Wheat exports through Port of Kalama booming

High world prices, a weak U.S. dollar and decline in international competition have grain exports booming at the Port of Kalama.

In particular, activity is way up at United Harvest - the southernmost and historically lesser-used of two grain terminals at the port.

Revenues reached $1.6 million at United Harvest as of June, more than five times the $300,000 in income the port projected it would net from grain exports this year. The revenues come from dockage tariffs levied on every freighter that ties up at the port.

"The demand for grains overseas, particularly in China, is higher," said Mark Heidegger, a Vancouver-based controller for United Harvest.

Grains exported at Port of Kalama include wheat, soybeans, corn and some beet pellets.

Kalama is benefiting from the lowest worldwide wheat production in 30 years, according to the Oregon Department of Agriculture. Much of that is due to a drought in Australia and poor weather in Europe, Asia and South America.

At its highest level, a bushel of U.S. wheat this year sold at more than $16 a bushel - up from its typical rate of $3 a bushel, according to ODA.

"Right now we are the hot market because of availability and price," said Lanny Cawley, Port of Kalama's executive director.

That translates to more revenue at Port of Kalama. "We like that," Cawley said.

When prices are high, farmers tend to sell more their crop right away rather store it in hopes the price will increase, he said.

For that reason, Cawley expects exports will decline in a few months after U.S. farmers sell all of their existing crops.

However, newfound uses for grains in biofuels are expected to keep demand and prices high even after international competitors re-enter the market, he said.

"I don't think the grain prices are going to go down any time soon," Cawley said.

Port of Kalama is the state's largest grain exporter and features two terminals: United Harvest and Kalama Export.

Kalama Export is the port's main grain terminal, a state-of-the-art facility that moves up to four full trainloads of grain a day. The United Harvest terminal was built in the 1960s and offers a lot of storage capability, but turnaround from rail to ship is comparatively slow.

Activity at Kalama Export is up with 122 ships docking there as of the end of August, up from 108 in the first eight months of 2007.

By the end of August, 38 ships had loaded at United Harvest. Last year, 17 ships docked there by that time.

More ship traffic is good news for longshoremen, said John Philbrook, President of the International Longshore and Warehouse Union.

"The more we work, the more money we make," he said.

Cawley said this year is an exception in the grain industry. He expects the port will budget for more typical numbers in 2009.

Heidegger doesn't expect international demand will remain this high for long, but some markets should stay strong.

"There's still going to be larger demand in certain areas like China," he said.

Mindi Linquist, Port of Kalama spokeswoman, said the Columbia River channel-deepening project in progress will allow ships to fill with more grain by this time next year. Now, grain freighters sometimes leave partially empty because the channel is not deep enough to handle a fully loaded ship.

"They'll definitely be able to leave here full and that will help us be competitive in the world market," Linquist said.

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Information from: The Daily News, http://www.tdn.com