December 18, 2014

West Coast Port Worries

Increasing congestion in West Coast ports, where longshoremen have been working without a contract for nearly six months, is a growing concern for the U.S. meat industry and export trade.

About one-third of U.S. beef and pork exports travel to Mexico and Canada by ground transportation, the remainder relies almost entirely on ocean freight.

U.S. Meat Export Federation President and CEO Philip Seng says the red meat industry is watching the developments carefully…

Trouble Brewing

On a monthly basis, waterborne red meat exports moving through West Coast ports amount to more than $600 million.  Seng notes that meat importers have customers to serve, and they need reliable suppliers.

Reliability

A six-year labor contract between the Pacific Maritime Association and the International Longshore and Warehouse Union expired this summer – and negotiations have recently become contentious.

The congestion crisis has been most pronounced at the twin ports of Los Angeles and Long Beach.

Port officials recently said the number of ocean freighters kept waiting outside the two ports has fluctuated from about eight to 18 on any given day since the slowdown began around mid-October.

USMEF

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Corn Harvest Report Indicates Good Quality/Record Crop

According to the U.S. Grains Council’s 2014/2015 Corn Harvest Quality Report, the overall quality of the United States’ 2014 corn crop was good, with 88 percent of samples rating at grade No. 2 or better.

Total U.S. corn production for 2014 is estimated at 14.4 billion bushels , an all-time record, according to the Department of Agriculture.

The Council report said weather, like usual, had a significant impact on the crop’s development and ultimately on many of the corn quality factors measured including moisture content, total damage and stress cracks. During the planting season, the U.S. Corn Belt experienced a cool, wet spring that delayed planting. The summer months offered excellent pollination conditions, which set the stage for high yields, while the harvest season brought cool average temperatures along with extreme moisture in many areas, which slowed the dry-down of the corn and delayed harvest in U.S. Corn Belt.

According to the report, the 2014 corn crop is entering the marketing channels with the following key characteristics:

  • average test weight well above the limit for No. 1 grade corn, indicating overall good quality.
  • low levels of broken corn and foreign material, with 96.2 percent below the limit for No. 1 grade corn.
  • 100 percent of sampled corn testing below the Food and Drug Administration (FDA) aflatoxin action level of 20 parts per billion.
  • slightly lower moisture content than in 2013, as was the incidence of stress cracks. However, total damage levels were significantly higher, likely due to weather conditions, though 94 percent of samples were still below the limit for No. 2 corn.
  • protein concentration lower than in 2013, likely due to higher yields in 2014.
  • comparable starch concentration to 2013, indicating relatively good kernel filling and maturation.

The report is based on 629 yellow commodity corn samples taken from defined areas within 12 of the top corn-producing and exporting states, including Indiana, Illinois, Iowa, Kansas, Kentucky, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota and Wisconsin.

The Council has chronicled these growing conditions in its U.S. corn production video available online.

The video examines the crop quality and growing conditions of U.S. corn producers located in Illinois, Nebraska, Kansas and Ohio.

The Council will publish a second report, the Corn Export Cargo Quality Report, assessing the quality at the point of loading for international shipment, in March 2015.

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Governor Daugaard Announces Rail Investments

South Dakota Governor Dennis Daugaard announced Tuesday that a total of $56 million in public and private funds will be invested in four rail projects across the state. Because of these investments, a new $40 million grain handling facility in Britton and a $40 million grain shuttle loading facility in Kennebec will be opened.

SD Governor

The first project is the reconstruction of the Mitchell to Rapid City (MRC) Rail Line. The $29.9 million project between Chamberlain and Presho will upgrade 42.6 miles of rail line to handle modern rail traffic.

The second project is an agreement with the Rapid City, Pierre and Eastern Railroad (RCP&E) to construct two new railroad sidings along the old DM&E line.

For the third project, the state will partner with Dakota & Iowa Railroad to invest $7.3 million to upgrade the Sioux Valley Line in southeast South Dakota. The project will include upgrading nine bridges on the line, which will allow the line to handle 286,000-pound rail cars. In addition, a section of track that is currently in an area subject to landslides will be moved.

The last project, an upgrade of the Britton Line in northeast South Dakota, will include $5.25 million in funds from the Dakota Missouri Valley & Western, as well as $5.25 million in loans from the state Rail Board and $1 million in Future Funds.

The Governor also announced that $4 million in Future Funds will be available to match other South Dakota rail investments made by private entities.

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