443 



How would river drawdown affect the pattern of grain movement? Farmers 

 near the river and more distant farmers may react differently. Nearby farmers 

 have grown to depend almost exclusively on the truck-barge mode for marketing 

 their grain because it costs them significandy less than the alternatives such as 

 rail or truck. If the river is shut down for a period at the end of their market 

 year, these shippers will probably try to move their grain by barge before the 

 shutdown. They are not likely to shift to a higher-cost alternative mode because 

 that would sharply reduce their net returns. They are not likely to hold their 

 grain through the shutdown because they need to move it before the new crop 

 comes on the market and depresses the price. From the perspective of these 

 farmers, there might be very little long run effect from the shutdown. Farmers 

 and marketing firms might simply adjust to marketing on a 10-month basis. 

 From this perspective, alternative and expensive railroad and truck transportation 

 might be unnecessary if farmers near the river adjust rather than use more 

 expensive transponation. 



Farmers located more distant from the river have more choices. For many 

 of them, choice between truck-barge and train may be a maner of a few cents per 

 bushel. Those who presently use the river would face the choice of either moving 

 the grain earlier by barge or paying the marginally higher cost of moving it by 

 rail. For these swing areas, the cost of drawdown may range from almost nil to 

 5C cents per bushel - neither trivial nor really disastrous. Unlike watersheds 

 which remain fixed by topography, "grainsheds" which divide modes and routes 

 shift constandy in response to changes in shipping costs and market conditions. 



If some grain moves by an alternative mode during the 2-month drawdown, 

 it follows that some marketing and transport firms would have less volume over 

 which to spread their fixed cost. Thus the unit cost of shipping from the lower 

 Snake River ports would be increased for the entire year. However, even if all 

 of this grain were shipped during other months, with the total shipment volume 

 remaining unchanged, some small rise in unit costs might still occur because the 

 volume moves in 10 months rather than 12. 



There may be no panicular reason why the flow of grain from the lower 

 Snake River ports has to continue during these 2 months to satisfy grain demand 

 out of Portland. From 1987-89, only 21% of Portland grain shipments 

 originated at the lower Snake River ports (see Henry report, tables D7 and Dl 5). 

 The rest came from other river ports and via rail and truck. In fact, April-June 

 shipments from these origins is only 5.4% of total annual shipments from 

 Portland. Drawdown would probably result in an adjustment in the timing 

 of grain shipments from the various origins. Exports during the drawdown 

 might be met by shipments from sources other than the lower Snake River, 

 while shipments from these alternative sources would be cut back at other times 

 to allow the market to absorb the increased 10-month shipments from the lower 

 Snake River. Surveys by the authors show that many firms have elevators at 



