A joint venture formed by two regional farm cooperatives expects to start work shortly on a $17 million-plus, grain-handling terminal with a high-capacity railcar-loading system about 35 miles south of Spokane.

The facility is scheduled to begin operating by the 2013 harvest season, says Jackie Tee, a project manager brought on by the two co-ops, Cooperative Agricultural Producers Inc., of Rosalia, Wash., and Pacific Northwest Farmers Co-op, of Genesee, Idaho. Tee says the facility is expected to provide a more efficient and economical way to transport the wheat grown in Eastern Washington and North Idaho by rail to West Coast ports for export.

Called the McCoy Grain Terminal, the facility will be constructed along State Route 271, about 4 miles east of Rosalia, and will include room to store 1.3 million bushels of grain and enough industrial railroad track to accommodate the loading of a 110-car freight shuttle train, she says.

Bill Newbry, PNW Farmers Co-op CEO, says the two cooperatives arranged the project's financing through Northwest Farm Credit Services, the Spokane-based agricultural lender.

Newbry says the new terminal is a strategic move by the two co-ops to complement river barges used to move wheat to those same ports via the Columbia-Snake River System. Both co-ops also ship wheat via rail, he says, but the new facility will greatly enhance that ability.

"What this grain-handling terminal does is, it really doesn't replace anything; we're looking at different means of transportation to augment our river facilities," Newbry says. "We also feel that in the next five to seven years, there is going to be an increase in total wheat production in Northern Idaho and Eastern Washington."

Much of that increase is projected to come from acreages that are expected to return to wheat production after being under the federal Conservation Reserve Program, which pays farmers not to farm environmentally desirable land.

The voluntary program seeks to protect topsoil from erosion and to safeguard the nation's natural resources. By reducing water runoff and sedimentation, it protects groundwater and helps improve the condition of lakes, rivers, ponds, and streams, says a website describing the program. Acreage enrolled in the CRP is planted with resource-conserving vegetative covers, making the program a major contributor to increased wildlife populations in many parts of the country, the website says.

A large amount of CRP acreage regionally is expected to be planted in wheat after federal contracts expire. The contracts vary in length from 10 to 15 years. In the U.S., about 30 million acres are enrolled in the program, and contracts on an estimated 6.5 million acres are up for renewal Sept. 30, the U.S. Department of Agriculture says. Many industry experts are saying that 2012 is likely to be a tipping point for those lands because of high commodity prices and global food demand.

"With a lot of CRP acres coming out and as they start wheat production again on those acres, it's going to have a huge impact on the shipping facilities," Newbry says. "This (terminal) only enhances, and this builds for the future."

The McCoy terminal will be able to load railcars at a rate of 60,000 bushels an hour, and to unload them at 40,000 bushels an hour, Tee says. Shipments of grain on the P&L railroad line are expected go from the current level of about 2,100 railcars per year to more than 6,000 railcars annually.

The contractors that will be building the facility include The Haskins Co., of Spokane, and Railworks Track Systems Inc., of Chehalis, Wash. HDR Engineering Inc., of Spokane, participated in the design of the project.

The facility is to be built on about 66 acres, Tee says, and will include six grain storage tanks, an office, and about two miles of new track that will be configured in a teardrop shaped for loading. The Burlington Northern Santa Fe railroad will send to the facility what are called shuttle trains, also known as efficiency trains for grain hauling, that have 110 larger-capacity railcars with four locomotives that remain with the unit.

Dick Hatterman, Cooperative Agricultural Producers' general manager, says the terminal's loading system is specially designed for use with the shuttle trains as opposed to past methods of the railroad sending single railcars or groupings of 25 railcars for grain loading. The terminal's loading system will be able to weigh bushels of grain per railcar load.

The facility's track will connect to what's called the P&L shortline near McCoy, Wash., that leads to the main BNSF line at Marshall, Wash., about 10 miles southwest of Spokane.

Tee says empty train cars will be brought to the facility from the BNSF main line at Marshall, and after loading, they will head north again toward the Cheney area to enter onto the main BNSF line.

"We have to have enough track to hold the full 110 shuttle train," at the terminal, Tee says.

The facility also will be capable of unloading railcars such as ones brought in with grain from the Midwest that could be emptied and stored at the facility for later movement to the coast, Tee says.

A long-term goal of the project is to support and maintain the existing railroad infrastructure that connects to the BNSF mainline at Marshall. Washington state purchased the P&L shortline in 2004 to keep regional rail infrastructure intact.

Newbry says both PNW and Co-Ag, which jointly have more than 1,400 members, use and have ownership in river barge shipping facilities.

He says, "This is a very long-range strategic move for both companies. We're building for the future of farmers on the Palouse."