Long history and dramatic evolution
United Grain Corporation currently handles around 5.6 million metric tons of grain per year, giving it a 17% share of the Pacific Northwest export market. The company achieved this strong position by broadening the range of grains it handled from just wheat to wheat, corn and soybeans. This was a reaction to two trends. First, farmers in the region started growing corn and soybeans in addition to wheat. Second China emerged as a massive market for soybeans, going from importing just 1.1 million metric tons in 1996 to 95.5 million metric tons in 2017, making it the world’s biggest importer.
United Grain needed to equip itself to handle these two new grains. Starting in the early 2000s, it began acquiring collection facilities for them. These facilities consist of so-called country elevators-inland grain elevators for local storage-combined with shuttle terminals for grain train shuttles, trains made up of around 100 covered hopper cars to transport grain from the point of origin to the sea. The company now has 18 country elevators, with 12 in Oregon, four in Montana, and one each in North and South Dakota.
As part of its diversification drive, United Grain also expanded the capacity of its Vancouver export terminal by over one-third, from 160,000 to 220,000 metric tons, in 2012. The numbers show how dramatically things have changed in the years since: In 2013, United Grain exported 2.5 million metric tons of grain, with wheat accounting for 80% of that total by volume. In 2017, not only had total exports increased by 126%, but the makeup of those exports was more varied than before, with wheat’s share at 40%, corn’s at 25% and that of soybeans at 33%.
Where are these exports destined for? All of United Grain’s output goes to Asia, where it is sold via the sales network of parent company Mitsui & Co. The biggest markets are Japan (39% by volume), then China (26%), followed by the Philippines, Korea and Thailand (8% to 9% each) and finally Taiwan (3%). Wheat is sold for flour; corn is used either for animal feed or to make high-fructose corn syrup (a sweetener); soy is crushed for animal feed. As the emerging nations of Asia get richer, their populations can afford to switch to a more protein-intensive?i.e. meat-rich?diet. That is driving up demand for the corn and soybeans that go into animal feed.