WASHINGTON, August 7, 2014 – It’s not your typical definition of hostage-taking, but some wheat growers are starting to feel like “captives” because USDA officials won’t inspect their harvest at a key northwestern port that serves as an export gateway to Asian markets.
“You would think there would be some urgency at USDA because of the potential ramifications on our prices, the basis and our country’s reputation as a reliable export supplier,” says Bing Von Bergen, a Montana wheat grower and former president of the National Association of Wheat Growers. “Instead we continue to be held hostage because of a labor dispute.”
“And this couldn’t happen at a worse time, when we are already behind on moving our products because of rail delays," Von Bergen told Agri-Pulse from his combine cab.
This Vancouver, Washington, labor dispute has been lingering since a lockout on Feb. 27, 2013, when United Grain and members of the International Longshore and Warehouse Union Local 4 argued over new contract negotiations. Both sides have been trading barbs about who is to blame for the standoff and there have been several service interruptions related to the lack of grain inspectors.
But the situation gained new urgency in early July, when the Washington State Department of Agriculture (WSDA) stated that it no longer would fulfill its obligation to provide official grain inspection and weighing services at the Port of Vancouver, which exports wheat, corn and soybeans. WSDA has the responsibility to provide official grain inspection and weighing services at the port under USDA’s Grain Inspection, Packers and Stockyards Administration (GIPSA).
Since that time, United Grain has only been able to load two ships, carrying about 3 million tons, out of 12 ships scheduled, thanks to being granted a waiver from inspection for those loads. But the terminal is scheduled to move 17 million bushels in August and there is no inspection service, or for that matter, rail delivery into the terminal, because the Burlington Northern Sante Fe (BNSF) railroad will not deliver until inspections resume, says Tony Flagg, vice president for business development with United Grain.
“Unfortunately, when our capacity is constrained and our costs and fees go up, the expense ultimately comes out of the farmers’ pockets,” notes Flagg.
The terminal handles between 30-35 percent of all wheat harvested in the Pacific Northwest and about 40-45 percent of all wheat headed for Japanese markets.
Last week, 22 national, regional and state agricultural producer, commodity and agribusiness organizations, including U.S. Wheat Associates and the National Association of Wheat Growers, urged USDA to take immediate action to restore official grain inspection and weighing services at the Port of Vancouver. To read the entire letter, click here.
The organizations also cited the “uncertainty” already created within the U.S. grain export industry, as well as among farmers and international buyers of U.S. commodities, regarding potential future disruptions of official services at facilities operating at other U.S. export ports.
“In the absence of WSDA’s reliable performance of its duties, FGIS must intervene and make the necessary arrangements to provide the mandatory official (inspection) services,” they emphasized.
Federal law prohibits the export of U.S. grains and oilseeds unless inspected and weighed by official personnel in accordance with the U.S. grain standards. In addition, such exports are required to be accompanied by official certificates showing the grade designation and certified weight, unless the requirement is waived by the Secretary of Agriculture and the grain is not sold or exported by grade.
According to an Aug. 4 letter obtained by the Oregonian, Edward Avalos, USDA’s under secretary for marketing and regulatory programs, denied the letter-writers' request, noting that USDA is “conditionally withholding official grain weighing and inspection services at this time” because it “does not believe that the situation at the Port of Vancouver would ensure safe access.”
A USDA spokesperson says the agency is still studying the issue to see if it is “safe” for inspectors to cross the picket line and “hopeful” that the agency’s third investigation into this issue will reveal whether or not inspections can resume.
“Meanwhile, federal grain inspectors continue to work at the Columbia Grain facility in Portland, Oregon, which is also subject to pickets by the longshoremen’s union,” the Oregonian reported.
Now, some farmers are also wondering if they are simply caught in the middle as officials try to apply pressure on United Grain to settle its labor dispute with the longshoremen.
“Safety is a concern, but USDA still has the legal responsibility to make sure exports are not disrupted,” adds Von Bergen. “Let United Grain and the longshoreman have their time to resolve their disputes.”
For its part, United has offered to pay for the costs of allowing USDA inspectors come into their facility via helicopter or on a company bus with trained security guards on board. But thus far, USDA has not accepted the firm’s offer.
In the meantime, United employees and service contractors have been able to make it safely to work every day – despite the dispute.
One unidentified man even came to work on his bicycle at the east gate of the Port of Vancouver yesterday, which is the designated gate for all UGC employees and service suppliers, according to this security video provided by United Grain. He works for the private grain inspection service NQI, which grades inbound grain.
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