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Superior for most of its commercial history have been iron ore, coal and grain. (There were four primary cargoes until the 1930s when forest products dropped into the "occasional" category.) Iron ore shipments are directly dependent on the health of the North American steel industry. One of the economic truisms of life in Northeastern Minnesota is that when the steelmakers cough, the Iron Range catches a cold. Coal, once inbound from the lower lakes, is now primarily
outbound from the Powder River Basin to public utilities and other
industri And then there’s grain. There’s no business quite like it in the Twin Ports. A trip to the Fond du Luth Casino cashier’s window is a walk in the park (or a stroll on the Lakewalk) compared with figuring out the grain trade. Consider the past year: n The Wizard of Oz factor: The lion’s share of the West Coast grain trade goes into the tank when the Asian tigers lose their teeth and the bears maul the market, creating one of the worst mixed metaphors of all time ("Lions and tigers and bears, oh my!"). n The weak Asian market contributes to an oversupply of world grain, exacerbated by U.S. political/economic sanctions on some countries whose climate or terrain negates crop production but whose people have quaint customs like eating. n Grain prices for some key commodities hit all-time lows, creating another major farm crisis. Things are especially rough in the Red River Valley, this port’s primary production area. But unlike the 1980s, no one makes movies or popular songs about the farmers’ plight these days, and Congress, hung up by presidential hangups, diddles. n Many Red River Valley farmers, who have always raised some of the world’s best barley, durum and spring wheat, have switched to other crops because of an incredibly persistent plant disease that goes by the unlovely name of "scab." Thank goodness the marvels of genetic science make it possible to grow corn and soybeans farther north than ever before — but the wheat scab won’t go away. n The big railroads, after becoming governments unto themselves in the Age of Deregulation, cannot get their act together. Many grain truckers, forced out of business by the same railroads prior to the mergercide, wonder if they got out too soon. Grain piles up alongside country elevators in some parts of the nation. n Barge rates on the Mississippi are high, partly because of congestion in the Louisiana megaport chain that includes New Orleans, Baton Rouge and a place that just happens to be the largest tonnage port in North America (the Port of South Louisiana, based in LaPlace). So given a weak world market, low grain prices, major stress in the hinterland and all manner of other problems, Duluth-Superior must be struggling, too … right? No. Emphatically, no. As I write this, our exports are running well ahead of last year’s. Today, in fact, there are 11 grain vessels in port (eight oceangoing ships and three Canadian lakers) with another 18 (12 ocean-going, five Canadian and one U.S. laker) due in the next six days. How can this be? One thing we always seem to overlook is that even a flat world grain market is still a very big world grain market. Six billion people and their livestock consume tremendous amounts of bread, pasta, cereal, feedstuffs and other grain products. This year, ships are carrying a lot of imports into the Great Lakes, meaning many are chasing outbound cargo, even at low rates — because the only thing worse for a ship than a low rate is no freight. Thus when you put it all together — the West Coast down, barge rates up, a new harvest forcing grain out of the country (despite low prices), shippers skeptical about long-haul rail service, plenty of ships offering low rates out of here, excellent facilities here in Duluth-Superior — it starts to make some sense. But my suggestion is not to dwell on it. The grain trade will drive you nuts because just when you think you have an answer, somebody changes the question. I just realized where grain traders go when they retire. They become players at the casino because they like the predictability. |
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The Harbor
Line
al
users in the east. If there’s a high demand for electricity,
then business is good and coal shipments are robust.
