Grain on the upswing: Shipments rebound due to demand for U.S. wheatA jump in iron ore shipments in Duluth-Superior this year is driving a shipping rebound after a dismal 2009 season. But grain is the up-and-comer.
By: Candace Renalls , Duluth News Tribune
A jump in iron ore shipments in Duluth-Superior this year is driving a shipping rebound after a dismal 2009 season.
But grain is the up-and-comer.
So far in the 2010 shipping season, grain shipments out of Duluth-Superior harbor are up 27 percent over the same period in 2009 and 67 percent over 2008, according to figures from the Duluth Seaway Port Authority.
Still, it’s nothing to brag about, said Ron Johnson, the authority’s trade development specialist.
That’s about to change, however, as the port begins to benefit from the misfortunes of other major grain producers in the world.
“We’ve already seen a flurry of activity,” Johnson said, noting that some companies in the grain trade expect to have the busiest September and late autumn in four or five years.
That’s because Russia, a major player in the global grain market, has seen its wheat crop decimated this year by severe drought and wildfires.
Russia recently banned wheat exports and won’t honor existing contracts, opting to keep what grain it does have for its own needs.
“That’s pretty serious,” Johnson said. “That sent the market in another direction. Everybody is scrambling to replace 10 to 20 million tons of wheat.”
“A lot of the wheat out of Russia is high-quality spring wheat used for baking, and that’s what we ship out of here, from the Dakotas and Minnesota,” he said. “It’s a big plus for our region. And we have a good quality and quantity of crops this year.”
Other grain-producing countries affected by the drought, such as the Ukraine and Kazakhstan, may follow Russia’s lead and also stop grain exports. Closer to home, Canada’s grain exports are down after production dropped 21 percent because of excessive rainfall.
With a bountiful crop this year, United States wheat and other grains are suddenly in demand.
And that means a boom for grain trade out of ports like Duluth-Superior.
“Normally Canadian lakers are booked to haul Canadian grain out of Thunder Bay,” said Adele Yorde, a Port Authority spokeswoman. “A lot of these ships were laid up, and now being called out to Duluth-Superior to bring grain out to transfer to saltwater ships.”
David Torgerson, executive director of the Minnesota Association of Wheat Growers, already is seeing the impact. Some Middle Eastern countries that typically buy from Russia have ordered Minnesota grain in the last month. And they want it shipped as soon as possible.
“The trade is anticipating a real banner export year,” Torgerson said. The demand is so great, some doubt the United States can meet the demand in needed ships and facilities, he said.
Johnson agreed, saying, “We don’t have enough ships available to handle it.”
So ships are coming. Lots of them.
And in the Twin Ports, they’ll be loading up on grain grown in Minnesota and the Dakotas that will end up in Canada, Russia the Middle East and other countries hungry for grain.