The Treasure Valley Reload Center in Nyssa, OR, envisioned as a hub for shipping onions, has encountered significant obstacles, according to a report from a Malheur County Development Corp. (MCDC) board director. This revelation challenges the feasibility of the center's business model, which had projected the facility could support the onion industry and be financially viable without additional public funding.
Mike Walker, an Adrian farmer and 2023 appointee to the MCDC board, presented a critical analysis indicating that trucking onions from Malheur County is more economical than rail transport. This assessment contradicts earlier projections that the reload center would lower shipping costs and expand market access for onion shippers by utilizing rail services.
Despite the center planning to ship 66% fewer train carloads of onions than initially expected, the business model had suggested profitability. However, Walker's analysis, based on recent freight rate comparisons, suggests that the cost advantages of transloading onions at Nyssa are insufficient to attract customers. He noted that transloading would need to be 20% cheaper than trucking to be considered viable, a target the current data does not support.
Grant Kitamura, president of the MCDC and executive at Baker & Murakami Produce Company, acknowledged the need to reassess shipping rates but remained optimistic about the center's potential. He highlighted the fluctuating nature of freight rates and suggested that the current downturn in onion production might be temporarily influencing transportation availability and costs. Kitamura anticipates a future increase in onion production could reverse the current trend, stressing the importance of the reload center for the industry's growth.
The MCDC is exploring alternative strategies to utilize the reload center effectively, including the potential for a container operation. The project has faced delays and budget overruns, with over $30 million in public funds invested to date. Despite these challenges, state officials have continued to support the project, with recent approvals for additional funding to connect the Nyssa facility to the Union Pacific Railroad mainline.
The MCDC awaits a critical report from Commtrex, a rail logistics firm, to assess the feasibility of shipping onions to Mid-West cities. This report is deemed essential for determining the project's future direction and establishing a viable business case for continued development and operation.
Source: Malheur Entreprise