449 



0. Storoge 



Although there are proposals to subsidize construction of grain storage at 

 the Port of Portland to allow prefwsitioning of grain from the lower Snake River, 

 there are also serious concerns whether building storage for such a limited 

 purpose would be economically rational or efficient. It is also unclear what 

 effect such subsidized storage would have on the market for storage services 

 during the non-drawdown months. There is ample storage in the country 

 elevators presently, but the geographical distribution is unbalanced. Careful 

 study of the magnitude, location and need for any proposed storage facility is 

 critical. Broad interest in a barge facility on the Columbia River below the 

 confluence with the Snake River is evident. 



b. RoilfOOd COR 



Because the lack of railcars is often cited as a obstacle to shifting grain 

 shipments to that mode, some have advocated subsidized purchase of cars as 

 a mitigation measure. If shippers choose to lay out of the market during the 

 drawdown, subsidized purchase of cars would not make sense. Funher, if 

 congestion at the terminal ports causes an embargo by the railroads, such as 

 occurred in October, 1991, then extra car capacity is redundant. In any 

 case, buying railroad cars to serve only a seasonal need would be an 

 expensive proposition. 



c. Cor looding focility 



1 he inland producing areas served by the Snake River already have multiple 

 car loading facilities, some as close as 33 miles to the river. Some of the elevators 

 on the river have expressed interest in relocating to inland locations or to the 

 Tri Cities if the drawdown period exceeds 2 months. Such a facility in the 

 river hinterland would add capacity, competition and marketing flexibility. 

 The recent terminal port embargo of rail shipments suggests that unloading 

 facilities may be as much of a problem as loading facilities. 



d. Informotion 



10 



A recurrent theme in discussions with marketing firms is a "need to know.' 

 Managers seek to reduce uncertainty as much as possible and that requires 

 information. Concerning river drawdown, they have stated, "We'll make 

 the best business decisions we can, but tell us the rules." Economists speak of 

 informed economic decisions as reducing market distortions. An investment 

 in detailed communication and information exchange between action agencies, 



