Logistic Support Aids Midwest Soybean Producer In Selling Direct on the World Market

Based on strong export sales, primarily to China, the USDA raised its 2008/09 soybean export projection to 31,300 million metric tons (mmt) in its February 2009 World Agricultural Supply Demand Estimates (WASDE). Soybean exports are now projected to be 4.5 percent higher than the USDA January estimate and less than one percent lower than last year. This is good news for soybean producers such as Wayne Knewtson, a Minnesota farmer and marketer of grain products to world markets through his company, Knewtson Soy Products Company. Wayne gets his containers from North Star Container, LLC, and a lot of logistical support to make certain they reach their destinations safely.

 After going through third parties for many years to sell his grain on the world market, Wayne took the plunge in the late 90s into exploring going direct to buyers out the U.S. It was a financial decision that has both risks and rewards. The reward is being able to retain a greater margin of profit because he no longer has to share profits with the middleman. The risks are in finding the markets, being able as a small producer compared to the Fortune 500 agribusinesses in finding the resources needed to get his soybeans from Southern Minnesota to ports in China and Japan and other world markets.

 After many hours of due diligence and two trips to Japan to exhibit at trade conferences, Wayne got his first direct sale in 2002, earning a $1 or $2 more per bushel than he could have secured through a third party. He began exporting his soybeans in containers to ports in Japan. Getting to the right ports presented some challenges as the shipping lines available to him did not regularly visit some of the smaller ports where his products were destined.

 About two years ago, Wayne attended North Star Rail Intermodal’s open house at the newly opened NSTerminals transloading site in Montevideo, Minn., where he was re-acquainted with professionals now on North Star’s team who he had engaged at former companies to ship grain products. Because of his excellent service experience with this team, he began working with Bob Reinecke, president of North Star Container to access containers and arrange shipping to several Asian ports.

 “North Star has the relationships that enable my shipments to reach some of the smaller, more out of the way ports that I had challenges reaching,” says Wayne. “Because they have contracts with multiple shipping lines, they also get a good rate for me.”

  “North Star has professionals who are very experienced and know how to get things done,” say Wayne. “For example, when exporting products, documentation is always a concern. But, they get the paperwork to the port in time for my buyers to claim their freight.”

 In addition to his seed and soy products businesses, Wayne and his son also farm about 2,000 acres that provide a portion of the soybeans they export. They acquire the remainder from other soybeans producers in order to meet the growing needs of the markets both in and outside the U.S.

 Being able to have North Star Container as a cost-effective and reliable partner on the logistics side, allows the Knewtsons to continue to expand their agribusiness from the traditional family farm model to one of global provider of grain and grain products.