Local onion producers hope a new rail reload center near Nyssa mean more markets and higher profits. (The Enterprise/Pat Caldwell)
ONTARIO – Local onion producers may be able to ship onions to more places around the country and generate higher profits if the right operator is picked to manage a rail reload facility north of Nyssa.
Grant Kitamura, president of the Malheur County Development Corp., the nonprofit entity created by the county to oversee the $26 million reload facility, confirmed last week that a commitment from a potential operator for the facility could open up a large swath of nationwide markets.
Negotiations, he said, are ongoing with a potential operator, though he declined to identify the firm. Other records have established that Americold, a national warehousing company, is in talks with the county.
Americold has previously declined to comment on the matter.
“Markets will expand with the proposed operating company. What it is offering could mean, and should mean, the whole east coast,” said Kitamura.
That, in turn, he said will mean greater savings for the onion industry that would benefit the local economy. Now the Treasure Valley onion industry relies on a combination of truck and rail service to ship about 490,000 tons of onions each year.
“It is not going to mean more onions (shipped) but it will mean a better rate for our customers and growers,” said Kitamura.
Kitamura said typically shipping rates by rail “fall right below a truck.”
Shipping costs, he said, whether by truck or rail, are extracted off the top of the profit generated by producers and packers.
A cheaper shipping rate by rail means more profit for local onion producers and packers.
Kitamura also said a new firm consisting of 15 local onion shippers – Treasure Valley Onion Shippers LLC – is crafting a study for Union Pacific that outlines potential destinations for their product. The members of Treasure Valley Onion Shippers, LLC, said Kitamura, represent “80 percent of the fresh volume” locally.
“The railroad is interested in talking turkey and want to know what our destinations are right now,” said Kitamura.
Kitamura and local onion industry executive Kay Riley – who both sit on the development company board – are also listed as members of the Treasure Valley Onion Shippers, LLC.
Kitamura said if a potential operator can “provide good services and speed and we can go to these different locations, Atlanta or Illinois. It opens everything wide up.”
The construction of the rail center and a commitment from an operator of the facility will be a “game changer” said Kitamura.
“It will open up the ability to get to our current markets in a more efficient and stable fashion. We deal with fluctuating transportation prices for trucks and this will stabilize that,” said Kitamura.
Kitamura, who is also the general manager and part owner of Baker & Murakami Produce Co. in Ontario, an onion packing firm, said that a potential challenge regarding rail car availability also may be solved.
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That’s because, he said, Union Pacific said in a recent meeting it could provide rail cars for the venture.
That is a reversal from the railroad’s previous stance nearly a year ago when it told officials it would not be able to provide rail cars or offer expedited service to national markets.
In a letter penned in May 2019, Union Pacific pledged to serve the rail facility but could not promise to furnish rail cars.
“During high-volume seasons, UP must balance the equipment needs of all customers and cannot make a commitment for the proposed location at this time,” UP wrote.
Kitamura said in a meeting two weeks ago, that all changed. At least for now.
“All along they said they don’t have enough equipment. Now, in our first conversation, they said, ‘You know, we think we have enough cars. We are turning them faster, we should have adequate to supply your service,’” said Kitamura.
Kitamura said the railroad’s new position is a relief.
“We won’t have to lease them and that’s a potential exposure off our back,” said Kitamura.
Have a news tip? Contact reporter Pat Caldwell at [email protected] or 541-473-3377.
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