2A Brief History 1818: Founded in Amsterdam by Johann Peter Bunge 1884: Bunge y Born established in Argentina by grandson, Ernest Bunge1905: Bunge y Born expanded into Brazil1923: Bunge North American Grain Corporation founded in New York City to trade raw agricultural commodities2001: Changed our name to Bunge North America prior to the initial public offering of our parent company, Bunge Limited2002: Bunge Limited acquired Cereol, which included Central Soya in the United States and CanAmera Foods in Canada
3Corporate Organization Bunge LimitedTraded on NYSE: BG (IPO: 8/2/2001)Global Headquarters: White Plains, NY22,000 employeesOffices in 32 countries2005 Net Sales: $24 Billion
4Vertically Integrated World’s leading oilseed processor and seller of bottled oilsLeading miller of wheat in South America and corn in North AmericaSouth America’s leading fertilizer producer
5Bunge North AmericaBunge North America, Inc., is the North American operating arm of Bunge Limited (NYSE: BG),with facilities in the U.S., Canada and Mexico.
7Waterways & 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!
8Waterways & 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)
9Factors Impacting Barge Freight Strong demand for both traditional southbound and increased northbound barge traffic2003 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.
10Factors Impacting Barge Freight Reduction in the number of barges in the river fleet2005 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 levelsNaturally occurringLack of routine, federal maintenance
11Factors 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!
12Global Competitiveness Value of public infrastructure investmentsForesight of previous generations paying dividends todayFederal government’s roleMulti-state implicationsLegal liability for private investorsAbsolute neutrality benefits all sectors
13Global Competitiveness Freight cost advantage of our waterways systemMany 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.
14Origination & 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-milesTributaries 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.
15The Funding CrisisTributaries 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.
16Impact on AgricultureAging infrastructure and deferred maintenance created by insufficient investment levels will result indegraded system performancesafety concernsincreased delayshigher transportation costsnegative impacts on GDP and employment
17Impact on AgricultureInability to load barges to full capacity because shallow depths limit navigation.Direct correspondence to commodity “basis” deteriorationLoss of barge freight = 10¢ to 25¢ per bushel lost revenue500 acres of corn planted = avg trendline yield of 150 bushels/acre150 bushels/acre = 75,000 bushels of cornLoss of barge transportation = $7,500 to $18,750 lost revenue
18The Road AheadIntegrate tributaries & shallow ports into larger campaign to maintain the system.National Association of Manufacturers (NAM) CoalitionWaterways inclusion in intermodal transportation systemBridge gap between authorization commitments and appropriationsWRDA final actionOperations & Maintenance appropriations