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A Good Leap Forward

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David Steffen, owner of Steffen Systems      

Back at the well-appointed office, avuncular company owner David Steffen, 49, is at ease hosting guests. Buyers for the Model 3546 visit from all over the world: Brazil, Italy and Australia, to name a few. That internationality is one of the problems that plagues Steffen. Keeping abreast of international standards and balancing them with ever-changing American rules eats up much of his time. “OSHA regulations are always changing, and what works here may not pass in Italy, for example,” he says.

Steffen has other worries: the price of steel, the threat of a rising minimum wage and the constant danger of a strike at the port. Yet he remains good humored, happily passing out Steffen Systems-branded candy and highly recommending the pie at the farm stand down the road.

It’s the world’s emergent middle class’s hunger for farmed meat and dairy, not pie, that fuels Steffen’s business. Only 20% of the food grown in the state ends up on Oregonians’ tables. The rest is sold out of state, with some 35% to 40% intended for the international market. Steffen’s company’s products are purchased by hay producers locally and around the world. Those growers have their eye on China and the Middle East.

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John Layton, next to a Uni-Vibe
electromagnetic conveyor

In 2009 China bought more than 74,000 tons of alfalfa, compared to none in 2006, the USDA reports. The reason is milk. Not a part of the traditional diet, milk consumption in China is rising dramatically: from 4.2 kg in 1990 to 28 kg in 2012, according to Alfalfa & Forage News. The Chinese government has simultaneously encouraged more modern and larger dairy production units, accompanied by a significant rise in dairy cow numbers, up from about 2 to 5 million in the early ’90s to 14 million today.

Other countries are also buyers of Oregon feed. With low water reserves, the United Arab Emirates and Saudi Arabia mandate that all animal feed be imported. Japan continues to be a big buyer of hay and alfalfa as well.

Not all of the state’s agriculture output is edible; timber, grass seed and landscape plantings figure as well. But creating efficiencies in food production is why Henningsen Cold Storage Co. recently built a 225,000-square-foot frozen food storage and distribution facility adjacent to NORPAC Foods, Inc., in Salem. The facility will help NORPAC consolidate their operations and save energy.

Built on NORPAC land but owned and operated by Henningsen, the warehouse promises to save the food-processing giant big money. “There are huge economies of scale associated with a customer centralizing products under one roof as opposed to having them spread out over many different facilities,” says Mike Henningsen, 51, chairman and president of Henningsen Cold Storage Co., in an email. “We often find that freight savings alone can justify the cost of new construction over the long run.”

Another cold storage facility, SnoTemp Cold Storage in Eugene, also expanded, adding 2.4 million cubic feet, banking on the region’s growing ag business.

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