US prepares for bumper year of farm exports
If all goes as planned at the US Department of Agriculture (USDA), well-orchestrated budget cuts won't interfere with boosting farm exports. Part of the reason for optimism is that Secretary of Agriculture John Block and President Reagan's special trade representative, Bill Brock, are in Europe trying to reduce trade barriers affecting US exports. They hope to persuade the European Community to lower tariffs and lower its subsidies for products that compete with US exports. Such foreign action would help the US farmer -- and therefore the US economy as a whole -- without any cost to American taxpayers.
On the home front, the USDA seems determined to tackle the problem of transportation bottlenecks. Recalling the snarls that caused long delays and added cost to grain shipments during the 1973 surge in US agricultural exports, Deputy Secretary of Agriculture Richard Lyng said recently, "The increasing demand for our exports will involve new strains on the transportation system."
"Roads, bridges, interior waterways, railroads, terminals, docks, and harbors will all need attention if we are to be able to keep up with the demand for our farm products," he warned.
With world grain stockpiles at their lowest levels since 1976, overseas demand for US supplies is expected to set new records this year, well above the record $40.5 billion in agricultural exports last year. Increasing demand is expected whether or not the Soviet Union decides to forget the snub of the 16 -month grain embargo ended by President Reagan last month.
The Soviets may return to buying grain directly from the United States, and US officials are busy giving the Soviets every encouragement to return to the fold. But even if the Soviets divert long-term purchasing contracts to other countries, such as Argentina, Australia, and Canada (which announced May 25 a five-year, $5 billion grain sale agreement with the USSR), American farmers and exporters should benefit indirectly. This seems inevitable because American farmers now supply 84 percent of world soybean exports, 71 percent of world coarse grain exports, and 43 percent of world wheat exports.
The virtual certainty of a steady rise in overseas demand for US farm products has become a key factor in USDA planning. "The present administration is well aware," according to Mr. Lyng, "that transportation needs for the late ' 80s and into the '90s must be anticipated in advance."
One early budget-cutting move has shelved Carter administration plans to enlarge Lock and Dam 26 on the Mississippi River at Alton, Ill., above St. Louis. In the past, limited lock capacity at this point has caused long delays for grain-laden barges headed for the major export elevators on the Gulf Coast.Barge operators are bitter about any delay in removing the Lock and Dam 26 bottleneck and bitter about new user charges on the nation's waterways.
But such worries are not shared by James V. Springrose, president of Transportation Logistics Inc. and a former transportation expert with Cargill, the giant Minneapolis grain trading company.
Mr. Springrose notes that American farmers, shippers, and exporters all have learned important lessons since 1973.
Credited in the agribusiness community with inventing the concept of the 100 -car "unit train," Springrose says great efficiencies have grown out of the use of railroad unit trains loaded in a few hours at one elevator in the Midwest and then run nonstop to a single export elevator.
One sign of the change is obvious to farmers who have worried every year since 1973 about a shortage of railroad hopper cars. This year, long lines of giant hopper cars are sidetracked.
The unit-train concept, now well established on routes to all parts of the country, says Springrose, "has given us a proven capacity to ship substantially more grain than in the past."
New efficiencies on the railroads have forced new efficiencies throughout the grain-handling industry. Faced with stiffer competition on rates and delivery times, says Springrose, "the barge operators have found ways to operate more efficiently." And he adds that "the grain-handling facilities at port locations are considerably improved, both in terms of elevator space and handling capacity." Even several tragic export grain elevator explosions have added to export capacity by forcing modernization of facilities.
Increasing development of Pacific coast ports supplied by new unit trains running from Minnesota and the Dakotas also has helped remove bottlenecks by reducing pressure on Gulf Coast ports, says Springrose.