Grain Exports from Northwest U.S. Slow, but Terminal Managers Optimistic

Many recent projects have increased the importance of the Lower Columbia region in the Pacific Northwest to U.S. grain trade, including the newly completed $100 million expansion of Temco’s grain export terminal, which tripled its export capacity at the Port of Kamala, in the state of Washington.

Although the expansion has increased the terminal’s grain handling capacity from 2 million tons per year to 6 million tons per year, customers are not engaging the new facility as was originally hoped. The lull is due in part to the currently strong U.S. dollar making American exports more expensive than grain from other major suppliers, such as the Black Sea and South America, and in part to Asian markets still needing to realize the benefits of the expanded capacity at the Northwest U.S. sites.

Over the past five years United Grain Corp. and Columbia Grain have expanded their export facilities at Vancouver and Portland, EGT built a new terminal at the Port of Longview, and Kalama Export Co. spent $36 million to complete a new wheat cleaning system, and to add eight additional grain silos, and a loading belt. Despite these advances and expansions, grain exports from the Pacific Northwest have remain generally static.

Although the value of 2014 corn exports from Washington doubled, and the value of 2014 soybean exports from the state grew by 17%, it was needed to offset a drop in the value of meslin (a mix of wheat and rye) exports of 20%. Looking ahead, the volume of wheat exports from the region are forecast to fall another 16% this year. For 2015, analysts forecast that the volume of soy exports will increase, however, prices will remain under pressure from a record U.S. planting and competition from Brazil.

Despite these short term market factors, terminal managers see the long term strategic importance of the region, and are expecting to capture increased demand, particularly from Asia, as global market parameters and prices shift.