwest,” said outgoing St. Lawrence Seaway Deputy Administrator Craig Middlebrook, who spoke with Soybean Business days before his retirement after nearly 30 years with the organization.

“The reliability of the infrastructure is one of our strongest selling points.”

Industry leaders hope the Gateway Incentive program, an agreement spearheaded by the Soy Transportation Coalition that offers a 50% discount on soybean imports to encourage more agricultural shippers to use the route, will stimulate more traffic. The incentive program has been extended into 2023.

“As export customers continue to look to our soybeans for qualities they value, like sustainability, the St. Lawrence Seaway represents a great opportunity for soybean farmers,” Council Director Gene Stoel said.

Stoel, a Lake Wilson farmer, has experience working in the grain elevator business and appreciated the need for optimization.

“We used to transport a lot of soybeans on the St. Lawrence Seaway and ship them,” he said.

During a recent Hill Visit to Washington, D.C, directors from the Minnesota Soybean Growers Association met with Peter Hirthe, international trade specialist at the Great Lakes-St. Lawrence Seaway Development Corporation, to discuss opportunities for increased grain shipments via the Great Lakes.

“It was exciting to see the opportunities the St. Lawrence Seaway could have, especially to expand our sales of commercial soybeans and specialty soybeans that will be processed at the Ag Innovation Campus to new customers and new countries,” said MSGA Director and former President Mike Skaug, who also chairs the AIC.

Through September 2022, the Seaway System had moved 689,000 metric tons of U.S. grain, a 41.24% increase compared to the same period in 2021. Although the Great Lakes system is unlikely to ever supplant shipments out of the PNW or Gulf  of Mexico, Steenhoek said the industry should take notice of the ongoing drought and heed the “golden rule” of commodity transportation.

“Don’t put all your eggs in one basket,” he said. “One thing we try to do as an organization is try to diversify that supply chain, and the St. Lawrence Seaway System is one of those opportunities that we think should be widely utilized.”

With lessons learned from the pandemic, promoting – and investing in – the Great Lakes-St. Lawrence Seaway System will be an ongoing Minnesota Soybean priority in the years ahead.

“The specialty grains and Identity Preserved markets are growing, and we’re developing new markets,” Slunecka said. “All of these things are helping to make the Great Lakes a very viable option for our products.”