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Facts About U.S. Wheat Exports and the Columbia Snake River System

The Columbia Snake River System is the network of federal dams and locks on the Columbia River and connected water bodies, including the Snake River. This system enables grain barges to carry wheat 360 miles from Lewiston, Idaho, to export elevators as far west as Longview, Wash.

In marketing years 2019/20 and 2020/21, more than 55% of all U.S. wheat exports* moved through the system by barge or rail. Of the more than 15.0 million metric tons (MMT) of U.S. wheat exported from Pacific Northwest (PNW) export elevators each of those years, an estimated 4.6 MMT arrived by barge.

In addition, an estimated 10% of total annual U.S. wheat exports each year passes through the four locks and dams on the Snake River between Lewiston, the most inland port in the nation, and its confluence with the Columbia River.

Chart shows the amount of U.S. wheat by class that is exported through the Columbia Snake River System

Four Classes of Wheat are exported from PNW export elevators after arriving through the Columbia Snake River System by barge and rail. Source: Federal Grain Inspection Service. 

Grain Superhighway

In October 2019, U.S. Wheat Associates (USW) Market Analyst Michael Anderson shared his experience aboard a four-tow barge moving wheat from Lewiston to western export elevators on the deep-water Columbia River. Eight locks on the system allow barges to safely navigate the nearly 222-meter drop in elevation over that distance.

“The Columbia Snake River System is a superhighway of sorts for moving wheat and other agricultural products from farm to market,” Anderson said. “The ability to move such a large volume of grain efficiently makes the river system a very cost-effective and “green” logistical option. The Army Corps of Engineers maintains the lock system. And 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.”

Barge loading on Snake River

From Way Up River. Wheat is loaded onto a barge tow on the Snake River, the eastern segment of the Columbia Snake River System, near the start of its journey to export.

Earlier in 2019, Anderson noted why barging represents an essential part of the Pacific Northwest (PNW) wheat export supply system, including rail and trucking.

Barge Efficiency

“The rivers can move more volume at once, with greater fuel efficiency,” he wrote. “One barge can carry the same amount of wheat as 35 rail cars or 134 trucks. A barge tow can carry more than one 100-unit train or 538 trucks. And one barge can move a ton of wheat 647 miles per gallon while a truck can only move a ton of wheat 145 miles per gallon.”

The Pacific Northwest Waterways Association (PNWA) also reports that barging is a very safe way to move cargo, with fewer injuries, fatalities and accidental spills than other transportation options.

Economic Value

This 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.

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.

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 Idaho, Oregon and Washington all support the Columbia Snake River System and will work to see that it continues working for wheat buyers around the world.

* Source: Federal Grain Inspection Service

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USW to Surface Transportation Board: “Uphold the Values of Competition.”

In 2021, the Canadian Pacific Railroad (CP) announced plans to purchase the Kansas City Southern Railroad (KCS). After a few sidetracks, the proposed transaction is now under final review by the U.S. Surface Transportation Board (STB) to determine whether the two Class I railroads can merge. If successful, the new system will become the first tri-national railroad in North America.

On Feb. 22, U.S. Wheat Associates (USW) filed comments with the STB, stating opposition to the rail merger as “inconsistent with the public interest.” USW also suggested that, should the merger proceed, the STB should impose certain conditions “to eliminate the adverse impacts this transaction will have on wheat shippers that are large rail shippers in the United States.”

Wheat Depends on Rail

Farmers export approximately 50% of their wheat crop each year. As such, U.S. farmers depend on the railroads to provide reliable and affordable access to export markets. Wheat farmers rely on the railroads in large part because of location. A significant volume of exportable wheat is grown in the Plains stretching from Montana to Texas and the Pacific Northwest (PNW). Rail transportation in the PNW is supported by regional river access to ports. Shippers in the Plains states are captive to rail freight through their distance from any genuine alternative.

In its comments to the Surface Transportation Board, USW noted that the market power held by the Class I railroads* has serious implications for U.S. wheat’s competitiveness compared to other major exporters. Rail rates over the last decade have increased exponentially, and rates for wheat are higher than rates for other commodities despite similar handling characteristics.

“Where combination is possible, competition is impossible.” – George Stephenson, English Civil and Mechanical Engineer, known as “The Father of Railroads.”

Canadian Rail Advantages

The proposed transaction is especially relevant to U.S. wheat farmers as their Canadian competitors enjoy government protections that shippers in the United States do not. For example, the Canadian government enforces a Maximum Revenue Entitlement (MRE) on grain transportation to port facilities. This allows Canadian exporters to undercut U.S. exporters through rates set by statute instead of the market. During times of rail congestion, Canadian grain shippers have successfully lobbied their government to prioritize grain shipments over other sectors and have access to policies such as final offer rate arbitration and competitive switching. USW told the Surface Transportation Board if the merger would extend such treatment to the expanded CP line, Canadian shippers would enjoy an advantage that U.S. shippers under current conditions cannot.

The current KCS rail system also provides a direct link to the largest U.S. wheat importing customer, Mexico. Combining the two proposed rail lines will likely increase traffic and congestion on the combined network. In addition, nearly all Class I railroads have adopted a practice known as Precision Scheduled Railroading (PSR). USW suggested that practice actually created poorer service and higher rates for rail shippers over the last five years.

Map of the U.S. showing the rail system created by the Canadian Pacific Railroad purchase of Kansas City Southern Railroad

If approved by the U.S. Surface Transportation Board, the purchase of Kansas City Southern by Canadian Pacific Railroad would create the first tri-national railroad in North America.

Long History of Seeking Fairness

Arguments about rail competition today would not be unfamiliar across past generations of wheat farmers. Railroads have had a strong hand for a long time. During the industrial age, business interests sparred with the government over how to manage the expanding railroads.

The Interstate Commerce Act of 1887 was the first time Congress stepped in to regulate the railroads with “just and reasonable rate structures.” The railroad industry looks very different today. In 1980, the Staggers Rail Act made big changes to rail regulations. Infrastructure in the U.S. changed significantly in the decades between the two acts, necessitating changes to railroad oversight. Regulatory bodies meant to provide supervision have also changed. The Interstate Commerce Commission was abolished in 1996 and replaced with the Surface Transportation Board.

Enhancing Service

The STB must now answer a question it posed to railroads at the start of the 21st Century: “how to improve profitability through enhancing the service provided to their (railroads) customers.” Last summer, the Biden Administration directed the Surface Transportation Board to “promote competition and economic opportunity and to resist monopolization.”

In its comments filed this week, USW encouraged the STB to uphold the values of competition both for the wider railroad industry and in its oversight of “an economically sound and competitive rail transportation system.”

*There are currently seven Class 1 freight railroads in the U.S., a distinction defined by the railroads’ market capitalization.

By Michael Anderson, USW Market Analyst

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U.S. Wheat: Still the World’s Most Reliable Choice

The world’s wheat buyers have heard the claim that dependable U.S. farmers produce “the world’s most reliable choice.” U.S. Wheat Associates (USW) and the farmers we represent believe in that claim because so many customers rely on several classes of U.S. wheat to meet their specific end-use and quality needs and because importing U.S. wheat carries less risk.

The situation the world’s wheat buyers see today is uncertain. The invasion of Ukraine has disrupted already stressed exportable supplies. Market volatility is the result.

Fortunately, overseas customers know they can depend on the integrity of the U.S. supply chain, the quality of U.S. wheat and our unmatched reliability as a supplier. Here is why U.S. wheat remains the world’s most reliable choice.

The U.S. “Wheat Store” is Always Open

U.S. farmers overcome significant risk every year to meet domestic wheat demand and still provide half their crop for export markets. Farmers and commercial warehouses can store and efficiently transport wheat in top condition to meet overseas demand when needed and throughout the marketing year.

Prices are Transparent and Honored

U.S. wheat export prices are discovered openly through futures exchanges and basis costs and are always available to customers. Private exporters use risk management tools to honor sales contract prices often made months in advance of vessel loading.

Quality is Assured

USW publishes weekly reports during harvest that summarize initial wheat quality findings. USW works with several organizations and laboratories to analyze hundreds of harvest and export wheat samples for all six U.S. wheat classes and publishes all results in the annual Crop Quality Report. Our staff, farmers and industry experts then travel the world to present the results to our customers and end-users. Those customers know U.S. wheat will meet their specifications because the supply chain follows uniform grain segregation and inspection procedures.

Photo shows an FGIS inspector and wheat kernels demonstrating another reason why U.S. wheat is the world's most reliable choice.

The Federal Grain Inspection Service (FGIS) independently inspects wheat at vessel loading to certify that the quality loaded matches the quality stated in the customer’s contract. Those inspections yield valuable data down to the sub-lot level of 1,000 to 2,000 metric tons that customers can use, with assistance from USW, to get the most value from their tenders.

The Federal Grain Inspection Service (FGIS) independently inspects wheat at vessel loading to certify that the quality loaded matches the quality stated in the customer’s contract. Those inspections yield valuable data down to the sub-lot level of 1,000 to 2,000 metric tons that customers can use, with assistance from USW, to get the most value from their tenders.

Direct Government Export Intervention is Banned

The world’s most reliable choice is protected by several U.S. federal laws that assure the sanctity of all export contracts. The only exception is a declared national emergency. Export tariffs are forbidden in the U.S. Constitution, fully adhering to World Trade Organization disciplines, and U.S. policy prevents using food as a weapon.

Buyers Receive Unmatched Trade Service and Technical Support

With funding from dependable U.S. wheat farm families and USDA’s Foreign Agricultural Service, experienced USW staff and consultants add exceptional value to all U.S. wheat class imports.

Photo from a flour mill showing technical service that support U.S. wheat as the world's most reliable choice.

Technical Support and trade service from U.S. Wheat Associates adds value to imported U.S. milling wheat, helping make it the world’s most reliable choice.

Fostering Trade

USW invests substantial funding from farmers and federal programs 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.

The U.S. wheat industry is proud of its position as the world’s most reliable choice. All of us who participate in the industry believe that it contributes to world food security and economic stability, and work to maintain a transparent and open market to sustain that valued reputation.

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Wheat Export Supply System Map a Practical Tool for Importers

The first of its kind interactive wheat export supply system map that U.S. Wheat Associates (USW) introduced in 2020 is a helpful planning tool for U.S. wheat customers, our staff, and others. USW produced the map with Heartland GIS using USDA Foreign Agricultural Service Agricultural Trade Promotion program funds. The “USW Wheat Export Supply System” map is posted here on the USW website.

“There are six distinct wheat classes grown across many states and delivered by many different routes. So the U.S. wheat supply chain truly is driven by geography,” said USW Vice President of Overseas Operations Mike Spier. “The wheat export supply system map provides a geographical information system. That helps USW representatives show the world’s wheat buyers where the wheat they want is grown and transported to the export elevator.”

“Assisting overseas customers is a critical service that helps add value to U.S. wheat,” said USW Vice President of Communications Steve Mercer. “This wheat export supply system map is unique, and a practical addition to the trade service our representatives conduct around the world.”

Interactive export supply system map to help when buying U.S. wheat

Click on the map to use this tool.

 

The map includes a selection tool that allows the viewer to identify, in any combination, U.S. wheat production by class, wheat shuttle loading terminals, Class 1 U.S. rail lines and spurs, wheat terminals on major rivers, and export elevator locations.

“Working with U.S. Wheat Associates and its state wheat commissions, we used data from a lot of sources, including satellite imagery, to identify wheat planted area data,” said Todd Tucky, Owner and Senior Consultant of Heartland GIS. “I believe this is the most accurate representation ever developed of where individual U.S. wheat classes are produced along with the parts of the export system.”

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Moving Wheat Efficiently Through the Columbia Snake River System

In the Pacific Northwest (PNW), wheat can move by barge to export elevators from as far away as Idaho. That is because of the series of eight locks and dams that make safe, efficient navigation possible on one of the leading trade gateways in the United States — the Columbia Snake River System.

The Pacific Northwest Waterways Association (PNWA) notes that over 8.6 million tons of cargo are moved by barge on the inland portion of the system, feeding the deep draft lower Columbia River. The Columbia Snake River System is the top wheat export gateway in the nation.

Serving Asia, Latin America

Idaho exports more than half of its wheat crop each year. The Port of Lewiston on the Snake River, the most inland U.S. port, is uniquely positioned to source that wheat for 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 through the lower Snake River is the most efficient, affordable, and environmentally friendly way to get that wheat to export locations. For context, one 4-barge tow on this river system moves as much cargo as 144 rail cars or 538 semi-trucks.

An estimated 10% of all U.S. wheat exported every year moves through the four locks and dams on the lower Snake River. The Idaho Wheat Commission and its partners recently shared the short video below that tells the story of how the Columbia Snake River System works for the world’s wheat importers, for the U.S. farmers who grow that wheat, and for the people of the Pacific Northwest.

U.S. Wheat Associates (USW) will share more information about the crucial role of the Columbia Snake River System in future Wheat Letter posts.

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Things to Know When Buying U.S. Wheat

U.S. Wheat Associates (USW) works on behalf of U.S. wheat producers to help millers, bakers, wheat food processors and government officials understand the process of buying U.S. wheat at the best value possible.

The U.S. grain marketing system is reliable and transparent but can be complicated. So, USW keeps buyers and wheat food processors informed about the wide variety of U.S. wheat classes, how wheat moves to export markets as well as current crop quality and prices.

Interactive map to help when buying U.S. wheat

USW has developed an interactive map of regional U.S. wheat production by class and how it is transported to export terminals.

As part of a recent seminar for overseas buyers, USW Vice President and West Coast Office Director Steve Wirsching recorded a presentation titled “U.S. Wheat Market Overview.” From how regional climate affects wheat quality and USW’s process for sharing estimated export prices to how export basis regulates the flow of grain to market and the role of the Federal Grain Inspection Service (FGIS), Wirsching provides an important primer for buying U.S. wheat.

Many Resources for Buyers

Click on the image below to see the entire presentation that was used in the buyer’s seminar in July 2021. Additional information is always available online. And most importantly, USW representatives in 13 offices around the world, are always ready to help our customers, through trade service and technical support, making buying U.S. wheat a rewarding experience.

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Exporters Share U.S. Wheat with the World

The commitment of the people who participate in every step of the U.S. wheat export supply system helps build an unmatched reputation for both quality and reliability.

The 2021 crop is an unfortunate but telling example of how U.S. farmers overcome significant risks to meet domestic wheat demand and still provide sufficient supplies for export markets. Farmers and commercial elevators can store and efficiently transport U.S. wheat in top condition to meet overseas demand when needed and throughout the marketing year. Prices are discovered through futures exchanges and basis costs that are always available to customers.

High Standards

The rigorous crop inspection and management continues with private export companies where high standards create the consistency and trust overseas customers depend on.

These companies use risk management tools to honor sales contract prices often made months before vessel loading. The Federal Grain Inspection Service (FGIS) independently inspects wheat at vessel loading to certify that the quality matches the customer’s specifications.

FGIS inspector of U.S. wheat

The Federal Grain Inspection Service weighs and inspects every sub-lot of U.S. wheat to certify it meets each customer’s specifications. This inspector is dividing a wheat sample into two equal sub-samples for various inspection processes.

“It’s a critical function the Federal Grain Inspection Service provides to meet our contractual obligation overseas and create that global standardization,” said United Grain Corp. President and CEO Augusto Bassanini. “I think that separates the value of U.S. wheat and other grain products from the rest of the world.”

Those inspections also yield valuable data down to the sub-lot level of 1,000 to 2,000 metric tons that offer customers even more value from their purchases with help from U.S. Wheat Associates (USW).

Personal Integrity

“Creating that difference for U.S. wheat is all done through relationships,” Bassanini said. “We couldn’t do it without the people, whether in this organization, whether in U.S. Wheat Associates. Really, it is that quality of those individuals that really creates, again, the unrivaled value to our customers.”

Augusto Bassanini

Augusto Bassanini, President and CEO, United Grain, Vancouver, Wash.

United Grain and Bassanini generously offered their story in USW’s video presentation “Wholesome: The Journey of U.S. Wheat” as a representative of all private export companies that share the U.S. wheat crop with the world. Now “Wheat Letter” shares that story below.

Learn more about how USW works with buyers and the U.S. wheat export supply system here.

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Sharing a Way of Life: U.S. Wheat Farmers Invest Hard Work and Purpose in their Crops

Over the past few months, Wheat Letter has shared the story of the U.S. wheat supply chain. We started with the public and private wheat breeders who help protect wheat crops from extreme conditions while improving performance qualities. We discussed how U.S. wheat farmers carefully select the best wheat varieties to plant on their land, then care for the crop in more sustainable ways. And we demonstrated how grain handlers and exporters maintain wheat quality for their customers.

Behind this impressive industry, there are people who bring passion and purpose – intangible investments that go into every step of the field to export journey. As U.S. Wheat Associates (USW) says in its film, “Wholesome: The Journey of U.S. Wheat,” while the process makes U.S. wheat the world’s most reliable supply, the people make the wheat whole.

“I cannot imagine not doing this work,” said USW Chairman and Grass Valley, Ore., farmer Darren Padget. “We were born and bred to do it.”

Darren’s son and farming partner Logan agreed.

“I feel like what we do out here is very good. We raise some of the best quality wheat in the world and I am proud to be a part of it,” he said.

Jeremy Goyings, a fifth-generation farmer from Paulding, Ohio, sees intangible value in his work that U.S. wheat buyers around the world will appreciate.

“The reward is knowing that the things we have changed, the things that we do differently day-in and day-out means someone gets better quality food in the end,” said Goyings.

Wheat Letter invites you to learn more about how the ordinary people who grow U.S. wheat see great responsibility and reward in their work.

In October, November and December, Wheat Letter will continue focus on the unique end-product qualities and value of the six wheat classes these U.S. wheat farmers produce.

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Transporting the Crop: U.S. Grain Handlers Ask, “What Can We Do for You?”

As U.S. grain handlers transport wheat from the farm to grain companies by truck, river or rail, it is tested and sorted to meet customer specifications at every step of its journey to export elevators on the Gulf, Great Lakes or Pacific Northwest.

Logistics are a critical part of the work grain handlers do to make sure U.S. wheat arrives at export houses in peak condition and they take their jobs seriously. General Manager Paul Katovich and his colleagues at Highline Grain in Washington state think about the farm families they have served for generations. At the same time, like grain handlers across the United States, his organization is upgrading processes, storage and facilities to ensure those farmers and, ultimately, customers overseas are well served.

“We are all stewards of this platform,” Katovich said. “It is why we do what we do … with a greater purpose. What we talk about internally, in a group setting or when we go overseas, or when we have customers come here is, ‘What is it that we can do for you.’”

As a part of its film, “Wholesome: The Journey of U.S. Wheat,”  USW is sharing individual chapters of the video throughout the year. “Grain Handlers: Transporting the Crop” provides more information about the essential work of U.S. grain handlers.

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A Visit to an Export Elevator with United Grain Corporation

The United Grain Corporation (UGC) wheat, corn, and soybean export elevator in Vancouver, Wash., on the Columbia River, is the largest of its kind on the U.S. West Coast with storage of more than 220,000 metric tons. It was originally built in the 1920s and purchased by United Grain in 1970.

Like other U.S. facilities serving U.S. wheat buyers, the United Grain export elevator is part of the world’s most efficient supply system and is constantly improving.

“Every year we do upgrades and maintenance that make the facility the cutting edge operation it is today,” said Brian Liedl, UGC Director of Merchandising.

Video Tour

Earlier this year, U.S. Wheat Associates (USW) worked with United Grain to record a video tour of this amazing export elevator facility. USW Vice President and West Coast Office Director Steve Wirsching joined Liedl on a walk around the entire elevator and a detailed discussion of its systems. The program covers shuttle trains arriving from interior elevators and rapidly unloading wheat, explains how the facility separates and stores wheat by class and quality, discusses its investment in high-speed cleaning systems, and the essential work of federal grain inspectors.

Federal Control

Inside the inspection office, Liedl explained to Wirsching that under U.S. law, grain weight is measured and quality is tested by the Federal Grain Inspection Service before it is loaded onto a vessel for delivery.

“After our shipping bins are filled, those independent inspectors have control of the grain and only release it to be loaded after they determine it meets that customer’s specifications,” he said.

This program was created originally as part of a three-day USW seminar called “Contracting for Wheat Value” for Chinese customers. We are sharing it here to demonstrate how U.S. grain companies and the federal government are working to ensure all importers get the wheat they want as efficiently as possible.

Thank you to United Grain Corporation for their collaboration on this video.

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