thumbnail

For six or seven seconds Monday afternoon, a group of wheat farmers from Idaho were able to imagine pushing 15,000 metric tons of wheat up the river. Maybe the wheat had been harvested in Idaho, or maybe it came from Washington or Oregon or Montana or even the Dakotas. Regardless, the imaginary barges under their control – the tugboat they each got to pilot was real, the barges not so much – were filled with U.S. wheat destined to be loaded on a ship headed for an export market.

The tugboat “driving lesson” was part of the Wheat Export and Marketing Workshop, an annual educational seminar and tour sponsored by the Idaho Wheat Commission and anchored at the Wheat Marketing Center in Portland, Oregon.

Here’s a brief video from the first day of the 3-day workshop:

 

thumbnail

A coalition of U.S. farm and food industry groups recently expressed support for a bipartisan Congressional agreement that, in part, maintains navigational access to the Lower Snake River Dams.

The Agricultural Transportation Working Group noted that the Water Resources Development Act* (WRDA) of 2022 helps protect U.S. agriculture’s dependence on comprehensive transportation system including inland waterways and ports.

U.S. Wheat Associates (USW) and the National Association of Wheat Growers (NAWG) join the working group in its strong support for the sustainability and reliability of wheat transportation by barge.

Barges Move U.S. Wheat and Other Grains

The “WRDA can impact trade because barges move about half of all grains to export elevators …,” the ATWG said in a letter to Congressional committee leadership that negotiated the 2022 WRDA. “Critical farm inputs … are transported via the inland waterways system. From the Pacific Northwest to the Mississippi River and the Gulf Coast, the importance of inland waterways and ports to the ATWG and American agriculture is definitive.”

Grain barge navigation on the Columbia Snake River System is an essential part of a logistical web that moves over half of all U.S. wheat exports to more than 20 Pacific Rim countries including some of the largest U.S. wheat buyers in the world. The Snake River moves more than 10% of all wheat that is exported from the United States. U.S. Wheat Associates (USW) and its state wheat commission members strongly support the sustainability and reliability of wheat transportation by barge.

Map of the Columbia Snake River System from Pacific Northwest Waterways Association

Eight Steps Down. Lock and dam systems on the Columbia Snake River System allow barges to efficiently and safely navigate the 222-meter elevation change from Lewiston, Idaho, to export elevators as far west as Longview, Wash. Illustration from the Pacific Northwest Waterways Association.

Protect Most Fuel-Efficient Shipping

The working group also noted that the removal of barge access through the Lower Snake River dams would require 39,000 rail cars or 152,000 semi-trucks to replace the cargo volume shipped on the Snake River in 2019, according to the Pacific Northwest Waterways Association. The group added that barging is the most fuel-efficient way to ship goods and failure to maintain access to this system would dramatically increase carbon emissions.

The Columbia Snake River System and other major U.S. river systems truly connect the United States to its trading partners. The river system keeps U.S. wheat competitive by moving higher volumes more efficiently. USW, its state wheat commission members, wheat associations and supply chain stakeholders in the tri-state region of IdahoOregon and Washington all support the Columbia Snake River System and will work to see that it continues working for wheat buyers around the world.

*The Water Resources Development Act is biennial legislation that authorizes flood control, navigation, and ecosystem restoration projects for the U.S. Army Corps of Engineers. The final version comes after months of negotiations to reconcile Senate- and House-passed versions of the legislation.

thumbnail

It was an unusually calm morning at Blown Away Ranch outside Ione, Oregon. Dozens of wind turbines surrounding Deacon and Erin Heideman’s farm operation were still as we pulled up to their tidy, welcoming homestead. A mastiff dog named Duke greeted us first. He was as big as a calf, but quickly let us know we were welcome.

I was travelling in the Pacific Northwest (PNW) with two Korean journalists doing research for an article on how U.S. wheat is developed, grown and transported to flour mills, bakeries and consumers in South Korea. U.S. Wheat Associates (USW) and the wheat commissions in Washington, Idaho and Oregon welcomed the opportunity to show these reporters the wholesome, reliable nature of our export supply system.

South Korean flour millers have imported U.S. wheat for more than 50 years. Over the past 10 years, the average import volume is almost 1.3 million metric tons (MMT) per year including soft white (SW) and Western White, hard red spring (HRS), and hard red winter (HRW).

In Washington’s Palouse Country

I met Mr. Changsup Song and Mr. Haewook Kim on a Monday afternoon at the Washington Grain Commission (WGC) office in Spokane, Wash. They had spent the morning learning about the Washington wheat industry with WGC CEO Glen Squires and Vice President Mary Palmer Sullivan. They also saw how up-country elevators like High Line Grain Growers near Cheney, Wash., load train cars with SW wheat bound for river terminals and export elevators.

Wheat and fallow fields in eastern Washington's Palouse Country seen from the peak of Steptoe Butte

Eastern Washington’s Palouse Country (here from atop Steptoe Butte near Colfax, Wash., in October 2022) boasts one of the world’s most ideal places to grow wheat.

On the drive from Spokane to Pullman, Wash., we braved the tight curves on the drive up Steptoe Butte to take in the panoramic view of Washington’s iconic Palouse Country. Here and there we could see the dust from a few farmers still planting winter SW in mid-October. Away from irrigated land around rivers, dry land farmers in the region plant into fields that have lain fallow for a full year to increase available moisture and improve organic matter in the soil.

On the Washington State University (WSU) campus in Pullman, the journalists saw how WGC invests money from wheat farm families in new variety research and development. At the recently expanded breeding lab, Dr. Aaron Carter, Professor, O.A. Vogel Endowed Chair in Winter Wheat Breeding and Genetics, WSU, and Dr. Kim Garland-Campbell, Research Geneticist, USDA-ARS, explained how their work serves both farmers and end-users. Field testing proves the yield potential of each new line. The functional quality of flour from the varieties is first tested in cooperation with the USDA’s Agricultural Research Service Western Wheat Quality Laboratory on the WSU campus where Research Biologist Dr. Alecia Kiszonas hosted our tour.

Conventional Cross-Breeding is the mainstay of work done by Washington State University and the USDA-ARS. USDA geneticist Dr. Kim Garland-Campbell showed Korean journalist Haewook Kim (above) research on new Club wheat varieties. Breeding efforts focus on developing cultivars with high yield potential, excellent end-use quality, and resistance to biotic and abiotic stress.

How the Wheat is Moved

Our little team moved on to Lewiston, Idaho, where Song and Kim interviewed Genesee wheat farmer and Idaho Wheat Commissioner Joe Anderson. Their questions focused on the varieties Anderson plants and about the risk management tools available to PNW farmers. A stop at the Lewis and Clark Terminal showed how farmers deliver truckloads of grain that is segregated by protein level, stored and then loaded onto barges for the journey down the Snake River to the Columbia River and export elevators in the Portland, Ore., area. The Port of Lewiston is the most inland port on the U.S. west coast.

Korean journalist Changsup Song photographs soft white wheat being unloaded from a trailer at the Lewis and Clark Terminal in Lewiston, Idaho.

Korean Journalist Changsup Song photographs soft white wheat being unloaded from a pup trailer at the Lewis and Clark Terminal in Lewiston, Idaho.

Our long drive from Lewiston, through Washington State’s Tri-Cities, to Portland featured the truly unique vistas along the Columbia River and the wheat country of northern Oregon.

Korean journalist Kim in front of the Heideman family's wheat seeding rig

Ready to Ride. Journalist Haewook Kim rode with Deacon Heideman as he planted soft white wheat at Blown Away Ranch.

Our visit with the Heideman family gave Song and Kim additional insight into dry-land wheat farming, while enjoying fresh, homemade cake baked with flour from the family’s operation. The chance to ride and talk with Deacon Heideman as he planted soft white wheat was a highlight for the journalists. The photo at the top of this page is from the ranch’s website.

We are a family farm raising wheat for a global market, working diligently to be sustainable. Our desire is to share our slice of heaven with others while maintaining our farming heritage so that we can pass it to the next generation in a better state.” – The Heideman Family, Blown Away Ranch, Ione, Oregon

Outside of Grass Valley, Ore., USW Past Chairman Darren Padget discussed how PNW farmers help ensure they produce the best quality wheat possible by publishing a Preferred Variety List based on yield potential and functional quality. His family had completed harvest and winter wheat planting by the time our team arrived, but Darren was able to show Song and Kim the operation’s seeding, application and harvesting equipment.

Assuring Quality and Supply

In Portland, Ore., after a briefing with the USW West Coast Office team and the Oregon Wheat Commission, the journalists visited the Wheat Marketing Center, offering an impressive look at how farmers invest a part of their own incomes into demonstrating the diversity and quality of U.S. wheat to domestic and overseas customers.

At the regional USDA Federal Grain Inspection Service (FGIS) office, experienced inspector Jimmy Pan offered a complete demonstration of how the agency independently inspects wheat at vessel loading to certify that the quality of the wheat loaded matches the quality stated in the customer’s import contract.

FGIS inspector Jimmy Pan demonstrates the wheat inspection process to Korean journalists.

Standardized Wheat Inspection. At the FGIS regional office in Portland, inspector Jimmy Pan demonstrated to journalists Kim and Song the process inspectors must follow to certify that wheat bound for overseas customers is the same as what the customers asked for.

Even as the world’s wheat buyers face a lot of uncertainty in today’s market, USW, the farmers we represent and our state wheat commission members were happy to open up our system, processes and quality to these Korean journalists. We believe that transparency contributes to world food security and economic stability.

We also believe Mr. Song and Mr. Kim left the United States with assurance that the U.S. industry will remain an open, dependable supplier of the highest quality wheat in the years ahead.

USW thanks every organization that helped make arrangements for this important team event.

A Korean journalist photographs a wheat export elevator and loading ship on the Willamette River in Portland, Oregon.

Loading SW Wheat. Through the foggy conditions, Korean journalist Changsup Song photographs a vessel being loaded across the Willamette River at the TEMCO LLC export elevator in Portland.

By USW Vice President of Communications Steve Mercer.

thumbnail

A dramatic increase in demand for oilseeds could impact U.S. wheat production in coming years, with significantly more acres expected to be planted in soybeans destined for new and expanded crushing facilities.

Between 20 million and 25 million additional acres of soybeans will be needed to meet requirements of the renewable diesel industry, some analysts are predicting.

At the same time, global demand for wheat is also expected to rise, setting up dynamic competition for acreage in states where both crops are grown. For the U.S. wheat industry, the situation creates important questions: How much wheat acreage could potentially be lost to soybeans? Will lost acres impact the U.S.’ standing as the world’s most dependable wheat supplier? Can wheat and soybeans co-exist in a competitive environment?

This chart shows acreage planted in soybeans and wheat in 2022 in the country's top 10 soybean states, according to USDA's National Agricultural Statistics Service.

This chart shows total acreage planted in soybeans and total acreage planted in wheat in the country’s top 10 soybean states in 2022, according to USDA’s National Agricultural Statistics Service (NASS).

Where possible, farmers may adapt and double-crop more wheat and soybeans to maintain supplies of both crops. It is already a common practice in top soybean states like Illinois, Indiana and Ohio, where soft red winter wheat is the dominant class. But in soybean states that produce hard red winter and hard red spring wheat – Kansas, Nebraska, South Dakota and North Dakota, for example – allotting acreage is more complicated due to average rainfall and shorter growing seasons.

The ultimate question is if U.S. farmers will be able to meet the demand for both wheat and soybeans by doing what they have always done – figure out a way to do more with less.

Many Options, Limited Acres

Mike Krueger, a grain industry consultant with Lida Communications, put a spotlight on the emerging “competition for acreage” during last month’s U.S. Wheat Associates World Staff Conference.

While describing volatility in global wheat and grain markets due uncertain market conditions, Krueger noted a more predictable factor that will affect markets and decisions made by U.S farmers.

“Renewable diesel is projected to increase eight-fold by 2030 and significant investments of more than $2 billion are being put into new and expanded soybean processing plants in the U.S. right now,” Krueger explained. “The U.S. soybean crush will expand by 10%, or more. We are talking vast numbers, and while sunflower and canola should be big beneficiaries of renewable diesel, soybeans are certainly going to be in even higher demand.”

A boost of 20 million acres would catapult soybean and go a long way toward meeting the projected oilseeds demand.

But at what cost?

The U.S. has consistently ranked as one of the top five wheat producing countries in the world and one of the top three wheat exporting countries. Would a major shift in acreage affect U.S. production, thus its place as a supplier?

“We must remember there’s also a global demand for wheat, as well as corn, and we have to consider ongoing drought and weather patterns, not to mention political conflicts that are impacting grain production and supplies all over the world,” Krueger said. “All of this, all the things going on that affect global trade, will put major emphasis on overall crop production in the U.S. and the entire Northern Hemisphere. To be honest, no crop can afford to give up or lose acres.”

Can Double-cropping Help?

Higher prices caused by global demand for wheat and soybeans appears to be motivating more farmers in the Midwest to consider seeding soft red winter wheat in the fall and soybeans in the same field following wheat harvest.

About 40% of producers responding to a Purdue University Ag Economy Barometer survey in June indicated they have utilized a wheat and soybean double-crop rotation in the past. About 28% of those producers planned to increase the amount of cropland devoted to this rotation by seeding more wheat this fall followed by soybean plantings on the same acres in spring 2023.

Some analysts have predicted that renewable diesel demand in coming years will require the planting of at least 20 million additional acres of soybeans. This chart from USDA shows soybean acreage over the past decade.

Some analysts have predicted that renewable diesel demand in coming years will require the planting of at least 20 million additional acres of soybeans. This chart from USDA shows soybean acreage and harvest over the past decade.

Ultimately, the biggest factor behind whether farmers begin growing an extra crop of wheat is what price they can get for the crop.

“The shift toward increasing soft red winter wheat acreage is likely the result of the expected profitability improvement of the wheat and double-crop soybean rotation,” James Mintert and Michael Langemeier, authors of the Purdue survey, noted.

A move by the federal government earlier this year to increase the number of counties eligible for double-cropping insurance was a move aimed at boosting U.S. production of wheat and soybeans by reducing the risk for farmers who decide to take the double-crop route.

Producers are well-aware that there are drawbacks to double-cropping wheat and soybeans.

“Compared to single-crop soybeans, double-crop soybeans have a shorter growing season due to the delay in planting until the wheat is harvested, which often result in reduced yields,” said Scott Gerlt, Chief Economist for the American Soybean Association (ASA). “Despite this drawback, double-cropping does allow increased production.”

Wheat Demand to Grow

Despite questions about acreage and production, U.S. wheat continues to be in demand by international customers because of its consistent quality and reliability.

Krueger expects the demand will continue to expand.

“A primary reason is that global wheat supplies are likely to shrink due to a renewed focus on soybeans, and to a lesser extent, corn,” Krueger said. “Another factor favoring U.S. producers involves shipping and logistics limitations that hamper competing wheat-growing countries, including Russia and Ukraine.”

Effects from a third consecutive La Nina would further pressure global supplies.

“These things will undoubtedly lead to more export demand for wheat,” Krueger said. “Can the U.S. meet the demand? That is the puzzle that’s still being put together. Farmers make decisions every single planting season. They only have so many acres to work with.”

 

 

thumbnail

As an export market development organization, U.S. Wheat Associates (USW) represents the interests of U.S. wheat farmers in overseas markets. We are happy to compete fairly with wheat farmers in other countries on the basis of functional quality and value. Yet, working for these hard-working farm families also gives us great empathy for wheat farmers everywhere.

As the U.S. winter wheat harvest rapidly progresses, our thoughts include Ukrainian farmers as they try to harvest their wheat amid the unimaginable challenges of an armed invasion of their lands. There is growing evidence that Russian forces are deliberately targeting ripe winter wheat fields. The Washington Post also reported that in recent fighting in the east devastated a large flour mill and grain elevator.

Failed Strategy

Targeting wheat fields and other agricultural infrastructure is also an attempt to demoralize the Ukrainian people, but that will be a failed strategy.

CNN and its reporter Ivan Watson recently showed why frontline Ukrainian wheat farmers vow never to give up.

“Military drone footage exclusively obtained by CNN shows Russian artillery pounding wheat fields, burning the summer harvest charcoal black,” Watson reported, as wheat farmers race to protect their crops. “Despite the threats, these brave farmers still bring in their harvest only to face another obstacle. [They cannot] sell wheat because the Russian military has blockaded Ukraine’s ports, so there is no way for this to be sold except at an enormous loss.”

German media company Deutsche Welle (DW) recently reported that Ukraine’s infrastructure minister accused Russia of “terrorism,” saying Moscow is “holding people all over the world hostage” by blocking the country’s grain exports. Putin wants to force the international community “to take off some of the sanctions and then the grain can get out,” he said.

A Ukrainian wheat farmer talks to CNN reporter Ivan Watson

Never Give Up. In spite of Russian strikes on his wheat fields, this Ukrainian farmer told CNN his country, its soldiers and the world need his crops. CNN Image.

Why We Keep Working

As a combine operates in the background, CNN’s Watson asked a Ukrainian wheat farmer to explain why he continues his work.

“Our soldiers are fighting and dying to get rid of these occupiers,” the wheat farmer said. “We need to feed our country, these soldiers, and help the whole world with our food. That is why we will keep working.”

The world is fortunate to have wheat farmers like this man and other Ukrainian farmers willing to do everything it takes to help feed us all.

thumbnail

On behalf of the U.S. Wheat Associates (USW) Transportation Working Group, we* appreciate the opportunity to provide comments on the draft Lower Snake River Dams Benefit Replacement Report.

The draft report raises serious concerns among U.S. Wheat Associates (USW) and its member states. The USW Transportation Working Group (TWG) questions many of the baseline assumptions argued in the draft report. The draft is incomplete because many of the key variables cannot be quantified. The Lower Snake River Dams (LSRD) provide a critical need that moves U.S.-grown wheat to high-value markets around the world. Breaching the dams would have serious economic consequences for producers and grain handlers. Removing the dams also runs counter to achieving climate-friendly goals.

Barging Benefits

USW strongly supports the sustainability and reliability of wheat transportation by barge. The Columbia Snake River System is an essential part of a logistical web that moves over half of all U.S. wheat exports to more than 20 Pacific Rim countries and encompasses some of the largest U.S. wheat buyers in the world. The Snake River moves more than 10% of all wheat that is exported from the United States. Because of the cost savings conveyed by barging grain and examples used in the draft report, we can conclude that farmers save considerably by using the waterway in place of rail or truck and are able to pass on savings to consumers.

Barge loading wheat to move through Lower Snake River Dams and down the Columbia River to export elevators.

The Lower Snake River Dams provide critical needs for wheat farmers, grain handlers, merchandisers, and millers. The draft report clearly outlines the benefits enjoyed by grain handlers, “barging is the lowest-cost option (per ton-mile) for wheat shipping, an additional benefit for Pacific Northwest producers, as they operate on narrow cost margins and use barging to maximize their profit per bushel.” Shifting the current volume of wheat and other grains moving via barge on the LSRD over to rail or truck is not a viable and straightforward solution as portions of the draft study imply. Rail and truck cost significantly more on a per bushel basis, and trucks have distance limitations.

Breaching Increases Transportation Costs

An excerpt from the draft report outlines the literal costs to farmers: “One of the most significant transportation impacts connected with LSRD breaching is shipping costs. Several studies cite shipping prices during scheduled lock outages for maintenance between December 2010 and March 2011 and found that during the outage, over 90% of the grain by volume was shipped by rail and that shippers experienced a nearly 40% increase in shipping and storage costs.” This example shows that railroads will use their power to raise rates when other alternatives, like the river system, are unavailable.

The Port of Lewiston is the most inland port in the U.S, Pacific Northwest. Its placement on the Snake River allows farmers in Idaho and other states to barge their wheat efficiently and affordably. The U.S. competes with six other primary wheat-exporting countries. According to the Foreign Agricultural Service (FAS), the United States is the third-largest wheat exporter in the world. However, for the U.S. to remain competitive with other wheat exporting nations, export prices must remain competitive. Inland transportation costs are a primary factor in determining the competitiveness of U.S. wheat. Using barges to ship grain is one of the most efficient and cost-effective ways that U.S. wheat farmers stay competitive.

Rail Cannot Make Up Difference

All wheat production zones in the U.S. would be impacted, not just those in close proximity to the Lower Snake River Dams system. The U.S. rail system has some severe issues with service and reliability, and in recent years, tariff costs to move wheat have steadily increased. Adding more volume to the system would raise costs for all farmers and lead to a decline in service for a significant portion of all U.S. wheat producers. This would directly impact U.S. wheat’s global competitiveness as an export market.

Transporting wheat by barge is an environmentally friendly alternative to rail and truck hauling. One four-barge tow can move as much grain as 144 rail cars or 538 semi-trucks. Removing the dams would not only remove clean hydroelectricity but would mandate more significant carbon emissions as grain handlers are forced to rely on railroads and semi-trucks for long-haul delivery to export facilities in Portland and elsewhere.

Map of the Columbia Snake River System from Pacific Northwest Waterways Association

Eight Steps Down. Lock and dam systems on the Columbia Snake River System allow barges to efficiently and safely navigate the 222-meter elevation change from Lewiston, Idaho, to export elevators as far west as Longview, Wash.

More Competition Not Less

The draft report provides no sincere considerations for alternative freight, and what suggestions it does make are unrealistic. While railroads and trucks compete with barge companies to move grain, farmers and grain handlers would be held captive without barges as an alternative.

USW supports the Columbia Snake River System and will continue to emphasize its importance in serving wheat buyers worldwide. Breaching of the dams on the Lower Snake River would have a devastating economic impact on wheat production and market competitiveness, not just in the Pacific Northwest Region, but nationally.

*This article represents public comments by the USW Transportation Working Group to the Lower Snake River Dams Benefit Replacement Report submitted July 11, 2022, by working group co-chairs Jim Peterson, Policy and Marketing Director, North Dakota Wheat Commission, and Charlie Vogel, Executive Director, Minnesota Wheat Research & Promotion Council.

 

thumbnail

A draft report on what would be needed to replace the benefits of the four Lower Snake River dams and locks was released June 9, 2022, for public comment through July 11, 2022. The report, conducted on behalf of Sen. Patty Murray and Gov. Jay Inslee of Washington state, suggests that breaching these dams to prevent the extinction of native salmon and replacing the benefits of barging and hydropower could cost between $10.3 billion and $27.2 billion.

Pacific Northwest (PNW) agricultural and commercial organizations responded to the report with serious concerns. A coalition of Republican members of Congress also introduced legislation that would protect the dams, arguing their benefits are irreplaceable.

No Dams, No Barges

U.S. Wheat Associates (USW) strongly supports the sustainability and reliability of wheat transportation by barge. The Columbia Snake River System is an essential part of a logistical system that moves more than half of all U.S. wheat exports every year to more than 20 Pacific Rim countries. Wheat loaded and barged on the Snake River makes up 10% of all U.S. wheat exports.

The Pacific Northwest Waterways Association (PNWA) questioned a number of baseline assumptions in the new report, including that the future value of the dams will decline and that all losses from dam breaching can be mitigated or compensated.

For example, PNWA Executive Director Heather Stebbings said in a news release that there are significant gaps in the report as it relates to understanding the reality of shifting wheat and other grains from barges to rail and trucks. This would require a massive investment in new infrastructure and likely increase wheat export basis with significant negative impact on regional farmers, the efficient Pacific Northwest export system and, ultimately, overseas wheat buyers.

Barge loading on Snake River

An estimated 10% of total annual U.S. wheat exports passes through the four locks and dams on the Lower Snake River between Lewiston, Idaho, and terminals like this one, to its confluence with the Columbia River and on to export elevators.

Serving Asia, Latin America

The Port of Lewiston on the Snake River, the most inland U.S. port, is uniquely positioned to source wheat from Idaho and other states. River terminals on the Lower Snake serve eastern Washington farmers. That wheat is barged on the Lower Snake River to the six major PNW export elevators serving Asian and Latin American wheat markets. All aspects of the river system are essential for transporting wheat from farm to market. However, barging is the most efficient, affordable, and environmentally friendly way to get that wheat to export locations. For context, one four-barge tow on this river system moves as much cargo as 144 rail cars or 538 semi-trucks.

Economic Value

This Columbia Snake River System transports four classes of U.S. wheat grown by dependable farmers in 11 states. In addition, some of that wheat and other crops for export markets are irrigated with water from the system. And the dams on the Columbia Snake River System generate 90% of the renewable electric power in the PNW.

Sean Ellis, representing the Idaho Farm Bureau, told the Capital Press its members “wholeheartedly” support ongoing efforts to improve salmon runs but continue to “adamantly” oppose dam breaching.

“There is no evidence to support the claim that breaching the dams would save the salmon but it’s quite clear that doing so would have a major negative effect on the region’s economy and put a lot of farmers out of business,” Ellis said.

Map of the Columbia Snake River System from Pacific Northwest Waterways Association

Eight Steps Down. Lock and dam systems on the Columbia Snake River System allow barges to efficiently and safely navigate the 222-meter elevation change from Lewiston, Idaho, to export elevators as far west as Longview, Wash.

“We continue to approach the question of breaching with open minds and without a predetermined decision,” Sen. Murray and Gov. Inslee said about their report. “In the coming weeks, we will carefully review and consider public input, tribal consultation, and other engagement from stakeholders before making any recommendations.”

A Necessary Link

The Columbia Snake River System and other major U.S. river systems truly connect the United States to its trading partners. The river system keeps U.S. wheat competitive by moving higher volumes more efficiently. USW, its state wheat commission members, wheat associations and supply chain stakeholders in the tri-state region of IdahoOregon and Washington all support the Columbia Snake River System and will work to see that it continues working for wheat buyers around the world.

thumbnail

A recently released econometric study confirmed that two export market development programs administered by the USDA Foreign Agricultural Service (FAS) benefit wheat farmers, their overseas customers and the general U.S. economy.

“Four studies since 2007 using various econometric models have all shown the same bottom line result – export market development programs work for American agricultural producers,” said Robbie Minnich, Chair of the Coalition to Promote U.S. Agricultural Exports and Senior Government Relations Representative with the National Cotton Council. “Without question, the economic benefits they return far exceed the investment made.”

Cover of USDA FAS Export Market Development yearbook for 2021.

Learn more about USDA export market development here.

U.S. Wheat Associates (USW) participates in the Market Access Program (MAP) and the Foreign Market Development (FMD) program on an annual basis. These programs are apportioned by law in the U.S. federal budget. They are public-private partnerships between USDA and organizations like USW and 17 state wheat commission members that help fund its activities. Across all the participating organizations, private contributions to the programs represented more than 70% of total funding in recent years.

Wheat Trade

Wheat is the most trade-dependent of the major food and feed crops grown in the United States. But individual farming operations cannot effectively market wheat overseas. The MAP and FMD programs help to encourage those customers to consider the various classes and qualities of U.S. wheat.

With funding from MAP, FMD and U.S. wheat farm families, experienced USW staff and consultants add exceptional value to all U.S. wheat class imports. USW also invests substantial funding to help overcome trade or technical barriers that would otherwise keep end-users from realizing the highest value and most revenue from using U.S. wheat.

“These export market development programs enable U.S. Wheat Associates to build a critical reserve of trust and goodwill with our overseas buyers, end-users and influential government officials, as well as key U.S. government agencies and officials,” said USW President Vince Peterson. “And there is a clear return on investment—for every dollar spent on export promotion, there is a return of $24.50 in additional net export revenue – and the return is even higher to the U.S. wheat supply system.”

U.S. Farm and Economic Returns

The new econometric study, conducted by IHS Markit and Texas A&M University agricultural economists Dr. Gary Williams and Dr. Oral Capps, showed export programs added an average of $9.6 billion per year to export value between 1977 and 2019. For farmers, livestock producers and dairy operators, the study showed MAP and FMD increased cash receipts by $12.2 billion per year. The study also indicated that these export market development programs added 225,800 new jobs across the entire U.S. economy.

“Our work indicated that MAP and FMD have accounted for 13.7% of all the revenue generated by U.S. agricultural exports between 1977 and 2019,” said Dr. Williams. “The additional export revenue bolsters the entire U.S agricultural sector and creates a multiplier effect throughout the U.S. economy.”

Infographic information noting 13.7% increase in revenue from export market development programs.

Export Market Development programs fund the trade and technical service that adds value to U.S. wheat imports and dozens of other U.S. agricultural export products.

The Coalition to Promote U.S. Agricultural Exports welcomed the results of the study. In letters sent on April 27, 2022, members of the Coalition, including USW and other organizations, asked U.S. House and Senate agricultural appropriations subcommittee leadership to maintain funding of at least $200 million for the Market Access Program (MAP) and $34.5 million for the Foreign Market Development (FMD) program in FY2023.

ATP Investment Also Analyzed

The study also analyzed the potential impact of the Agricultural Trade Promotion (ATP) program that the USDA established in 2019.

The ATP program provided $300 million to cooperating organizations, to which they contributed $90 million in cash, goods and services. The study’s analysis of future expected returns from those investments between 2019 and 2026 predicts that incremental funding for agricultural export market development will provide an excellent return.

The full export market development study, the Coalition letters to congressional appropriators, and more information about the value of U.S. agricultural exports to U.S. producers and their global customers are available at www.AgExportsCount.org.

thumbnail

It is 3:00 on a brisk and overcast Tuesday afternoon, and the sun is already low in the sky. I am sitting in the galley of a tugboat — state of the art, I am told. The tugboat has all the amenities any crew would need with five staterooms, a kitchen, a washer and dryer, and even a weight room. There is some tension on board, with a hurry-up-and-wait attitude, when the phone finally rings. The deck mechanic answers and the barge we are waiting on is finally loaded with 1,500 metric tons (MT) of soft white wheat. The motor hums to life, and we start moving, slowly, toward the grain elevator. It is growing dark as two grain barges are tethered together, and we begin downriver from Lewiston, Ida., headed to Portland, Ore. It will be a two-and-a-half-day journey first down the Snake River, connecting to the Columbia River and finally to the Willamette River, to reach our Portland export elevator destinations, about 360 miles.

This river, in general, is very handsome, except at the rapid, where it is risking both life and property to pass.” – From the Journal of Sgt. Patrick Gass, a member of the Lewis and Clark Expedition.

Michael Anderson is picture front, left with the crew of the tugboat crew.

We follow the same route that Lewis and Clark took as the “Corps of Discovery” traveled west. The rivers were different in 1805, untamed by today’s intricate system of dams and locks. The eight dams that we will pass through have made it possible to harness the rivers into a major artery carrying U.S. wheat bound for export from farm to port.

The boat rocks side to side on my first night. It is comfortable, but the unfamiliar feeling makes it hard to settle in. Suddenly the boat lurches, and the light outside gets brighter. The first lock, Lower Granite, comes into view from the deck. Two spotlights illuminate our way as we creep up to the lock. Slowly we approach the brightly lit lock and are guided in along a long concrete wall. The force of the shallow water beneath us is the only thing that keeps the tug and barges moving forward. With inches to spare on either side, we have entered the lock. Behind the boat, a gate rises from underneath the water; it is about three feet above the surface when suddenly the gate stops rising, and our boat starts sinking below the surface. It is a rapid movement, but it continues for a long time. The watermark rises above us as we descend below the surface, protected by thick concrete walls. Finally, we stop moving. We are now 100 feet below the level at which we entered the lock. I walk to the front of the boat just in time to see the gates in front, towering above us, start to open, revealing the river ahead, and slowly we make our way out of the lock and down the river.

As a crew member aboard a tug, your day is not a simple “9-to-5.” With one crew on and one off, the day is broken into shifts of six hours each, from 12 to 6 and 6 to 12. The environment shared by the crew is family-like, cooking meals together and watching TV. Only the person driving the boat, the captain or the pilot, is constantly on watch. The deck mechanics jump into action when the boat enters a lock or when we pick up another barge, and this journey is a four-barge tow, meaning four barges being pushed by one tugboat.

From the bridge, the captain has a sweeping view on all sides, and plenty of sophisticated equipment helps him navigate even when we are surrounded by fog, which in the Pacific Northwest is common. Another lock is just ahead. The boat only moves about nine miles per hour. We fit into the lock with precision, again with just a foot on each side to separate us from the massive concrete walls. Unlike the lock last night, this lock is too short to fit the whole tow in at once, but that is nothing out of the ordinary for this crew. Once the barges are tethered in place, the captain skillfully maneuvers the tugboat like a game of Tetris into a tiny space giving the back of the boat just enough room for the lock keeper to close us in. Again, a large iron gate rises from the water behind us, and like an elevator, we start moving down inch by inch. In front is what looks like a massive garage door. The lock opens, revealing the next stretch of the river ahead.

The mechanics of the lock are simple: we are moving down river with the flow of the water, so when we enter a lock, it is full of water. The lock seals behind us, and a valve is released to allow the water to rush out of the lock. The tow itself is being moved to the same level as the river we are moving down. Once the tow is at the same level as the water outside the lock, the valve is closed, and we wait for the massive concrete door ahead of us to open so the tow can move out. It is a similar procedure for ships going upriver against the flow, but instead of the valve releasing water, the valve fills the lock. It takes about 30 minutes to pass through each lock.

The Columbia Snake River System is a superhighway for moving wheat and other agricultural products from farm to market. The barges and rail lines that run on both banks of the Columbia River carry more than 55% of all U.S. wheat bound for export each year. Barges are the most efficient way to move large volumes of grain, making the river system a cost-effective and “green” logistical option. The Army Corps of Engineers maintains the lock system; its history goes back to the 1930s when President Franklin Roosevelt personally inaugurated Bonneville, the first of the eight dams and locks east of Portland.

After about 60 hours on board the tugboat, we arrive in Vancouver, Wash., on the north bank of the Columbia River. We drop off two barges at an export elevator and proceed west again, up the north-flowing Willamette River that bisects Portland. It is my third river in a week, and we are taking the last barge to an export elevator just across the river from the U.S. Wheat Associates (USW) West Coast Office. There is a vessel at berth waiting for the wheat we carry. The crew drops the barge, and me, at the elevator. I walk up a set of metal stairs connected to a hoist and hop off, touching land for the first time since Tuesday. I walk across the river on Portland’s Steel Bridge, under which the wheat from our tow will pass on its way overseas, to my office.A tugboat pushes a grain barges down the Snake River on its way from Lewiston, Idaho to Portland, Ore.

By Michael Anderson, USW Market Analyst

This story was originally published on October 21, 2019.

thumbnail

U.S. Wheat Associates (USW) joined other major shipping groups this week in calling on the U.S. Surface Transportation Board (STB) to adopt policies that have the potential to lower costs and improve service for wheat rail shippers and their customers. The policy proposal, commonly referred to as “reciprocal switching,” has been under the STB’s consideration for some time.

Reciprocal switching seeks to provide rail shippers such as grain elevators who are commonly only served by one railroad access to ship on other railroads, provided they are located within a reasonable switching distance. The desired effect is the creation of competition between railroads, where previously there was none. That competition has the potential to lower costs for USW customers around the world.

What is Reciprocal Switching?

The STB defines reciprocal switching (sometimes referred to as competitive access) as follows: Under reciprocal switching, an incumbent carrier transports a shipper’s traffic to an interchange point, where it switches the rail cars over to the competing carrier. The competing carrier pays the incumbent carrier a switching fee for bringing or taking the cars from the shipper’s facility to the interchange point, or vice versa. The competing carrier’s total rate to the shipper incorporates the switching fee. Reciprocal switching thus enables a competing carrier to offer its own single-line rate to compete with the incumbent carrier’s single-line rate, even if the competing carrier’s lines do not physically reach a shipper’s facility.

Freight Waves, an online publication, defines this concept in simpler terms: reciprocal switching occurs when a shipper has access to one freight railroad but wants access to a nearby competing freight railroad to cultivate a competitive pricing environment. A shipper can get that access at an interchange between the two railroads.

An executive order by President Biden encouraged the STB  to “promote competition and economic opportunity,” and specifically to encourage reciprocal switching.

Seal of the Surface Transportation Board

The Surface Transportation Board is an independent federal agency charged with the economic regulation of various modes of surface transportation, primarily freight rail. STB held a hearing on proposed reciprocal switching regulations March 15 to 16, 2022, 

What USW Advocates

Except for the Pacific Northwest, U.S. wheat production is not close to river transportation, and export facilities are too far away to rely on trucking. As a result, railroads play a key role in the export supply system. Over the last decade, rail rates have increased exponentially, and rates to ship wheat are higher than for other commodities with similar handling characteristics.

USW’s comments filed with the STB noted those higher rates between 22% and 39% for wheat movements compared to corn in four major regions. A June 2017 USDA Agricultural Marketing Service study corroborated these results, finding no underlying cause driving the increases in wheat rates. These premiums relative to other commodities demonstrate the current market power of U.S. railroads and the lack of competition afforded to wheat shippers.

USW also encouraged the STB to consider other relevant factors as it considers a new policy, such as: (1) whether the arrangement would further the rail transportation policies in 49 U.S.C. § 10101; (2) the efficiency of the proposed route; (3) whether the arrangement would allow access to new markets; (4) the impacts, if any, of the arrangement on capital investment, quality of service, and employees; (5) the amount of traffic that would be moved under the arrangement; and (6) the impact, if any, of the arrangement on the rail transportation network.

U.S. Wheat Competitiveness

Reciprocal switching has existed in Canada for many years, called “interswitching.” The situation there makes a compelling comparison to the United States because the spring wheat and durum growing regions are similarly positioned in the country’s interior. And the shipping distances to export facilities are nearly identical. However, despite the similarities, work collected by one of USW’s member state wheat commissions showed comparable origin-to-export point rail moves in Canada were 30% less than similar U.S. moves at the time.

Differing government rail policies (including more favorable terms for reciprocal switching) are one of the few significant differences in market position between the two countries. USW also realizes that the competitive access benefits Canadian farmers enjoy will make the proposed merger of Canada’s CP railroad with the KCS more advantageous for Canadian growers – if the STB does not apply its standard to enhance competition.

More Efficient Competition

USW believes that implementing reciprocal switching will make the rail system more efficient. We hope it will compel the railroads to provide better service and be more prepared by introducing more competition into the rail industry.

By Michael Anderson, USW Market Analyst