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Cargill, Louis Dreyfus Combine Columbia River Assets

by Scott A. Yates
Capital Press, October 19, 2001

SPOKANE, Wash. -- Walt Neff sells 90 percent of his wheat to Cargill because of the company's aggressive pricing -- a situation he hopes will continue with the formation of a limited liability corporatioin linking the Columbia River facilities of Cargill and Louis Dreyfus.

The two companies will lease their facilities to CLD Pacific Grain LLC starting Nov. 1. For Cargill, that includes Terminal 4 and Irving Street export locatioins in Portland and six barge-loading facilities. Three of those are located in Oregon at The Dalles, Arlington and Boardman, two in Washington at Burbank and Pasco and one in Lewiston, Idaho. The deal does not include two export terminals run by the companies in the Puget Sound area.

Bryan Edwardson, director of public policy for Cargill, said there should be no noticeable change in the way the two companies deal with farmers. The LLC is intended to maximize collective assets.

"The LLC is simply going to be responsible for the actual logistics. Whatever bids (for grain) Louis Dreyfus and Cargill make as separate entities, they are going to go out in the marketplace and compete," he said. "I don't think it will be any different than it has always been with respect to actual bids for grain."

The hope in forming the LLC, Edwardson said, is that the Pacific Northwest becomes a more cost-effective export competitor, which should result in more sales.

Jonathan Schlueter, executive director of the Pacific Northwest Grain and Feed Association, said what was two memberships of the trade organization will become one as a result of the new operating group. He said CLD Pacific Grain will be located in the Coyne Tower in downtown Portland, which is owned by Louis Dreyfus.

A little less than three years ago, Cargill purchased Continental Grain Co.'s worldwide operations. In the Northwest that included barge-loading facilities in Lewiston and Pasco.

Schlueter also pointed out that joint ventures are becoming the norm in the grain business. In a mile-long stretch of the Columbia River near Pasco, he said, there's the barge-loading facility of United Harvest LLC, a joint venture between United Grain and Cenex Harvest States, and Tri Cities Grain, a joint venture of Northwest Grain Growers and Central Washington Grain Growers. Now there's the CLD Pacific Grain LLC facility.

Cargill spokesman Don Vogt said declining production and increased costs have challenged the company to provide value.

Arnie Schaufler, Louis Dreyfus Corp. vice president and regional manager, will become the general manager of the LLC. He said the two companies will continue to compete aggressively against each other for export business.

"At the same time, CLD Pacific Grain will be able to concentrate on providing service and marketing alternatives to our customers, which will increase our ability to add value to the country while better meeting the needs of foreign buyers," he said.

Neff, meanwhile, is witholding judgement.

"We will see what happens down the road, especially when we call around to see what the market is and who has the best price," he said.

Scott A. Yates, Capital Press Staff Writer
Cargill, Louis Dreyfus Combine Columbia River Assets
Capital Press, October 19, 2001

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