John Lindgren, export terminal director at United Grain, looks into a portion of a conveyor belt transporting grain from a ship into a storage containers at the Port of Vancouver. Nathan Howard/The Columbian Photo Gallery
John Lindgren shuffled up the sloping, covered walkway next to the Columbia River, a conveyer belt rumbling at his elbow.
Behind Lindgren, a rotating line of buckets dipped into a floating Shaver Transportation barge, scooping wheat onto the belt to be deposited into a towering riverside silo.
“So there are 7,200,000 pounds in this,” Lindgren bellowed, gesturing at the barge holding hard red winter wheat from the eastern fields of Washington and Oregon. “3,600 tons is how much is in this. And it will take us anywhere from four to six hours to unload.”
Lindgren is export terminal director for Vancouver-based United Grain Corp., where that wheat was being off-loaded. From his vantage point, winter wheat, corn and other farm products will keep things hopping at the terminal for the foreseeable future. Those commodities should fill most — and sometimes all — of the 230 silos on the sprawling leased Port of Vancouver property, awaiting cargo ships to haul them across the Pacific Ocean.
On the seventh floor of a downtown Vancouver office building, Augusto Bassanini and Gary Williams have a different perspective. Soybeans have commanded a lot of their attention lately.
“It looked to be one of our largest crops for soybeans,” said Williams, United Grain’s vice president of marketing and business development. “Everything was at the highest optimism you would have ahead of the trade dispute taking place.”
Take place it did. “The sooner we can find resolution,” said Bassanini, chief operating officer for United Grain, “the better we can resume trade and provide that economic benefit locally, regionally, nationally.”
But no one — not Bassanini, Williams nor Lindgren, nor it seems anyone in the governments of the United States or China — have an idea of when trade hostilities will ease.
United Grain, a subsidiary of Japanese conglomerate Mitsui & Co., operates the largest grain elevator on the West Coast. It has 100 local employees and facilities elsewhere across the West. The Vancouver grain terminal was built in 1935 and nearly doubled in capacity in 2011.
At first, United Grain officials had been hopeful that timing on the trade dispute would be in their favor.
The Trump administration in July enacted $34 billion in tariffs on Chinese products. Almost immediately, China announced tariffs of its own on American products, including a 25 percent tariff on soybeans. As a result, U.S. shipments of soybeans to China have come to a virtual halt and soybeans are piling up in storage at facilities in North Dakota and South Dakota — the states that ship the most soybeans out of United Grain’s Vancouver terminal — as well as in other soybean-growing states.
The soybean harvest in North Dakota and South Dakota typically begins in September and shipments would arrive in October at United Grain. With sanctions announced in July, perhaps that would be enough time for trade negotiators in the U.S. and China to work out a deal before this autumn.
In the meantime, the U.S. Department of Agriculture announced in July that $12 billion in aid would be provided for farmers adversely affected by tariffs.
The timing hasn’t worked out, however. Massive amounts of soybeans sit idle as farmers and shippers now hold out hope that a deal can be reached before February. That’s the month that typically marks the end of U.S. shipments of soybeans. Between February and October, other countries feed the world’s appetite for soybeans.
Bassanini and Williams are concerned about the short- and long-term implications of a prolonged stalemate affecting soybeans.
“We always hate to see food used as a trade tool or a bargaining instrument,” Williams said.
China, with the world’s second-largest economy, is by far the world’s largest importer of soybeans, The New York Times reported. The country consumed 110 million tons of soybeans in 2017, and nearly 90 percent of those beans were imported — the vast majority from either Brazil or the United States. And most of the U.S. soybeans sold to China are exported from West Coast ports — the closest U.S. ports to China.
Bassanini estimated that, until this season, the U.S. fed about half of China’s appetite for soybeans.
“And then the rest comes from South America, primarily Brazil and Argentina,” he said. “And keep in mind that the production in Brazil has continued to increase year-over-year.”
U.S. soybean export prices, meanwhile, have been on a downward trend since April. Also, Agriculture Secretary Sonny Perdue said in late October that a tariff-farmers aid package would not extend into 2019.
Editor’s note: This is part of an ongoing series of stories by The Columbian about the effect of tariffs on the Clark County economy.Watch for the next in the series in the Business section on Thanksgiving Day.
Bassanini and Williams, while confident trade agreements will eventually be reached between the U.S. and China, are concerned about longer-term effects. China will need to satisfy much of its soybeans appetite elsewhere this year. Will that diminish the future importance of U.S.-exported soybeans?
“It’s difficult to change everything back immediately and fully,” Williams said. “So we don’t know if there’s a long-term detriment …we’re certain that it won’t just switch back immediately in complete full force. But what does that mean for intermediate or long-term? I don’t think anyone is willing to put a forecast on that.”
