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AGP’s new Pacific port an investment in
Midwest soybean farms & facilities

By Jim Rodenburg
AGP Communications Director

idwest soybean producers and their cooperatives now have their best-ever access to Pacific Rim customers, thanks to AGP’s new export terminal facility at the Port of Grays Harbor in Aberdeen, Wash. Last December, Omaha-based AGP, a federated soybean processing and marketing cooperative, loaded its first vessel at Grays Harbor with 23,000 tons of soybean meal bound for Australia. Since then, numerous other shipments of soybean meal, non-GMO (genetically modified organism) soybean meal and other specialty grain products have been exported to international customers through the new terminal.

The Grays Harbor facility will help keep AGP competitive in export markets, with reduced costs and shipping time to the Pacific Rim, as compared to transportation through the Gulf of Mexico and other Pacific Northwest ports. The terminal also has the ability to handle identity-preserved products, which are becoming increasingly important in international markets concerned about food safety and traceability.

"We’re very pleased with the facility and proud of the partnership we have at the Port of Grays Harbor," says Pete Mishek, AGP’s international trade manager. "The feedback from customers has been very positive."

Recently, Mishek and Greg Twist, AGP’s vice president for marketing, soy and corn processing, led a trade mission to the port, which was attended by buyers and brokers from Indonesia and directors from the Iowa Soybean Promotion Board (ISPB). Dick Vegors, marketing manager of grain and grain co-products, International Office, Iowa Department of Economic Development, also joined the group.

First meeting at port
This was the first time a soybean association and customers had met at Grays Harbor, during which Mishek told the ISPB farmer-directors that the facility is an investment in their markets. "We want our customers to know that AGP and Midwestern farmers are trying to reach them in more efficient ways every year," Mishek stressed, adding that AGP has been shipping soybean meal through the Pacific Northwest for about 15 years.

The importance of Pacific Northwest exports has been heightened by two developments, according to Mike Zahn, a commodity analyst who gave the group a briefing on the grain markets and industry trends: "These factors set up a real opportunity for West Coast shipments," Zahn says.

AGP’s custom-built facility on Terminal 2 at the port is the closest, most direct route from its processing plants in the Midwest to Pacific Rim customers. Gary Nelson, executive director of the Port of Grays Harbor, says the deep-water port is two hours from open sea, compared to 12 hours from other Pacific Northwest export facilities located on the Columbia River.

The Port of Grays Harbor made several modifications at Terminal 2 to handle AGP’s design criteria for Panama Canal-sized vessels. These included berth expansion, a heavier fender system and upgraded mooring dolphins to secure larger vessels than the logging ships the port has traditionally handled.

Rail system key to operation
The rail system is an integral part of the operation. The Puget Sound and Pacific Railroad, a short-line railroad serving the port, connects with both the Burlington Northern Santa Fe (BNSF) and Union Pacific (UP) railroads. A new, 8,000-foot looped track was built around the terminal in order to move cars continuously through the unloading facility without switching. AGP also has a staging area that will hold approximately 300 railcars prior to the arrival of a vessel.

During unloading, Nelson points out that product is fully covered from the receiving building to the ship, helping maintain product quality. Railcars are emptied two at a time over a 100-foot-long receiving pit, and the product moves along on air-supported conveyors to a scale and automatic sampler. This high-speed conveying system has no cracks or crevasses to retain product, while brushes and air jets continually clean the belt.

A mobile loader that traverses the length of the dock to load the ship is another feature of the terminal. This allows the ship to remain stationary, saving on fuel and crew costs, as well as reducing loading time.

The terminal is equipped to meet or exceed international standards for weights and grades, and can be washed and cleaned after each shipment to meet requirements for identity-preserved products.

Market success hinges on
quality and timeliness
"What makes the whole thing work is the people here at the port," says Mishek. "The work ethic and commitment from the longshoremen and port management is superb. We have great partners."

Those partners include Midwest soybean producers, who are represented by associations such as the Iowa Soybean Promotion Board (ISPB).

"The ISPB has been very interested in the Grays Harbor project from the early stages, as exports are extremely important to the soybean industry," says Grant Kimberley, market development manager. "For U.S. producers to stay competitive with South America, we must guarantee consistency, quality and timely service. And that’s what this new port facility can do."

The ISPB has worked with AGP to bring in potential international customers so they can see the whole process from the very beginning on the farm, to the elevator, to the processor and then on out to the port facility.

"We are trying to show customers that we are serious about meeting their needs, listening to their concerns and showing them what we can accomplish," says Kimberley.

Vegors was equally enthused about the opportunities the port terminal represents for Iowa and Midwest agriculture. "As we get to see more gene stacking and specialty traits of grain that companies in foreign countries are desiring, the ability to clean out the facility and turn it from one product to another makes it ideal for the IP process," Vegors says.

During the visit to the port, Greg Twist told the Indonesian contingent about AGP’s success working with member cooperatives and their farmer owners to produce, process and deliver identity-preserved products, such as non-GMO soybean meal. He also says the quality of soybeans can be raised through AGP’s approved variety program.

"Spending time developing face-toface relationships with international buyers -- such as the Indonesians, who represent some of the largest consumers of soybean meal in the world -- is a very valuable investment," Twist says. "I think they were very impressed with the port facility and realized that U.S. farmers take a real interest in supplying quality and meeting or exceeding their needs. It’s all about bringing value to our customers in order to increase exports, and that value includes a competitive and efficient transportation system."

For more information about AGP’s export terminal, go online to: www.agpportofgraysharbor.com.























Co-op boosting yields of protein, oil
through approved variety program

In addition to gaining greater access to foreign markets for its members, AGP is also striving to add value to its products by encouraging farmers to enroll in its Approved Variety Program, which promotes planting soybean varieties that produce higher-than-average yields of oil and protein .

Leon Wojahn, a northwest Iowa soybean producer, has planted 200 acres of soybeans with AGP-approved varieties, a four-fold increase from his participation level last year.
"“I contracted 50 acres in the program last year through my local cooperative, MaxYield Cooperative, to try it out. I had a good experience," says Wojahn. "Those nickels add up."

By planting and contracting AGP-approved varieties through participating member cooperatives, producers are guaranteed component premiums of at least 5 cents a bushel. These soybean varieties have historical data showing potential for achieving desirable oil and protein levels.

"I think we’ve proven that it’s a fairly easy program [launched in 2003] to comply with, as producers are not necessarily required to make big shifts from what they’re already planting," says Greg Twist, AGP marketing vice president for soy and corn processing.

"We’re starting to make some headway in raising producers’ awareness of what they’re putting in the field. They’re asking questions about oil and protein content, which is now becoming a front-burner issue for seed companies as they develop new soybean varieties and work on their genetics."

While some varieties on the approved list for 2003 failed to make the grade for 2004, Twist says even more new varieties have been added, giving producers increased planting options under the program.

"A good feature of the program is that some of the varieties already popular in this area are included," says Gary Strube, general manager, Great Lakes Cooperative in Everly, Iowa. "It’s an easy way for a producer to pick up $2.50 an acre, based on 50-bushel beans. We think it’s a good program for soybean farmers and it has helped boost our seed sales."

Cooperative managers of participating cooperatives are taking the opportunity to report to their board not only about local earnings, but also additional premiums that their members receive for contracting approved varieties. "This revenue doesn’t necessarily show up in the cooperative’s bottom line, but it is having a positive economic impact on its members," said Twist.
By Jim Rodenburg

Agriliance to operate major terminal at Port of Galveston

To help it better provide wholesale dealers with crop nutrients, Agriliance has signed a lease with the Port of Galveston to operate a general-purpose bulk cargo terminal. Agriliance, a joint venture owned by CHS Inc. and Land of Lakes, will enter a 15-year lease with the port, with an option for seven additional threeyear renewal periods.

By mid-2008, Agriliance expects to ship more than 800,000 tons of cargo annually through the terminal.

"With the Port of Galveston, we’re enhancing our crop nutrients distribution capabilities across all U.S. markets, especially for rail shipments to western regions," says George Thornton, Agriliance president and chief executive officer. He says Agriliance also anticipates that moving shipments through Galveston will allow the company to divert some rail loads from Mississippi River terminals, thereby helping ease river bottlenecks.

"We began importing bulk product in 2003 through a port in Louisiana," he continues. "Expansion into Galveston is an integral part of our company’s import strategy, which is expected to increase significantly in the near term."

Steven M. Cernak, port director, says "This agreement will allow the Port of Galveston to increase our cargo throughput, which will result in increased employment at the facility and at other ancillary companies servicing the new terminal."

Agriliance will operate as a general-purpose bulk cargo terminal that will initially receive only inbound products. The longer-term goal is to make improvements to allow for both import and export operations. Potential cargoes include bulk fertilizer products, bulk agricultural products, bulk grains and grain substitutes, non-hazardous bulk minerals or mineral products and non-hazardous chemicals.

Pier 35/36, the old Imperial Sugar Docks, was previously leased to River Materials LLC. With the signing of the agreement, Agriliance acquires the use of the terminal and purchases the assets of River Materials.

Agriliance LLC markets crop nutrients, crop protection products, and seed and crop technical services to farmers and ranchers through local cooperatives and independent dealers in all 50 states, Canada and Mexico.


September/October Table of Contents