The Indiana Dairy Producers (IDP) organization has been following closely the development of the Green Express. Still under development, the Green Express is a dedicated nonstop rail service from Tampa, Fla., to the old Kingsbury ammunition depot south of LaPorte, Ind.
The original purpose of the dedicated line was to bring fresh fruits and vegetables from the Southeast as well as the Caribbean to the second largest U.S. market . . . Chicago. The Chicago-based Providence Logistics is the owner and developer of the logistics park that will operate the Green Express. The CSX rail company will provide the rail service.
The IDP organization representing Indiana's dairy producers believes this nonstop rail service could one day backhaul dairy products from America's Heartlands.
IDP first learned about this service in the summer of 2011. Now it is nearing fruition, and IDP hosted Chris McGrath, one of the principles of the Green Express organization, to share his insight at the recent IDP Partners In Success Luncheon on Friday, October 25.
McGrath explained that the train would leave Tampa, Fla., and arrive approximately 56 hours later in Kingsbury, Ind. That was slightly longer than it would take a truck to travel that distance, but the advantage lies in the fact that 100-car units could arrive with far less personnel. Secondly, trucks could then transport the containers the short distance to the end market.
McGrath shared that nearly 50 percent of the cost of a product at the final market is invested in transportation. He also shared that the reason train transportation has not been used for fresh foods in the past was due to product loss from delays involved with transportation.
However, today's container freight with dedicated nonstop delivery has eliminated that problem. Also, both refrigerated and nonrefrigerated containers will be available depending on the needs of the products being shipped. There could also be ISO tanks as part of the system. Those containers maintain cold temperatures for long periods.
As for products arriving from outside the U.S., McGrath noted that sealed containers could come from outside the U.S. and have their first-needed inspection at Kingsbury once USDA facilities can be arranged. Direct export containers could also be facilitated once that hurdle is completed.
The uniqueness of the Green Express is that all the containers must be returned to Tampa for reloading. That could provide an excellent opportunity for many products to be delivered at reasonable rates into the Tampa area as well as onto ocean-going freighters for the export market. With 17 percent of our U.S. dairy production going into exports in recent months, IDP sees the potential to have dairy products from the Heartland move into the export market at very reasonable rates. In fact, those rates may even compete with products leaving our Western U.S. ports. Additionally, with the enlargement of the Panama Canal well on its way to completion, movement from Tampa, Fla., could also reach the Pacific region as well as the Caribbean markets with products from the Heartland.
According to NMPF's October 2013 Dairy Data Highlights, nearly 35 percent of U.S. exports of yogurt moved into the Caribbean areas last year. Likewise, 44 percent of nonfat dry milk (NFDM) and 25 percent of whole milk powder (WMP) moved into Mexico. Mexico was also the destination for 38 percent of our exported fresh milk and cream and 25 percent of our exported cheese. These could all move through Tampa in containers via ships.
If we consider the Asian market, Tampa could also be a shipping point for the 78 percent of our exported whey, 57 percent of our lactose and 23 percent of our WMP that moves into the East Asia and China market. East Asia, South Korea and China also took 56 percent of our cheese exports last year.
The Kingsbury location has many dairy processing plants located within a five-hour driving distance. This allows trucks to deliver to the terminal and return the same day. Some I can mention would be the Michigan Milk Producers Association (MMPA) and the Continental plants in Michigan. Indiana has the Dairy Farmers of America (DFA) plant in Goshen, a Saputo cheese plant in Shipshewana and a Nestle plant in Anderson. Wisconsin also has many cheese operations. I'm sure there are many others.
This summer's rapid growth of dairy exports gives us all a glimpse of potential for the future. Our lower milk component prices and the soft U.S. dollar have the potential to take the U.S. to a much higher percentage of exports. For these same reasons, our dairy imports have been reduced dramatically. Putting pressure on our domestic sales with shorter supply because of exports should help boost domestic prices to dairy producers.
All-in-all, the Indiana Dairy Producers organization sees the Green Express as a potential win-win for the dairy industry.
The author is a Logansport, Ind., dairy farmer who is co-owner of River-View Farm. Forgey is also a board director for the Indiana Dairy Producers organization.
