"Pacific Northwest Terminal Capacity Increased
Cliff Jamieson Canadian Grains Analyst writing for DTN
Fri Aug 3, 2012 05:08 PM CDT
July 9 marked the grand opening of the first export terminal to be built in the U.S. in 25 years, with exports to Asia being the primary focus. The terminal is the EGT terminal in the Port of Longview, Wash. The EGT group is a partnership between Bunge, Itochu Corporation from Japan and STX Pan Ocean, who is one of the largest ocean carriers in the world based in South Korea.
The U.S. focus on Asian exports comes as no surprise. In 2005, China was the sixth largest customer for U.S. agriculture exports, while in 2011, they were the largest, with $22 billion dollars worth of agriculture exports moved. Also, in 1983, 15% of agriculture exports were shipped from the Pacific North-West region, while in 2009, this amount grew to 28%.
It's also interesting that this group is also building three facilities in Montana -- in Carter, Chester and Kintyre. Another interesting note is that a Cargill/CHS partnership is also expanding their terminal capacity at Kalma, Wash., which is close to Longview.
The EGT terminal is a $200 million state-of-the-art facility which will unload a 110-car unit train in five hours, using robots which open and close the hoppers. I'm told the operation operates 24 hours, unlike our Vancouver terminals. Overall loading and unloading capacity is 3,000 metric tons per hour, with the annual capacity targeted at 8-9 million metric tons.
From a Canadian perspective, one could approach this news with mixed-feelings. Terminal capacity, especially a highly efficient terminal such as this, will compete head-to-head with Canadian grain loaded from our west-coast terminals at Vancouver and Prince Rupert. That's the bad news.
At the same time, it only makes sense that the U.S. is building to enhance Asian trade given the rapid growth in demand in this region of the world. We may find that this capacity is most welcomed by Canadian market participants who may be locked out of the Vancouver terminals that are owned by a small number of players. Rates into the PNW region are said to be aggressive from southern Alberta and perhaps even south-western Saskatchewan, with the focus on bigger plants shipping 110 car unit trains. Should this terminal level the playing field between those that own facilities and those that do not, producers on the prairies can only win due improved shipping prospects and possibly even higher prices to the increased competition.
I've long held the belief that the deregulated marketplace in western Canada will force market participants, including the many new names that we hear of, to turn over every stone in order to find cheaper, faster and more reliable ways to get Canadian grain on an ocean vessel. Time will tell if this terminal finds itself playing a role in the Canadian grain industry.
Cliff Jamieson
Canadian Grains Analyst
Bio on DTN
http://www.dtnprogressivefarmer.com/dtnag/common/link.do;jsessionid=5C32B0393612A5B491D1F23AC1D0405 3.agfreejvm2?symbolicName=/ag/blogs/template1&blogHandle=canadamarkets&blogEntryId=8a8 2c0bc3865298c0138ee887ade0596
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Dear Charlie and Errol et.el;
It is truly great to see competition for western Canadian grain shipments.
Shipping WEST to Asia is the biggest future for our grains... which is why the CWB buying Lakers was so crazy... especially making western SK and Alberta growers pay for them.
Had Chairman Oberg and his band of outlaws not messed this up so badly... we may well have seen a very different schedule on deregulation of the Single Desk.
It truly does look like CWB ExCHair Oberg and his NFU Director buddies pushing Minister Ritz and PM Harper into a corner as Deregulation could have easily been drawn out over 4 years with barley first etc...
It is clear now this was for the better of us all... ESPECIALLY now the way 2012 has turned out. Livestock producers in western Canada have scads of feed... and we grain growers have plenty of inventory to share with the USA and Globally.
How do we Thank CWB ExChairman Oberg... for messing up so badly... that Freedom and Liberty came sooner!
Cheers!
TJ
Cliff Jamieson Canadian Grains Analyst writing for DTN
Fri Aug 3, 2012 05:08 PM CDT
July 9 marked the grand opening of the first export terminal to be built in the U.S. in 25 years, with exports to Asia being the primary focus. The terminal is the EGT terminal in the Port of Longview, Wash. The EGT group is a partnership between Bunge, Itochu Corporation from Japan and STX Pan Ocean, who is one of the largest ocean carriers in the world based in South Korea.
The U.S. focus on Asian exports comes as no surprise. In 2005, China was the sixth largest customer for U.S. agriculture exports, while in 2011, they were the largest, with $22 billion dollars worth of agriculture exports moved. Also, in 1983, 15% of agriculture exports were shipped from the Pacific North-West region, while in 2009, this amount grew to 28%.
It's also interesting that this group is also building three facilities in Montana -- in Carter, Chester and Kintyre. Another interesting note is that a Cargill/CHS partnership is also expanding their terminal capacity at Kalma, Wash., which is close to Longview.
The EGT terminal is a $200 million state-of-the-art facility which will unload a 110-car unit train in five hours, using robots which open and close the hoppers. I'm told the operation operates 24 hours, unlike our Vancouver terminals. Overall loading and unloading capacity is 3,000 metric tons per hour, with the annual capacity targeted at 8-9 million metric tons.
From a Canadian perspective, one could approach this news with mixed-feelings. Terminal capacity, especially a highly efficient terminal such as this, will compete head-to-head with Canadian grain loaded from our west-coast terminals at Vancouver and Prince Rupert. That's the bad news.
At the same time, it only makes sense that the U.S. is building to enhance Asian trade given the rapid growth in demand in this region of the world. We may find that this capacity is most welcomed by Canadian market participants who may be locked out of the Vancouver terminals that are owned by a small number of players. Rates into the PNW region are said to be aggressive from southern Alberta and perhaps even south-western Saskatchewan, with the focus on bigger plants shipping 110 car unit trains. Should this terminal level the playing field between those that own facilities and those that do not, producers on the prairies can only win due improved shipping prospects and possibly even higher prices to the increased competition.
I've long held the belief that the deregulated marketplace in western Canada will force market participants, including the many new names that we hear of, to turn over every stone in order to find cheaper, faster and more reliable ways to get Canadian grain on an ocean vessel. Time will tell if this terminal finds itself playing a role in the Canadian grain industry.
Cliff Jamieson
Canadian Grains Analyst
Bio on DTN
http://www.dtnprogressivefarmer.com/dtnag/common/link.do;jsessionid=5C32B0393612A5B491D1F23AC1D0405 3.agfreejvm2?symbolicName=/ag/blogs/template1&blogHandle=canadamarkets&blogEntryId=8a8 2c0bc3865298c0138ee887ade0596
_______________________________________
Dear Charlie and Errol et.el;
It is truly great to see competition for western Canadian grain shipments.
Shipping WEST to Asia is the biggest future for our grains... which is why the CWB buying Lakers was so crazy... especially making western SK and Alberta growers pay for them.
Had Chairman Oberg and his band of outlaws not messed this up so badly... we may well have seen a very different schedule on deregulation of the Single Desk.
It truly does look like CWB ExCHair Oberg and his NFU Director buddies pushing Minister Ritz and PM Harper into a corner as Deregulation could have easily been drawn out over 4 years with barley first etc...
It is clear now this was for the better of us all... ESPECIALLY now the way 2012 has turned out. Livestock producers in western Canada have scads of feed... and we grain growers have plenty of inventory to share with the USA and Globally.
How do we Thank CWB ExChairman Oberg... for messing up so badly... that Freedom and Liberty came sooner!
Cheers!
TJ
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