In a letter sent to Greg Smith, Malheur County economic development director, Union Pacific HAS pledged to provide service for a proposed rail reload center north of Nyssa (The Enterprise/Pat Caldwell).
NYSSA – Union Pacific Railroad says it will ship onions from a proposed rail reload center in the county but won’t deliver express shipping, can’t provide rail cars and may not be able to ship commodities during peak times.
The railroad pledged its service to the proposed facility in a letter last week to Greg Smith, Malheur County economic development director.
The reload facility is the cornerstone of a local economic development blueprint to inject jobs into the county and bolster the $80 million onion industry.
The state pledged $26 million to build the facility and the county created a public company, the Malheur County Development Corp., to oversee the project.
The Oregon Transportation Commission was scheduled to decide on approving the Malheur County project this month, but has now postponed action until June to give Union Pacific more time.
While the Union Pacific letter from Eric Watkins, general director of economic and industrial development for the railroad, confirmed service, it also contained a number of conditions and limitations.
Chief among them was the railroad would not offer the faster service that it provides from its shipping center in Wallula, Wash. Instead, Union Pacific said it would ship onions on its regular – or manifest – network.
For more than a year, officials linked to the rail reload center promised service from the facility would be by an express route where onions could reach markets across the nation within a week.
Grant Kitamura, managing partner of the onion packer Baker & Murakami Produce Co., in a letter to the Malheur County Court, said the industry was counting on faster service.
“The transload facility will utilize an express train which would be more than twice as fast as regular service,” Kitamura wrote. He also is president of the development company board.
The impact of Union Pacific’s decision isn’t clear and Smith hasn’t responded to written questions about the matter.
The railroad also balked at providing assurances it would ship other commodities such as asparagus, sweet potatoes, apples, plums, hemp, mint oil and peppers.
“Asparagus, sweet potatoes, apples, plums, hemp, mint oil and peppers will need to be further reviewed and approved by UP Shipment Quality and UP’s Pricing team before UP can agree to transport those commodities,” Union Pacific said in its letter.
Idaho would be the only source of large amounts of commodities such as asparagus, sweet potatoes and peppers, according to data from the U.S. Department of Agriculture.
Malheur County does not have any significant crops of asparagus, peppers or sweet potatoes.
“There are a couple of farms in Idaho that are growing asparagus. On the Malheur side Froerer Farms at Owyhee Produce has been growing asparagus and sweet potatoes but I think they are the only ones that have any kind of sizeable stuff,” said Stuart Reitz, county extension agent.
Reitz said the sweet potatoes in the county are “in the tens of acres and something like 40 (acres) of asparagus, maybe not even that.”
The railroad company said only apples – which do not grow in commercial quantities in Malheur County – have a “viable rail option versus the remaining commodities provided.”
“Nobody, again, on the Malheur side has any commercial orchards left,” Reitz said.
Federal data shows nearly 2,000 acres of apple crops in Payette and Canyon counties.
The railroad also said it would not offer intermodal service to hay and straw commodities. That service typically involves containers destined for ports.
That change could mean Malheur County loses the chance to turn Nyssa into a hay shipping point.
Badger Ventures, based outside Burns, said in a letter to Malheur County officials last November that his company was interested in installing a hay press for processing alfalfa for Asian markets.
“The new facility at Nyssa would allow us to be able to press the hay, load the containers and place the container directly on rail,” the company said in its letter.
The railroad said it could not promise to provide rail cars to the facility.
“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,” the railroad wrote.
Union Pacific also said its service to the facility could be impacted during high-volume shipping periods.
“Seasonal onion volumes present UP with resource challenges that may affect service.
As with equipment supply, during high-volume seasons, UP must balance the service needs of all customers,” said the railroad.
The railroad also declined to commit to deliver commodities to specific destinations.
“Some of the destination locations and markets may not have direct rail service or historical transit times may not be competitive versus alternative transportation options.
Where direct rail service is not available, transload solutions will be necessary and will be an additional cost to the customer not including in the UP rail rates,” said Union Pacific.
Progress on the proposed reload center has gained momentum recently after planning stalled earlier in the year because state officials and their consultants questioned whether the project was feasible.
The state wanted answers from Malheur County Development Corp. regarding where the rail cars for the facility would come from, who would operate the facility and a firm commitment of service from Union Pacific.
In documents delivered to the state last month, the development corporation said it was in “tentative” talks with AmeriCold Logistics to run the facility and to find rail cars. AmeriCold Logistics said it is willing to ink a deal to operate the facility. However, the development corporation said until the state provides funding the “conversation is on hold.”
The development corporation also said it may explore leasing specialized rail cars needed at the center.
Progress in talks with AmeriCold Logistics LLC remain uncertain as development corporation officials would not comment. Smith has refused to comment to the Enterprise on any element of the facility.
News tip? Contact reporter Pat Caldwell: firstname.lastname@example.org or 541-473-3377.
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