Friday, May 14, 2010
Lock Closure Vital to PNW Wheat Flow; Helping Buyers Adjust
U.S. Wheat Associates (USW) noted in the April 15, 2010, issue of Wheat Letter that it is helping overseas wheat buyers adjust to the Columbia Snake River System (CSRS) maintenance closure beginning Dec. 10, 2010 (http://bit.ly/d78nFQ). This forward-looking upgrade assures that the critical CSRS will remain operational for decades ahead. The U.S. wheat industry is the world's most reliable supplier, and this maintenance project is just one of several improvements in the Pacific Northwest (PNW) that will serve you even more effectively and efficiently, including:
•New construction and expansion of several elevators;
•Completion of the Columbia River channel deepening project in December 2010 to allow 60,000-metric-ton-capacity vessel load-outs.
Ready to Help. USW recognizes that the river system upgrade will create some challenges for customers taking delivery of U.S. wheat off the PNW. We take any concerns seriously and can help you manage possible impact before, during, and after the lock closure. USW believes the industry will consider every logistical option to keep wheat, especially soft white wheat, flowing to export elevators. Buyers can help themselves by preparing for the maintenance period -- and USW stands ready to help.
The Supply Chain is Getting Ready. About 75 percent of the four million metric ton (MMT) annual export movement of PNW soft white (SW) and club wheat is river barged on the Columbia, Snake, and Willamette Rivers. Exporters, grain originators, barge operators, railroads, and trucking lines are all working to minimize interruptions and costs. Alternatives include:
•Pre-positioning the maximum number of barges to load SW before the closing;
•Moving more rail cars and locomotives into the region to handle increased demand from rail-loading interior elevators;
•Pre-positioning more SW and club in Columbia River District export elevators before the closure;
•Loading SW in barges from Mid-Columbia Producers elevators below The Dalles, OR, during the closure;
•Coordinating truck and rail delivery from the Willamette Valley, south of Portland.
Preparation Will Also Benefit Buyers. USW believes there will be sufficient volume of all U.S. wheat classes normally available from the PNW. Buyers can also help lower the risk of interruption and minimize potential costs by taking a longer view of their purchase needs. USW advises its customers to consider:
•Consulting with PNW exporters as early as possible to help give exporters more time to respond to your needs and to manage their logistical challenges;
•Meeting soon with USW to identify buying strategies that fit specific needs and capabilities;
•Analyzing inventory needs and logistical capabilities;
•Increasing SW wheat and/or flour storage;
•Increasing SW purchase cadence in the harvest and immediate post-harvest period (July – November) before the closure;
•Deferring as an offset some hard red winter (HRW) and hard red spring (HRS) shipments from the immediate post-harvest period into the maintenance period.
Working Together. As an objective voice for U.S. wheat producers, USW greatly values the trust customers have in our products and service. Our focus remains fixed on helping buyers, millers, and food processors learn how to grow their enterprises using our wheat. Working together, we believe we can help ease any concerns related to the closure and strengthen our partnership. We look forward to assisting you now, as always.