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July 02, 2016
CRANE — Mark Owens is just trying to break even.
Alfalfa farming hasn’t gotten any easier in recent years: The price of hay has fallen; weather has been less than ideal; Harney County’s water supply is more limited than ever; and public resources are scarce, especially after a recent 41-day armed occupation of the Malheur National Wildlife Refuge drained county coffers.
On top of all that, Owens has a new problem. He can no longer ship hay to Portland, now that the last remaining trans-Pacific carrier at the Terminal 6 container port has left town. Instead, he has to send the hay to Ellensburg, Wash., or Winters, Calif., cutting profits 10 to 15 percent, or $10 to $15 a ton.
“It’s huge. … That 10 percent makes a big difference,” Owens said. He wonders whether agriculture will be sustainable enough for his two children to pursue one day.
Things gradually fell apart at the Port of Portland as a result of years of labor strife between the International Longshore and Warehouse Union and terminal operator ICTSI Oregon. It came to a head early last year, when container shipping company Hanjin Shipping announced it would pull out of Portland. The Port’s two other, smaller cargo carriers, Hapag-Lloyd and Westwood Shipping Lines, eventually made the same decision.
Oregon’s larger economy has for the most part weathered the loss of Portland’s container terminal. For some farmers in the Willamette Valley, there’s not even much of a difference in price to truck cargo to Seattle or Tacoma. But that’s no consolation to farmers like Owens in remote parts of the state. He has had to diversify his business, entering into the barley and pest-control markets, to make up for the tighter margins on his alfalfa-based hay.
“If you were strictly depending on shipping hay to the Port of Portland, you’d be in trouble,” Owens said.
Owens’ hay operation, encompassing more than 12,000 acres of land in sparsely populated Harney County, generates about $2 million a year in revenue, he said. The margins are thin, however, and he has about $1 million invested in the business in equipment alone. Losing the Port of Portland hasn’t required him to lay off any of his 11 employees, but Owens – who is also running for a spot on the Harney County Court this November – is trying to figure out how to cover the added costs.
“I’ve got to be careful on my year-end spending,” Owens said.
Owens has been talking to state Rep. Cliff Bentz (R-Ontario) about his struggles, and Bentz has lobbied for a solution at the Port. The lawmaker is now weighing the prospect of a new rail hub that could more efficiently bring goods from Ontario to both the East and West coasts. It’s not clear who would pay for it, though.
“There’s sure no doubt about the damage that they have done to us out here,” Bentz said, lamenting the loss of the container terminal. And even if a shipping line comes back, the Port has an image problem after of years of slowdowns and labor troubles, Bentz added.
“It has a reputation now of not getting anything done,” Bentz said.
Bill Wyatt, executive director at the Port of Portland, which leases the container terminal to ICTSI Oregon, said shipping companies like Hanjin “would love to come back.”
“But I know they won’t come back until they see visible evidence that the labor situation has been resolved,” Wyatt said.
In the meantime, it’s not just Harney County feeling the pinch.
Duane Olson, sales and warehouse manager at Northwest Onion Co., near the unincorporated community of Brooks northeast of Salem, said the loss of the Port has “definitely changed how we market our product.” He’s feeling the effects of competition more acutely now that he has to truck his onions to the Puget Sound area or to California rather than Portland.
“We have to pay so much more to get a product up to Seattle,” Olson said. It sometimes cost as low as $300 per container to ship to Portland, while the expense to go to Seattle can be as much as $1,080 per container, he said.
“I wonder if the successful run I’ve had is over with,” said Harney County alfalfa farmer Mark Owens.
“The logistics and everything just makes it tougher for us,” Olson said. “We had a pretty sweet deal with Portland.”
Other exporters have been less affected. Stu Follen of Portland-based SL Follen Co. ships hay and animal feed from Oregon to markets in Asia. Fluctuating shipping rates mean that for him, it’s sometimes no more expensive to send products by rail to Seattle or Tacoma than it would have been to ship out of Portland.
“It’s not as bad as everybody thinks it is,” Follen said.
Still, he asked rhetorically, “has it cost people money?”
“Of course,” he answered. “Everybody.” Commuters have been affected, as well, he added, because of the uptick in truck traffic.
Follen acknowledged that the situation is worse in farther-flung areas such as Harney and Malheur counties.
Out in one of those far-flung areas, Owens worries about his future in the hay industry.
“I wonder if the successful run I’ve had is over with,” he said.
Harney County is certainly no stranger to economic uncertainty. Once boasting one of the highest per-capita incomes in Oregon, the community of about 7,100 fell on hard times beginning in the 1980s as the timber industry declined because of federal regulations that limited harvests. Unemployment rose to 17 percent during the recession in 2009. The population is shrinking, too.
Such trends fueled the sentiment behind the anti-government occupation of the refuge.
Many Harney County residents disagreed with occupation leader Ammon Bundy’s tactics, but were glad he raised the issues surrounding federal land management in the rural West. Owens is not one of those people.
“I believe we live in the best country in the world, and I’m not ready for a revolution,” Owens said.
Still, he said it would be nice if rural Oregonians could catch a break now and then.
“Would I like to see more economic development in Harney County?” he asked. “Yes, I would.”
He hopes that if he’s elected to represent the county, he can help young farmers achieve the same success he has had. But casting a shadow over those opportunities are environmental concerns, globalization – and now the situation at the Port of Portland.
The Port would “be a great asset to us,” Owens said. “If it were working properly.”
— Luke Hammill