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Intermodal facility, cold storage could benefit ag shippers

By: Sean Ellis
Published in Blog on  August 30, 2019

By Sean Ellis

Idaho Farm Bureau Federation

SUN VALLEY – A proposed intermodal facility and a complimentary 280,000-square-foot cold storage project in Pocatello could be a big benefit to the state’s agricultural community if they come to fruition.

That was one of the main topics discussed during the Idaho Grower Shippers Association’s 91st Annual Convention, the Idaho potato industry’s premiere event.

IGSA serves growers and shippers of the state’s famous potatoes and the annual convention Aug. 28-30 attracted hundreds of people involved in the industry.  

The convention included updates on the intermodal facility and cold storage project, which are separate but would both be located at the Pocatello airport and compliment each other.

Both would focus on the state’s agricultural industry.

The intermodal facility could potentially help reduce transportation costs for ag shippers and provide them a way to get their products to market quicker.

The cold storage project could help ag shippers better leverage what they are already doing, said Kenneth Brown, a managing partner in LionChase Holdings, which is proposing that project.

The cold storage facility could enable shippers to add value to their existing products by providing services such as light processing, flash freezing, packaging and pathogen detection, he said.

“In other words, it would give you something else you can offer your customers,” Brown said.

Brown said good progress has been made on that project and it could be built in about once months once some final details are wrapped up.

“We’re working on a few more things to happen and then it (would go) up right away,” he said. “We’re very excited about it moving forward.”

The intermodal facility is still in the economic feasibility stages but “it has gained some real momentum as we talk more about it,” said Brig Skoy of Savage, which is proposing that project.

He said his company has been in talks with people who represent several farm commodities, including potatoes, hay, dry beans and dairy.

An intermodal facility is where shipping containers are switched from truck to train or vice versa. The current nearest intermodal facility to East Idaho is located in Salt Lake City.

Having an intermodal facility in Pocatello would enable shippers in the region to reduce transportation costs as well as help them get their product to market quicker.

The proposed intermodal facility would service shippers in a 150-mile radius around Pocatello, including as far away as Twin Falls, Rexburg and even northern Utah.

“We’re excited about the possibility of participating in this facility,” Skoy said.  “We recognize the value it (would bring) to shippers in Idaho and it could attract new business as well.”

The projects are being supported by IGSA as well as the Idaho Potato Commission.

During the convention, University of Idaho Economist Joe Guenthner shared the highlights of his updated study that shows Idaho is the best low-cost alternative for a new frozen potato processing plant.

The study, commissioned by the IPC, analyzed production, transportation and other costs for a model frozen potato product processing plant in five U.S. states and three sites in Canada.

That model plant would produce 370,000 tons of product per year and Guenthner factored in such costs as plant construction, labor, raw product, energy, packaging and transportation.

His study looked at the total cost of delivering frozen potato products to the 21 biggest markets in the United States, four in Canada and four in other nations.

It found that a plant in Idaho could deliver that product the cheapest to 24 of those locations, a plant in Washington would be the cheapest alternative in four locations and a plant in Alberta, Canada, would be the cheapest for one destination.

In summary, “A facility in Idaho could get product into 24 of those locations cheaper than any of the other states or Canadian sites,” Guenthner said.

“It shows that it’s cheaper to build a processing plant in Idaho and it’s cheaper to process the potatoes in Idaho and even when you include the transportation costs, Idaho is the bargain,” he said.

IPC President and CEO Frank Muir said the study “has been very positively received” by major potato processors.

“We’ve always believed that Idaho is the best place to build the next frozen potato processing plant but we needed to see the facts that support that,” he said. “Dr. Guenthner’s study verifies what we thought was true.”

During a separate presentation, Muir told convention participants that the potato commission’s extensive marketing and promotion efforts would continue during the next year.

The IPC spends millions of dollars each year promoting the Idaho potato brand around the nation and world. Muir told Idaho Farm Bureau Federation later it’s extremely important to keep Idaho’s famous potatoes at the forefront of consumers’ minds.

The IPC’s consumer research shows the commission’s promotion efforts are helping accomplish that, he said.

“When you ask people where the best potatoes come from, 90 percent say ‘Idaho,’” Muir said.

Beth Bouza, senior director of food and refrigerated sales for Union Pacific Railroad, told convention participants the railroad has made an an enormous effort rethinking and reworking its network and Idaho potato shippers can expect upgraded service from UP this harvest season.

“This upcoming season, you will see more consistent, reliable service from us,” she said.

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