Transcript Document

A Brief History
• 1818: Founded in Amsterdam by Johann Peter
Bunge
• 1884: Bunge y Born established in Argentina
by grandson, Ernest Bunge
• 1905: Bunge y Born expanded into Brazil
• 1923: Bunge North American Grain
Corporation founded in New York City to trade
raw agricultural commodities
• 2001: Changed our name to Bunge North
America prior to the initial public offering of our
parent company, Bunge Limited
• 2002: Bunge Limited acquired Cereol, which
included Central Soya in the United States and
CanAmera Foods in Canada
Corporate Organization
• Bunge Limited
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Traded on NYSE: BG (IPO: 8/2/2001)
Global Headquarters: White Plains, NY
22,000 employees
Offices in 32 countries
2005 Net Sales: $24 Billion
Vertically Integrated
Fertilizer
Nutrients
Agribusiness
Retail
Products &
Services
Grain
Origination
Food Products
Oilseed
Processing
Distribution
Food
Processing
Retail and
Consumer
• World’s leading oilseed processor and seller of bottled oils
• Leading miller of wheat in South America and corn in
North America
• South America’s leading fertilizer producer
Bunge North America
Grain
Oils
Oilseed Processing
Milling
Bunge North America,
Inc., is the North
American operating
arm of Bunge Limited
(NYSE: BG),with
facilities in the U.S.,
Canada and Mexico.
Bunge North America
Waterways & the U.S. Economy
• One in every four acres of U.S. ag production is exported
– worth over $60 billion a year.
• In 2005, the U.S. exported over 111 million metric tons of
grain and oilseed products valued at over $20 billion.
• Close to 60 percent of that moves through New Orleans
to the Gulf.
• Our best natural comparative advantage in ag trade –
the Mississippi River and its tributaries!
Waterways & the U.S. Economy
• The New Orleans Customs District handled $32.4 billion
of U.S. exports and $97.3 billion in imports in 2005.
• The largest agricultural exports by value passing through
these ports were:
– $3.3 billion of soybeans (52 percent of total soybean
exports)
– $2.8 billion of corn (58 percent of total corn exports)
– $784 million of wheat (18 percent of total wheat exports)
Factors Impacting Barge Freight
• Strong demand for both traditional southbound and
increased northbound barge traffic
– 2003 to 2004: inbound tonnage through New Orleans
increased by more than 42 percent.
– 2004 to 2005: increased by more than 23 percent.
– New demand for northbound movements to interior locations
lengthens turn-around times and barge availability for
southbound movements of agricultural commodities.
– Significant increases in major commodity imports such as
crude petroleum and petroleum products; chemicals; sand,
gravel and stone; primary manufacturing goods and
manufacturing equipment.
Factors Impacting Barge Freight
• Reduction in the number of barges in the river fleet
– 2005 covered hopper barge fleet at 11,300 barges.
– 2 percent less than the number of barges available in 2004;
8.9 percent less than 1998.
• Low water levels
– Naturally occurring
– Lack of routine, federal maintenance
Factors Impacting Barge Freight
• Rail & truck transportation often not viable.
– Rail shipping is already at full capacity.
– Labor shortage of certified truck drivers.
Shipping by barge remains the lowest cost
and most overall efficient method of
transporting agricultural commodities to
export!
Global Competitiveness
• Value of public infrastructure investments
– Foresight of previous generations paying dividends today
• Federal government’s role
– Multi-state implications
– Legal liability for private investors
– Absolute neutrality benefits all sectors
Global Competitiveness
• Freight cost advantage of our waterways system
– Many international competitors maintain an overall lower cost
of production in commodities such as corn and soybeans.
The U.S. makes up the difference through efficient handling
and shipping.
– Deterioration of our river system and investments in foreign
transportation infrastructure has diminished the U.S. freight
advantage over global competitors such as Brazil.
– Investments in public infrastructure are key to maintaining
U.S. competitiveness.
– We must renew our commitment to maintaining the entire
waterways system.
Origination & Destination - “Low-Use” Waterways
• Tributary waterways are a vital transportation system
linking agricultural production to the Mississippi River
system and export markets beyond.
• 65 percent of commerce moving on the Mississippi River
stems from tributary waterways.
• Fewer miles = fewer ton-miles
• Tributaries are part of a waterways system.
– Nearly 99% of tributary ton-miles derived from traffic moving
to or from an origin or destination on another waterway.
– Without access to terminals on that tributary waterway, the
entire movement and total ton-miles would not occur.
The Funding Crisis
• Tributaries and other “low-use” waterways have been
targeted for budget savings over the years.
– The President’s FY ‘04, ‘05, ‘06 & ’07 Budgets completely eliminate
funds for Mississippi River tributaries & ports – setting a 1 million
ton/1 billion ton-mile threshold.
• Consequently, the bases of these channels are rising and
their navigability is at risk.
Impact on Agriculture
• Aging infrastructure and deferred maintenance created by
insufficient investment levels will result in
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degraded system performance
safety concerns
increased delays
higher transportation costs
negative impacts on GDP and employment
Impact on Agriculture
• Inability to load barges to full capacity because shallow
depths limit navigation.
• Direct correspondence to commodity “basis” deterioration
– Loss of barge freight = 10¢ to 25¢ per bushel lost revenue
500 acres of corn planted = avg trendline yield of 150 bushels/acre
150 bushels/acre = 75,000 bushels of corn
Loss of barge transportation = $7,500 to $18,750 lost revenue
The Road Ahead
• Integrate tributaries & shallow ports into larger campaign to
maintain the system.
• National Association of Manufacturers (NAM) Coalition
• Waterways inclusion in intermodal transportation system
• Bridge gap between authorization commitments and
appropriations
– WRDA final action
– Operations & Maintenance appropriations