Schultz Bruce, Salassi, Michael
News Release Distributed 12/04/13
PORT ALLEN, La. – South Louisiana grain farmers are expected to benefit from the presence of a new tenant at the Port of Baton Rouge, according to LSU AgCenter economist Mike Salassi.
Salassi said having Louis Dreyfus Commodities as a new buyer in the area grain market is good for producers because of more competition.
“Being a new additional market player on the buyer’s side, the existence of Louis Dreyfus in the grain market should have a positive impact on producer prices, resulting from an increase in demand,” Salassi said. “With the facility expansion currently being completed, Louis Dreyfus has the goal of significantly increasing the throughput at the facility to load grain on large ships for direct export.”
The presence of Louis Dreyfus coincides with increased Louisiana grain production in the past few years, Salassi said. “Having local buyers with sufficient storage capacity to be able to easily handle these larger grain volumes is a tremendous advantage for growers in Louisiana.”
Although the facility is operational, much of the expansion is ongoing or in the planning stages for more than $150 million in improvements.
“We’ve got another year of construction for sure,” said David Bollich, commercial manager for Louis Dreyfus.
Bollich said that to build the new facilities, Louis Dreyfus had to shut down grain-handling operations after the 2011 harvest. Enough of the work was finished by late summer to receive and ship grain from this year’s harvest.
The work completed so far involves construction of a state-of-the-art elevator and conveyor system designed to get grain off barges and onto ships as quickly as possible, as well as a new dock.
Two new sets of grain elevators capable of holding more than 1 million bushels are completed, and construction was just completed on another group of bins.
Some of the old facility, which had been operated by the previous tenant, Cargill, was left in place. “Everything painted blue is old,” Bollich said.
The Baton Rouge Port Commission spent several million dollars renovating another set of large, older concrete bins.
Storage capacity is critical. Four large old steel grain bins remain in place, but they are terribly inefficient, taking days to unload 500,000 bushels. Grain stored in the cluster of six new bins, holding 70,000 bushels each, can be loaded onto a ship in less than an eight-hour day, Bollich said.
Building the concrete-and-steel bins required six days of around-the-clock work to build with nonstop concrete pouring. Before above-ground work began, 600 pilings, 120 feet long, had to be driven into the ground to make a sufficient foundation.
All the improvements were essential for the Port of Baton Rouge to remain a player in the grain export business, Bollich said. “You really couldn’t compete in the export market with a facility as obsolete as this one was.”
After reaching an agreement with the port, the company realized that a new dock would have to be installed at a cost of $30 million. More than 300 pilings, each 165 feet long, had to be driven into the riverbed to support the dock.
Bollich, who did marketing work for Louisiana Farm Bureau for 16 years before joining Louis Dreyfus, said the location at Mile 228 on the Mississippi River is a natural conduit for moving American grain to overseas markets. Farmers are able to truck their crop to the port. If they are farther up the river, they can load their grain onto barges to be moved downriver to the port.
“This is the geographic location to barge grain in this state,” Bollich said. “If we develop our export business here, that’s the best thing that could happen for the farmers.”
Farmers trucking their grain to the facility will be able to get better prices because barge transportation will be eliminated, Bollich said.
The facility’s rapid rate of loading grain will be important once the large Panamax ships, with a capacity for roughly 1.3 million bushels of grain, start sailing to the port. The larger ships require as much as 50 feet of water depth, the current depth at Baton Rouge, so maintaining a dredged Mississippi River will be critical, “not only at the channel, but also where the ship is going to be at the dock,” Bollich said.
Being able to load an ocean-going vessel quickly makes shipping companies happy, and they are willing to pay a premium for rapid, problem-free loading.
Grain delivered by barge is weighed in the conveyor system after it is unloaded, and outgoing grain is weighed and graded by the U.S. Department of Agriculture before it is loaded onto ships at a total rate of 100,000 bushels.
“These are state-of-the-art loaders,” Bollich said. “The dust suppression is tremendous.”
In fact, little dust is found at the facility, thanks to a dust-collection system. Bollich said grain dust is kept and sold to feed companies.
The conveyor systems that move incoming grain from barges are separate from the system that transfers the outbound grain from bins to ships. Farmers who bring their grain to the facility won’t notice much of a change in the truck dumps yet, but improvements are planned, Bollich said.Bruce Schultz