The President’s Column: A weekly feature provided by your parish Farm Bureau

By: Errol Domingues, VPFB President, Columnist
The Greater Baton Rouge Port Commission last week awarded Louis Dreyfus Commodities, LLC the lease to operate the grain elevator at the port. The vote was 14 to 0.

Last month Dreyfus, and current operator Cargill Inc., submitted proposals to the Port Commission to operate the facility. The long-awaited decision came after an economic impact study drafted by the LSU AgCenter was presented to port commission members. The study and the Dreyfus proposal both had the backing of Gov. Bobby Jindal, the LSU AgCenter and the state departments of economic development and agriculture and forestry.

The port commission made its decision Thursday, Feb. 24 at its regular monthly meeting. After two hours of debate, in which Cargill made a last-ditch effort to up its ante to continue to operate the facility, the commission voted unanimously to support the Dreyfus plan.

“The operation of the grain export facility by Dreyfus will provide the greatest economic benefit to the port, shippers, farmers and state as a whole,” said Dr. Mike Salassi, senior ag economist with the LSU AgCenter who conducted the economic impact study. “Under Dreyfus Louisiana farmers could see between $11 million and $33 million more for their grain.”

For the past decade, Louisiana grain farmers have seen a steady decline in the basis price Cargill sets for their grain. Area farmers have also criticized Cargill’s hours of operation, as well as farmers’ ability to unload their grain in a timely manner.

“This was a victory for Louisiana farmers,” said Ronnie Anderson, president of the Louisiana Farm Bureau. “There was no question in my mind, or in the minds of the farmers I spoke with, that the Dreyfus proposal was better. The governor’s office, in asking for the economic impact study, not only improved the economics of the farm economy, it improved the state’s overall economy as well.”

The Jindal administration, Louisiana Department of Agriculture and Forestry and Louisiana Department of Economic Development stood behind the Dreyfus proposal after the release of the study. The administration encouraged the port commission to carefully consider the proposal from Dreyfus before casting its vote.

“We’re very excited about Dreyfus,” said Jay Hardman, executive director of the Port of Greater Baton Rouge. “We know they’re ready to commit money to improving the elevator’s infrastructure. They want this to be their premier facility and we know they’re going to follow through on that commitment.”

The AgCenter study said the Dreyfus proposal would increase the price of grain farmers sell to the elevator by as much as 30-cents per bushel. The plan could be worth an extra $11.1 million to $33.3 million to Louisiana corn and soybean growers per year. In contrast, Cargill’s flat-rate proposal had no “put through” projections, according to Salassi. “So an increase could not be calculated,” he said.

Salassi said the biggest factor in the debate over who would operate the port was the fact that Dreyfus became a competitor in an essentially closed market. Cargill operate two other grain facilities along the Mississippi River in Louisiana .

“When you have competition, the consumer, in this case, the farmer wins,” Salassi told commission members. “Dreyfus knows it’s going to have to compete for the farmers business and with a $100 million investment, the farmers will be the beneficiaries of that competition.”

Dreyfus’ proposal provides for capital expenditures of up to $100 million over the initial lease term. The study said Dreyfus would invest between $5.28 million and $7.29 million per year. In contrast, Cargill would invest between $5.15 and $5.24 million per year. The projected total monetary investment to the grain facility at the Port of Greater Baton Rouge was estimated to be higher in the Dreyfus proposal.