With harvest just around the corner, the port of Baltimore's only grain terminal remains disabled two months after part of its pier and conveyor belt system collapsed as a result of old age and deterioration.
The North Locust Point terminal's slow recovery means that Maryland farmers who ship their grain overseas will have to pay more to get their harvest to market in a year when commodity prices are already poor. It also means that, for the first time in an estimated 100 years, ships that haul grain will not call at Baltimore, further eroding a business that once accounted for almost one-fifth of the port's exports.
"It's very important business to us," said Judi Scioli, a spokeswoman for the Maryland Port Administration, which owns the dock that links to the privately owned grain terminal. "We look forward to the pier being repaired and keeping that business here in the port of Baltimore."
Scioli said the port exported more than 855,000 tons of grain last year. However, Archer Daniels Mid- land/Countrymark, which owns the grain elevator, put the figure higher, saying the terminal handled about 10,000 rail cars and 10,000 truckloads of grain last year, accounting for more than 1 million tons of soybeans alone.
"It's been a good business for us, and I think it has served the farmers in the area quite well, and we're going to find a way to continue to operate it," said Larry Cunningham, senior vice president of corporate affairs for ADM. The Decatur, Ill.-based agricultural giant is one of the world's largest processors of corn, wheat and other grains.
The pier collapsed after storms moved through the region June 30, crumpling a portion of the elevator's conveyor belt system. Until the structure is repaired, the company plans to bring soybeans to the terminal by truck and then load the grain onto rail cars destined for an unspecified port in the Southeast. Nobody knows how long the facility will be out of commission, though some estimate it could be closed to ships well into next year. That has farm leaders worried.
"It's going to have serious consequences to farmers here in Maryland," said Robert Hutchison, an Eastern Shore farmer and member of the Maryland Grain Producers Association.
While most of the grain grown in Maryland is used domestically by the poultry industry, a significant number of farmers in Central and Western Maryland count on the ADM elevator as a secondary market for soybeans. Because of their proximity to the market, farmers in the state enjoy a price advantage over Midwest farmers who must pay to ship their grain over longer distances to reach port. That advantage will likely vanish until the Baltimore terminal is repaired.
"That [shipping by train] is not nearly as efficient as putting it straight onto a boat right there," said John Saathoff, a Caroline County farmer and chairman of the Maryland Soybean Board. "It may be an alternative, but with the extra transportation costs [ADM] is going to have, they're going to have to pass that on and pay farmers less."
Repair of the elevator is complicated by the number of parties involved. ADM owns the elevator, but the port administration owns the pier. CSX Transportation Inc., the railroad whose tracks service the elevator, owns an easement to the property, ADM officials said. The three parties must agree on how to repair the damaged pier and whether the costs should be shared.
"We are in discussions with the port administration and CSX to come up with a plan we all can mutually agree on," Cunningham said.
Whether the port administration will share in the expense is unclear. The parties are still collecting estimates on the damage.
"It's first getting a realistic assessment of what it will cost and then working through how those costs should be allocated," Scioli said. " ... I think that the parties will look at this in good faith and come up with something equitable."
A CSX spokesman was uncertain what, if any, role the railroad will play in the process.
Many port observers said the aging grain terminal is overdue for renovation. The elevator was built by the Baltimore and Ohio Railroad in the early 1920s and was among a handful of such facilities once serving the port. Not much about the elevator has changed in decades, which may have contributed to its collapse, some said.
Though currently holding steady, the port's grain exports declined steadily during the 1970s and 1980s, as the business shifted to ports along the Mississippi River and the Gulf of Mexico. The ADM/Countrymark elevator became the port's last remaining grain terminal after Mississippi River Grain Inc. in Canton was sold to Omaha, Neb.-based ConAgra Inc. in 1994.