Farming Out Exports

The biggest boost to U.S. farm exports in the next decade may well come courtesy of neighbors to the north.

Farmers and ranchers in the Midwest have long complained that they have been left out of the export boom because transportation costs to West Coast ports are too expensive, leaving them uncompetitive in the global marketplace.

Cattle and hogs are raised in the Midwest. Dairy herds there provide the raw ingredients for high-value cheese and ice cream in demand overseas, but those commodities and products are located frustratingly far from oceangoing vessels.

Over the last few decades, railroads have streamlined their networks, eliminating many intermodal ramps. And, of course, ocean carriers don’t like to see their reefer containers too far from the coast. According to the U.S. Department of Agriculture’s Agricultural Marketing Service, the average weekly throughput from Denver, Minneapolis, Kansas City, Chicago, Cincinnati, Memphis and Columbus during the last six months was 113 40-foot refrigerated boxes, with 106 going from Chicago.

If exporters do get loads to a port, they still must get a slot and then put up with ultra-slow-steaming to foreign customers.

The Canadian government in late January signed off on plans for the Port of Prince Rupert to quadruple its footprint; and Canadian National Railway said it would spend $1.9 billion this year to improve its network. Some of the capital will go to adding capacity in the corridor to Prince Rupert.

Earlier in January, CN opened its $220 million Calgary Logistics Park. The railroad also will expand intermodal terminals in Memphis, Toronto and Edmonton this year and build an intermodal terminal in Indianapolis with Indiana Rail Road.

What’s it all mean? CN and Prince Rupert see a golden opportunity in the export business. The rail carrier offers Chicago-to-Prince Rupert service in 100 hours. Once there, no truck dray is required because on-dock rail offers a fast, smooth and less expensive exchange. And once a refrigerated container gets loaded onto a vessel, the ocean voyage to Asian markets is about three days shorter than from Southern California.

The service could be speedy enough to allow exports of high-value chilled meats, instead of lower-priced frozen shipments. Just think: Canada’s northwestern container port may give farmers from the U.S. Midwest a real shot at competing globally.

Contact Stephanie Nall at stephnalljoc@gmail.com.

 

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