Rural N.D. exporters fight for more market access

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BISMARCK — Miles of prairie and ocean separate North Dakota farms and the overseas markets for their products. While American exports are growing, some are worried that agriculture could be left behind in the boom.

“We’re going to see rural America evaporate,” said Bob Sinner, president of Sinner Bros. & Bresnahan, a Casselton grower and processor that relies on access to containerized transportation for its products. He has been frustrated for years by difficulty in getting shipping containers to carry his products overseas, but the situation has been exacerbated by the recession and changes in international trade.

“North Dakota is a huge net exporter,” he said. “We don’t import here.”

That is at the root of Sinner’s concerns.

Because it has a small population that produces a lot of agricultural products, North Dakota is likely to always export more than it imports. The problem is that exporters like Sinner need empty containers — the large metal boxes that are hauled on trucks and trains and loaded onto ships for overseas destinations — for his products. Empty containers are usually in the places where they arrive full of imports and exporters here pay a premium to bring them from urban hubs like Chicago or Minneapolis.

Since the beginning of the recession, American consumers have been buying few foreign-made goods and the weak dollar has helped boost the sale of American goods abroad. That means that fewer empty containers are available domestically, making it harder and more expensive for exporters here to get a hold of them.

“I felt that when the economy took a downturn it would help, but it’s actually worse,” said Mark Berwick, a researcher with the Upper Great Plains Transportation Institute in Fargo.

Sinner needs containers for his identity preserved exports, products with verifiable data on origin and organic and genetic status that fetch premium prices. He trucks containers back and forth between Casselton and Minneapolis, where he has access to the intermodal rail lines going to ocean ports.

Since the recession began, the ocean carriers have suffered from the decline in traffic that followed, and their rates have increased. Sinner said the cost of bringing containers, set by ocean carriers, through an intermodal rail facility in Dilworth, Minn., have made it cheaper to truck containers from the Twin Cities, which costs between $600 and $700 per container.

Containers there are provided on first-come, first-serve basis, and getting one can be unpredictable.

“All last summer we carried a warehouse full of product” waiting to be shipped, he said.

Rural exporters already have a difficult time accessing the rail lines that carry containerized products to ocean ports. Because the flow of goods mostly goes out of the state, it is tough to make an economic case for increasing intermodal access. An ongoing effort to bring access to Minot, which is on the intermodal line to Seattle, has been stalled. As long as few goods are coming into the state, it is hard to win the cooperation of the railroads and the ocean carriers to ease access to lines and containers.

“If all those things don’t line up, it’s not going to work,” Berwick said. “It becomes a Catch-22.”

The Federal Maritime Commission is conducting a fact-finding investigation on the issue of export capacity and is expected to announce findings soon. Sinner said more effort is needed on the federal level to get ocean and rail carriers to better accommodate rural exporters.

His company will open a soybean processing facility near the Twin Cities in September to better access the intermodal line.

“Our customers are fed up and we can’t keep up with them,” he said.

He said that the logistics of shipping force him to shift production near to urban areas, and that other rural exporters will be forced to make a similar decision unless they have better access to transportation.

“Everything is being priced into large metro areas,” Sinner said. “Don’t they have a responsibility to serve rural America? In my opinion, they do.”

Tags: north dakota, nd business, business, news, exports