- In Success Stories
- Posted Jan 30 2017
PNW is agricultural exports ‘powerhouse’
Q&A with Peter Friedmann, Agriculture Transportation Coalition executive director
The Northwest Seaport Alliance (NWSA): What is your objective for the Agriculture Transportation Coalition (AgTC)/U.S. Department of Agriculture (USDA) Ag Shipper Workshop?
Peter Friedmann (PF): This AgTC/USDA Ag Shipper Workshop is one of seven that we host around the country every year. Held jointly with the USDA, the workshop provides a means in which agriculture, forest products and other commodities exporters can be competitive in the global marketplace.
At this workshop in Tacoma, we’ll have 100 exporters from a wide range of agricultural products like hay, apples, cotton and lumber. Every one of them fights with foreign producers for market share in countries like Japan, China and Korea.
NWSA: Why is it important to remain competitive in this market share?
PF: It’s important because there is nothing that we produce in this country for global export that cannot be sourced somewhere else in the world. So the hay that comes from Washington state can also come from Australia, Canada, Argentina and other countries. For example, the hay produced in Washington state currently goes to Japan, Korea and China. But if our prices are too high; if we can’t deliver it affordably and dependably; if our transportation network isn’t efficient; if our ports aren’t functioning efficiently, then those consumers in Asia will say, “If we can’t get it affordably and dependably from the U.S. farmers, then we’ll go to other countries that source the same products.” So it’s a very competitive global market. Often times, the differentiating factor is how efficient our transportation network is, and if port authorities are not operating efficiently, then it kills the sale.
PF: The Pacific Northwest is one of the powerhouses for production of agriculture and forest products that are exported globally. Probably per capita, the Pacific Northwest is the strongest in the world in terms of volumes of exports. The AgTC was essentially founded in the Pacific Northwest, as well as California’s Central Valley, where so much of the global production of agriculture is based. In California, you have products like wine, grapes, cotton, citrus and rice. In Oregon and Washington, you have hay, apples, potatoes, fresh fruits, onions, lumber and logs. Those are all the entities that formed the AgTC 30 years ago.
NWSA: What do we need to consider for the future of trade?
PF: I think the future of trade – particularly for exports out of the Pacific Northwest – is more dependent on the high value of the dollar, which has become a major impediment to U.S. exports, making our products more expensive overseas. We also need to consider the weak markets in China with slower economy. Those factors probably have greater impact on our trade competitiveness than anything else. But right behind it is sort of our inefficiency of many of our ports in the U.S., relative to ports elsewhere. There is a reason cargo has migrated to Prince Rupert. It wasn’t because it’s such a pretty city. It’s only because people got better transportation efficiency going through there. So for that reason, the AgTC is always trying to work with every U.S. West Coast port, including The Northwest Seaport Alliance, to improve efficiency.
NWSA: What should the agricultural exporters pay attention to in 2017?
PF: The relative price of the dollar versus the global currency.
We are also concerned that the ports on both the East and West coasts may be entering a period of labor contract uncertainty and disruption. We do not want disruption at the ports because it forces foreign customers to go look elsewhere for the products they need.
The consolidation of ocean carriers, meaning also consolidation of marine terminals, is something that needs to happen as efficiently and quickly as possible. I think the ocean carriers, as they form alliances, are creating huge opportunities for greater efficiency on their part, but in the meantime causing tremendous disruption.
As I said, disruption means permanent loss of business for the U.S. exporters. For the products we export, the cows in Asia don’t care what brand the hay is. Particularly for the Pacific Northwest, we need frequent sailings. A big ship that goes once every three weeks is not as helpful as four smaller ships that go every week. We’re going to have to adjust, but the ocean carriers need to understand that they’ve got to minimize the disruptions that these big ships and alliances are causing.