The long-standing plan to ship onions through the Treasure Valley Reload Center won’t work, according to a new analysis by a director on the project’s board. That puts into jeopardy a business plan issued in February that said the Nyssa center could serve the onion industry, cover its costs and finish construction without more public money. State officials relied on that plan to justify continuing to fund the project, which is years behind schedule and far over budget. Mike Walker, an Adrian farmer, serves on the board of the Malheur County Development Corp., appointed in 2023. He had a sobering report for the board on Tuesday, Sept. 17: Trucking onions out of Malheur County is more cost effective than putting them on a train. The case for the reload center for seven years has been that onion shippers would reach more markets at lower cost by using train service out of Nyssa. Walker helped write a business plan that seemed good news for the project. The plan calculated the reload center would ship 66% less train carloads of onions than originally planned. Still, according to projections, the reload center would operate profitably. That no longer appears to be the case. Walker told his colleagues that “transloading onions just doesn’t work” “It’s marginal right now with the way freight rates are,” he said. He shared the conclusion after yet another round of analyzing shipping costs to move onions by either truck or train out of Malheur County. Walker, Malheur County Economic Development Director Taylor Rembowski and board members Jason Pearson and Kay Riley, worked in recent weeks gathering information regarding whether significant cost-savings were possible through transloading onions from Nyssa. In an interview after the board session, Walker said he was “disappointed” the numbers didn’t justify transloading onions from Nyssa. “The bottom line was either a reefer truck out of Nyssa was cheaper than what we could transload for. Or the numbers were close enough it wouldn’t be attractive to customers,” said Walker. Walker said the business plan hinged on transloading onions being 20% cheaper than a truck “to be acceptable by customers.” “Basically, the data doesn’t indicate that to be true,” he said. Despite Walker’s news, several board members said during the meeting they were not “ready to throw in the towel.” Grant Kitamura, the president of the development corporation and an executive with Baker & Murakami Produce Company in Ontario, said the board now must “evaluate those rates again.” “Rates ebb and flow, they always have. We have to check some of the sources of rates, brokers back east, things of that nature,” he said. Kitamura said intangibles must be considered regarding Walker’s business analysis. He said the analysis may not make sense now, but it could in the future. That’s because, he said, the volume of onions produced in the county has been down during the past three years. “With that, there is less demand for trucks. Because of that, there is more transportation available, or appears to be. But not if we go back to our normal volume of onions. We have to take everything into consideration before we decide what is feasible or not,” he said. Kitamura said he foresees the volume of onions produced in the county to climb in the future as farmers plant more of acres of the vegetable. “When that volume comes back, you know what will happen then? We will be short of trucks again. Then all of sudden the rates are high,” he said. He said without the reload center, “we may not increase our acreage and may not have the volume.” Federal data from the U.S. Department of Agriculture showed acreage in onions in Malheur County dropped from 13,480 in 2017 to 10,030 in 2022. Kitamura didn’t dispute Walker’s conclusions. “I accept it and I’m not arguing with what he did. Mike is the messenger and he put the numbers in and that is what came out,” he said. However, Kitamura said Walker’s numbers were “based on the current situation.”“I’m not throwing in the towel on this. It is not guaranteed you’ll make money every year. There is a risk in business,” he said. Kitamura said once the reload center is “established, it should not go under.” Walker said he believes there are other avenues the board can take to still make the reload center viable. “I don’t think onions are completely in the grave. The idea I brought up is let’s put a rail gantry crane out there and a container forklift and use it to load out containers,” said Walker. Kitamura said loading containers is “very feasible” at the facility. “A container company can bring in their own crane and all you need is a (concrete) slab,” he said. Project leaders in the early planning had considered a container operation for Nyssa but dropped that concept. The original purpose of the reload center was to have onion producers truck their onions to the facility for loading onto rail cars for shipment to destinations in the Midwest and East. The project, though, faced cost overruns and missed construction deadlines for years. Some $30 million in public money has already been spent on the project that sits idle north of Nyssa. In February, developers of the beleaguered project pledged no more public money would be spent but since then the state has released an additional $200,000. Shawna Peterson, MCDC executive director, said the state Transportation Department recently approved $100,000 request to finish connecting the Nyssa industrial property to the Union Pacific Railroad mainline. In an email on Thursday, Sept. 19, Peterson said the tie-ins to the mainline were completed on “on schedule” Wednesday, Sept. 18 but more rail line work is needed. She told the board it would be about two more weeks for Union Pacific to complete its work. She also told the board that a supplier was out of rock needed for the work. State officials in 2023 froze funding for the project, insisting that development corporation establish that going ahead made business sense, that there was a plan for raising up to $10 million still needed, and to ensure an experienced shipping company would operate the Nyssa facility. The state later accepted the business plan that now is in question. Meanwhile, MCDC officials are awaiting a $15,000 report from Commtrex, a Texas rail logistics company. It was retained to assess the feasibility of shipping onions to several Mid-West cities that would then be moved to trucks. The report was due Aug. 1 and Peterson said a month later she expected the report any day. She said Tuesday that information is “critical” to planning what to do with the reload center. In a Wednesday, Sept. 18 email, Peterson said Commtrex had not explained why the report is delayed. She said she believed it was “workflow.” She said there has been a “a lot of back and forth” with Union Pacific and other “information sources that take time.” Peterson also said the funds to procure the report were only approved in June which did not “make it easy” for Commtrex to fit the project into its schedule. Martin Lew, chief executive of Commtrex did not immediately respond to a request for comment. She said the success of the reload center depends on rail and trucking at rates to provide “significant savings” for onion shippers. Peterson said she was “pleased” the corporation was getting hard data to inform the project’s direction. Peterson said the next step for MCDC remains to gather the necessary data to determine the viability of the rail center with more certainty. “We must have a viable business case to proceed,” Peterson said. “That is necessary for several reasons: logically for a project to be worth pursuing, for ODOT approval to move forward, and for potential borrowing.” STORY TIP OR IDEA? Send an email to Salem Reporter’s news team: [email protected]. A MOMENT MORE, PLEASE– If you found this story useful, consider subscribing to Salem Reporter if you don’t already. Work such as this, done by local professionals, depends on community support from subscribers. Please take a moment and sign up now – easy and secure: SUBSCRIBE. The post AROUND OREGON: Analysis finds shipping onions out of Nyssa rail center won’t work appeared first on Salem Reporter.