Transportation costs for soybean exports from the United States and Brazil showed mixed trends in the fourth quarter of 2024, influencing the overall landed costs and competitiveness in key markets like China and Europe.
According to the latest USDA Grain Transportation Report, U.S. soybean transportation costs to China via the Gulf route increased from Minneapolis, Minnesota, but decreased from Davenport, Iowa, compared to the previous quarter. The rise in costs from Minneapolis was attributed to higher truck and barge rates, driven by strong export sales and navigation restrictions on the Mississippi River System due to low water levels.
For shipments through the Pacific Northwest (PNW), transportation costs to China declined from both Fargo, North Dakota, and Sioux Falls, South Dakota, primarily due to lower rail and ocean freight rates. The decrease in ocean freight rates was linked to reduced demand for bulk shipping and the gradual lifting of transit restrictions at the Panama Canal.
Brazil experienced a decline in transportation costs to both China and Europe, benefiting from lower truck and ocean freight rates.
Year-over-year comparisons showed varied results, with U.S. Gulf route costs to China increasing from Minneapolis but decreasing from Davenport. PNW route costs to China fell from both origin points. Brazil's transportation costs decreased across the board compared to the previous year.
Landed costs, which include both transportation costs and farm values, generally decreased for both U.S. and Brazilian shipments, with a few exceptions. The share of transportation costs in total landed costs ranged from 23-24% for U.S. shipments to China and 18-20% to Europe. For Brazil, these percentages were 18-21% to China and 17-21% to Europe.
U.S. soybean exports to China surged in the fourth quarter of 2024, reaching 15.97 million metric tons, a significant increase from the previous quarter and up 17% from the same period in 2023. The USDA projects total U.S. soybean exports for the 2024/25 marketing year at 49.67 million metric tons, while Brazil is expected to export 105.50 million metric tons.
