Gateway Pacific could link grain belt to Asian markets

Asian demand for U.S. grain will soar in the years ahead, and U.S. farmers will need more West Coast port capacity to meet that demand.

That was a key theme Thursday, May 19, as grain producers and shippers gathered at the Silver Reef Hotel and Casino Pavilion to learn about SSA Marine's plans for the Gateway Pacific Terminal project at Cherry Point. SSA sponsored the event.

Although much of the local public debate about this deep-water bulk cargo shipping proposal has focused on the likelihood that it will handle mostly coal, SSA Marine's spokesmen have always insisted they want a multi-use facility, with grains a potential part of the customer base.

The discussion between SSA and the grain people provided some insights into the global economic forces that are driving the Gateway Pacific project.

Every billion dollars' worth of exports generates 8,500 U.S. jobs, according to Floyd Gaibler, director of trade policy for the U.S. Grain Council. Gaibler's statistics indicate that exports of corn alone could increase by $7 billion per year between now and 2015, the earliest possible date that Gateway Pacific could be up and running.

But growth in agricultural production will carry environmental costs.

When SSA Marine Vice President Bob Watters asked if U.S. grain producers could increase crop output enough to meet projected Asian demand, Gaibler and Lochiel Edwards, a Montana wheat grower, replied that it depends.

Gaibler said improved farming practices could boost yields, but genetically modified crops also could be part of the picture. He also noted that those crops face resistance from those who fear long-term environmental and health impacts from them.

Edwards, past president of the Montana Grain Growers Association, said wider use of genetically modified wheat could be especially important.

Genetic modification has already led to huge boosts in production of corn and soybeans, Edwards said, but wheat has lagged behind. As he tells it, that's because corn and soybeans have simpler DNA, and agricultural scientists were able to develop genetic modifications of those plants more quickly. Genetically modified corn and soybeans were brought into widespread use "before people were really paying attention."

Now, Edwards said, efforts to increase wheat yields with genetic modification are confronting more consumer resistance. But he believes that resistance will be overcome.

U.S. grain production also can be increased by reducing the amount of land now set aside for conservation purposes under the Conservation Reserve Program of the U.S. Department of Agriculture, Edwards said. That program provides an annual federal payment to farmers who take qualifying acreage out of production.

In Washington state, the program has helped preserve habitat for the sharp-tailed grouse, among other things.

Edwards said farmers were strong backers of the Conservation Reserve Program when it began in 1985. At that time, Edwards said, grain was in surplus and prices were low. Millions of acres eventually were set aside.

That is no longer the case today. Edwards said many farmers now find it more profitable to put their reserve acres back into grain production, and the main constituency for the program is what Edwards called "the hook-and-bullet crowd," meaning fishermen and hunters.

On Edwards' own farm, 640 acres that were in reserve last year are planted in hard red winter wheat today.

Also at Thursday's meeting, Whatcom County Executive Pete Kremen expressed guarded support for Gateway Pacific. But he warned that it will have to run a gantlet of public scrutiny during the permit process. He highlighted widespread concern about the impact of increased rail traffic to the port and said those concerns will need to be addressed.

U.S. Rep. Rick Larsen, D-Everett, came to renew his support for Gateway Pacific.

"I'd rather be exporting American coal and grain than American jobs," Larsen said. "This facility gives us the opportunity to do just that."