Disruptions at Washington port | Service shutdown comes as market outlook for wheat declines
A labour dispute involving longshoremen at Vancouver, Washington, is disrupting American wheat exports and causing concern among American wheat producers.
In a recent industry newsletter, the U.S. Wheat Associates (USW), said it is “very concerned,” about current disruptions affecting wheat exports through Washington’s Port of Vancouver.
According to USW, a dispute between United Grain Corp. and International Longshore and Warehouse Union workers has resulted in the suspension of official grain inspection and weighing services at United Grain’s export terminal in Vancouver.
Inspection services at the facility have been suspended since July 7.
USW and other groups are calling on the United States Department of Agriculture to provide the service.
National Association of Wheat Growers president Paul Penner echoed those concerns and said its time for federal grain inspectors to step in and do their jobs to get grain flowing.
USW president Alan Tracy called the situation unacceptable.
“With half of all U.S. wheat exported, exports are the key to producer prices. Shutting down a major export elevator for any period seriously disrupts our system, short changes our customers who rely on us for their supplies and costs farmers money.”
Labour disputes are only one issue weighing on the minds of U.S. wheat producers.
The outlook for wheat markets isn’t rosy, based on expectations of larger-than-normal North American carryouts, ample production in key wheat growing regions and large global supplies.
Heavy demand for rail capacity, especially in the northern U.S. Plains, is expected to cause widening basis levels. In the United States, bids for shuttle trains used to move grain to port position have risen sharply.
Daniel Basse, analyst and president of Ag Resource Company in Chicago, said bids for unit trains to carry grain and other commodities to export position exceeded $3,000 per car as of late July, up from a range of $100 to $600 per car a year earlier.
Demand for unit trains from the energy sector is pushing freight rates higher in the United States and will push grain prices down.
“In the United States, we’re seeing more and more shale gas plays throughout our gas basin, which of course extends into Canada, and this is really … having a tremendous impact on … rail and freight rates,” said Basse, who spoke in Regina July 31.
“We just can’t carry enough energy, water, gas, crude oil and we’re not moving ahead on the Keystone pipeline. All of this backing up and its going to have a tremendous impact on agriculture.”