November 7, 2016

by Brooks Johnson
Duluth News Tribune

Ben Herstad watched wheat fill yet another cargo ship last week at the CHS terminal in Superior. It was a busy day. It’s been a busy year.

As a stevedore for Ceres Terminals, Herstad sees firsthand how well grain exports are going this year.

“It’s picking up a little over last year, and last year was a better year than the year before,” he said.

Herstad doesn’t have to count every grain to know that — reported tonnage this year is on track to outpace last year.

“It’s slow and steady increases over the last three years here,” he said. “I’m sure we’ll surpass 2015 easily.”

That’s good news for the port of Duluth-Superior, where overall shipments this year have been down more than 2 million tons to date and the iron ore trade is only now showing signs of recovery from the downturn.

“The upward trend is a rewarding story, this year in particular,” said Adele Yorde, spokeswoman for the Duluth Seaway Port Authority. “Trying to balance out those commodities means a lot more people are working — stevedores, longshoremen and the folks at the grain terminals themselves.”

In the grand scheme of shipping cargos, grain is just 10 percent of what moves in and out of the port, at least by weight. (It turns out taconite pellets are a little heavier than grain.) But just count all the grain elevators and silos and it’s easy to see why even a slight uptick can be reason for celebration.

Through September, more than 1 million tons of grain had moved through the Twin Ports (and plenty more has since, reports Herstad.) There was a 60,000 ton spike in September compared to 2015, helping push the year-to-date total 80,000 tons above last year’s rate — though October is typically a busy grain month in any year.

But with October’s traffic and boats still scheduled to receive grain yet this year, Herstad has good reason to think this year will beat the last.

Yet tracking why the trade is up, or how to keep it that way, is another question. Like anything in global trade, there are a lot of factors that could contribute to grain’s gains.

“It’s world politics and weather and freight rates for other things, demand for other ships and (crop) disease,” said shipping agent Stephen Sydow with Daniel’s Shipping Services Inc.

Sydow explained one of the biggest factors contributing to the Twin Ports’ grain exports is the import of anything else here. It isn’t often economical to bring an empty ship to pick up commodities like durum wheat.

“So if there’s no ships coming in to discharge heavy stuff like steel and coils and stuff like that then it’s expensive to ship things out,” Sydow said. “It essentially subsidizes what we export, grain.”

Take the oceangoing freighter Cornelia, for example. She’s been parked in the lake since arriving in port a few weeks ago with cement. With grain flowing as it has been out of the port, the ship’s owner appears to be waiting to strike a deal to carry out some grain rather than hunt for a shipment elsewhere.

“They think they can; they feel the highest probability is here, and it’s free to sit here and wait,” Sydow said. “It’s sitting out there waiting for a deal to be made — an excellent indication of how things are going.”

There must be demand for grain at a port somewhere, or why else wait? Yet that’s just one of dozens more factors going into why and when grain leaves the port.

“We don’t have any impact on freight decisions — those decisions are made outside the port,” Sydow said. “Just in general we hope (shipping prices) are low. “Low prices mean more business, and more business is better for us.”

Wheat is by far the dominant overseas and Canadian grain export from Duluth-Superior, followed by canola and beet pulp pellets. But wheat is an unlikely U.S. export, considering we produce just 8 percent of the world’s supply. Yet while our share of the world market has diminished since leading in the 1980s, exports have continued to rise steadily, and Lake Superior has a role in that.

“It was the movement of grain that made this port an international seaport and connects us to the global market,” Yorde said.

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