After dissolution, PGG members turn to alternatives
For the first time in 86 years, Eastern Oregon farmers won’t have Pendleton Grain Growers to market their wheat from this summer’s harvest.
Members of PGG voted to dissolve the co-op May 2, which means they’ll turn to other outlets for bids — which could include neighboring cooperatives.
Umatilla County leads the state in winter wheat production, with more than 11 million bushels harvested in 2015. PGG served 1,850 farmers in northeast Oregon and southeast Washington, operating 19 upcountry elevators and barge terminal along the Columbia River at McNary.
Those facilities appear likely to sell to United Grain Corporation, one of the Northwest’s top grain exporters with an operations base in Vancouver, Washington. Tony Flagg, the company’s vice president of business development, said he expects a deal with PGG by June. Harvest for dryland winter wheat typically begins in early July.
United Grain was formed in 1969 and is owned by the Mitsui Group of Japan. Flagg said the company has traditionally focused on exports, but has started shifting philosophies to work more directly with growers. That has included building shuttle train stations in Montana and North Dakota to haul larger amounts of grain from those fields to a Vancouver terminal that can store more than 7 million bushels.
John W. Adams, a former PGG member who farms roughly 3,500 acres north of Pendleton, said he will listen to offers from United Grain while continuing to do business with Northwest Grain Growers, based in Walla Walla, and Pendleton Flour Mills.
“We’re going to be just fine,” Adams said.
Northwest Grain Growers serves 1,600 members in the region and General Manager Chris Peha said they are growing. The co-op added two grain piles in Athena in 2014, which Adams said have become an attractive option. Peha did not say whether the co-op intends to invest more heavily in Oregon following the dissolution of PGG.
“We focus on our own business, not what other people are doing,” he said.
Adams said it’s always good for farmers to have more than one place to market their grain, though where they go depends heavily on their location. Gavilon Grain, another Japanese-owned firm, has also added piles in Athena in recent years, providing another choice on the north end of the county. Gavilon distributes more than 45 million tons of grain every year, making it the second-largest merchandiser in the country.
Elsewhere, Pendleton Flour Mills has also purchased wheat directly from farmers since the early 1900s. Its main flour mill is located in town, with a satellite elevator in nearby Mission. Then there’s Morrow County Grain Growers, headquartered in Lexington, which operates eight grain elevators with a licensed capacity for more than 3.9 million bushels.
Like PGG, Morrow County Grain Growers was established in 1930 and has grown to incorporate multiple divisions including energy, agronomy and its own farm equipment dealership. Grain comes to MCGG from as far away as Idaho, stored at the Hogue-Warner Elevator on Paterson Ferry Road.
