Mike Hand is scouting one of his fields of soft white winter wheat nestled in the rolling hills near Walla Walla, Wash., with Chris Peha, general manager of Northwest Grain Growers (NWGG). It’s time to discuss the marketing plan for the crop they agree could top 100 bushels per acre.
Hand produces 600,000 to 700,000 bushels of soft white wheat annually, marketing all of it through Northwest Grain Growers. The cooperative annually sources nearly 40 million bushels of wheat – soft white, hard red winter and hard red spring – from 2,200 farmer-owners. Nearly all the wheat is exported, half by CHS.
It doesn’t take long for Hand and Peha to delve into one of the hottest topics in the region: the possible removal of four dams on the lower Snake River in eastern Washington. Farmers and cooperatives in the Pacific Northwest (PNW) rely on the Snake River, which flows into the Columbia River, to move grain by barge to export facilities on the West Coast. The four sets of locks and dams allow barges to navigate the river.
Dam removal, Hand and Peha say, would have a devastating ripple effect on agriculture and communities.
“We didn’t think there was any way this could happen, but the push to remove the dams is gaining traction,” Hand says.
Chris Peha, left, general manager of Northwest Grain Growers, and Mike Hand estimate yield potential of Hand’s soft white wheat crop near Walla Walla, Wash.
Dam impact
The U.S. Army Corps of Engineers built the dams between 1955 and 1975 to provide safe, efficient river navigation; clean, renewable hydropower; irrigation; and recreation opportunities. The dams generate enough electricity to power 540,000 homes, according to the Corps. But the dams have also contributed to a drop in salmon and steelhead populations in the Columbia River Basin, which includes the Snake River, according to the National Oceanic and Atmospheric Administration National Marine Fisheries Service. This has occurred despite efforts to help fish migrate from the ocean upstream to spawn and back again, including constructing fish ladders at the dams.
A decades-old battle over whether to remove the dams to improve fish populations intensified in early 2024. A federal judge agreed to stay a National Wildlife Federation Endangered Species Act lawsuit over operation of the dams when federal, state and tribal officials signed a $1 billion agreement to fund fish restoration and clean energy projects and analyze alternatives to transportation, recreation and irrigation provided by the structures. The agreement, which may pave the way for dam removal, will keep the structures in place for at least five and possibly 10 years to allow implementation of the initiative.
If the dams are breached, which would take an act of Congress, Hand says he fears that “It would end wheat farming in the region as we know it.” Peha agrees. He describes grain transportation as a three-legged stool: truck, rail and barge. If one is removed, the system will collapse.
Barge benefits
Barge is by far the most efficient, reliable and economical way to transport large amounts of grain long distances, Peha says. A four-barge tow on the Snake River carries 490,000 bushels of wheat (122,500 bushels per barge, although some are larger), according to the Pacific Northwest Waterways Association (PNWA). That’s equivalent to 1½ 100-car unit trains and more than 580 trucks.
Peha says NWGG’s infrastructure, like other co-ops in the area, was built to accommodate barges as the primary mode of grain transportation. A 2022 study on the pros and cons of breaching the dams commissioned by the state of Washington found barge rates average 30 cents to 45 cents per bushel of wheat versus 50 cents to 75 cents per bushel for transport by rail.
NWGG has four barge-loading facilities and one shuttle-train terminal. Its 35 country elevators truck grain destined for export to barge terminals. If barge access were eliminated, Peha says hundreds of millions of dollars would need to be invested in new grain facilities, rail and trucks, and the region’s hills and rock cliffs limit where shuttle train terminals and rail lines could be built.
Peha estimates grain transportation costs to export terminals would jump by $1 per bushel or more if growers and cooperatives were required to rely on truck and rail alone to move grain to the coast. That would be reflected in lower bids to farmers.
“Without barges, crops will be worth significantly less, resulting in devaluing of farmland,” Peha explains. “It would have a negative cascading effect, with less tax revenue collected, which means less money for emergency services and schools.”
Community impact
Andrew Schafer, a producer board member of CHS SunBasin Growers based in Quincy, Wash., produces soft white wheat seed near Pasco, Wash. His crop is trucked to a local seed processor, but that doesn’t lessen his concerns about the fate of the dams.
An environmental impact statement commissioned by several federal agencies, including the U.S. Army Corps of Engineers, indicates removing the dams and their hydroelectric power capability could increase electricity rates by up to 25%.
“There’s a push for clean energy, yet a great source of it would be eliminated [if the dams were removed], leading to higher electric rates from converting to other sources like wind and solar,” Schafer says. “There would be a lot more trucks hauling wheat, causing safety concerns and more wear and tear on roads and air pollution.
“There would be a tremendous amount of negative impact from removing the dams, not only locally, but nationwide.”
River value
CHS, an industry leader in wheat exports through the PNW, relies on the Snake and Columbia rivers to deliver grain to TEMCO grain terminals in Portland, Ore., and Tacoma and Kalama, Wash. TEMCO is a joint venture between CHS and Cargill.
The U.S. is projected to export 825 million bushels of wheat during the 2024–2025 marketing year, according to the U.S. Department of Agriculture. (USDA). The PNWA says more than 60% of U.S. wheat exports flow through PNW terminals. About 10% of total annual U.S. wheat exports are transported on the Snake River. The river system also transports large quantities of corn and soybeans.
“The rivers are lifelines to get crops to market,” says Chris Guess, CHS SunBasin Growers senior director of operations. The ag retail business unit loads 80 to 100 barges of wheat annually at facilities on the Columbia River in Kennewick, Wash., and on the Snake River near the Lower Monumental Lock and Dam. “Could you imagine trucking or railing all the wheat to ports on the coast? It would stress the system and truck and rail rates would skyrocket well beyond the PNW. U.S. wheat would be less competitive globally.”
About 185 million bushels of soft white wheat will be exported by the U.S. during the 2024–2025 marketing year, according to USDA. It’s the largest class of wheat CHS exports, says Ryan Boese, TEMCO lead wheat trader. Roughly two-thirds of all soft white wheat, predominantly grown in the PNW, arrives at PNW terminals via the river system.
Most importers want to load “grocery boats” with multiple classes of wheat, Boese says. About 75% of ships destined for export contain soft white wheat. Customers in Southeast Asia crave soft white wheat for its baking qualities to make pastries and cakes. Hard red winter wheat and hard red spring wheat are made into bread, noodles and other foods.
“Soft white wheat is the backbone of the PNW and the CHS wheat program. If we can’t get it to port efficiently and economically, buyers could turn elsewhere,” Boese says.
A two-barge tow enters the lock at the Ice Harbor Lock and Dam near Pasco, Wash.
Dam preservation efforts
The CHS government affairs team in Washington, D.C., and PNW cooperative leaders are advocating for a responsible solution to help the Snake River ecosystem while preserving the dams.
CHS is working with industry partners, such as the PNWA and commodity organizations, to demonstrate that river commerce and clean energy production are vital to agriculture and local residents.
“A coalition of support is growing,” says Will Stafford, a member of the CHS government affairs team. “In the past, it was viewed as a PNW issue and only members of Congress from that region knew about it.
“Since the authority and funding to breach the dams would be authorized by Congress, we’re talking with congressional members from Minnesota, Iowa and other states to explain how breaching the dams would affect their constituents.”
As cooperative owners, Hand and Schafer say they know their interests are represented. “I may not farm a lot of acres, but I know my voice is being heard,” Schafer adds.
Listen in for additional information about the Snake River in an Around the Table podcast.
Check out the full Summer 2024 C magazine with this article and more
