COLUMBIA SNAKE RIVER SYSTEM CLOSED FOR EXTENSIVE LOCK MAINTENANCE

The Pacific Northwest (PNW) will face river shipping disruptions as the USACE shutters the Columbia Snake River System (CSRS) until March 20, 2017, to improve and repair four major locks and dams. According to U.S. Wheat Associates (USW), that river system is a vital transportation link for wheat producers in the states of Idaho, Montana, Oregon and Washington. The economies of these four states rely heavily on the commerce that flows up and down this system. The CSRS is the No. 1 U.S. wheat-export gateway. The deep draft channel supports 46 million tons of cargo each year, valued at $20 billion. The inland system supports more than 9 million tons of cargo."Such extended closures are unusual but, as our overseas customers learned during the last extended closure in 2010/11, the entire PNW system is fully capable of ensuring an uninterrupted supply of wheat to export terminals," said U.S. Wheat Associates."USW believes the industry will consider every logistical option to keep wheat, especially soft white (SW) wheat, flowing to export elevators. Significant changes will help make this closure more manageable. For example, total export terminal storage capacity on the Columbia River has grown substantially since 2011. The addition of an entirely new terminal, plus the construction of new storage at several others, has increased storage capacity from 564,000 metric tons to 866,000 mt today. The PNW's total up-country grain storage capacity has also grown to 17.3 million metric tons from 16.4 mmt."A PNW exporter told DTN that exporters prepared for the closure by bringing in loaded barges from the CSRS to their facility and storing them on the water. Buyers prepared for the three-month closure by buying more wheat ahead of the closure and then will load up again when the river reopens in March. The exporter said that there are three very capable rail shuttle shippers now in Washington, and many other rail loaders that can ship from Oregon, Idaho and Washington.Another PNW exporter said in an interview that the closure may hurt exports a little, and said that South America may be one spot where they lose a little business. Most buyers are going to buy soft white wheat no matter what, but a small majority are price sensitive. The shuttle shippers were trying to add a big premium during the closure, but the futures rally late October caused the premium to drop. SW wheat has already been at a big premium due to the farmer's financial position and ability to store, he added.The extended lock outage plan is a coordinated effort between Portland and Walla Walla districts, whose goal is to prioritize needed lock repairs along the Columbia and Snake rivers to minimize the impact lock closures have on river users, according to USW.