The New Northwest Passage

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"For a long time, we couldn't afford to live in quality housing," explains the Washington State branch manager for a Japanese company. "Now we can afford it, and we want it." Apparently, other Japanese agree: in 1985, 26,000 new Japanese houses were built in the American style.

An Asian consumer market that is fast becoming Americanized is one reason Gregory looks to Asia as the growth area for the northwestern lumbermen. Improvement in transportation is another. The economics of containerized transoceanic transport today actually makes it cheaper to ship lumber down the Columbia and through the port of Portland to Japan than loading it on trucks or rail and sending it to Texas. And since February 1985, the falling dollar has effectively reduced the price of American lumber by nearly 40% to Japanese customers.

"These are absolutely the markets of our future, if we are going to have a future," says Gregory, who expects the export share of his business to double or even triple by 1990. "And as places like China and Korea get more dollars, you're going to see the same thing taking place that you now see in Japan."

This optimistic view of Asia's market potential is not limited to hard-pressed lumbermen. Some of Oregon's cherry growers have also boosted sales by increasing their Pacific shipments and conforming to the exacting standards of Asian customers. For some growers, this has meant adopting new irrigation methods and other horticultural improvements. But for nearly all the exporters, it has meant a change in schedules -- away from the early harvests that had became a popular way to reduce the exposure to early fall rainstorms, in favor of late harvests that allow cherries to become darker, sweeter, and plumper by ripening on the trees.

"We've made a commitment to quality that we know will be rewarded," explains Bob Thompson, president of Oregon Cherry Growers Inc. "There will be years when we might lose a crop because of rain, but in the long run, the quality will win out," he says, noting that the Japanese are willing to pay as much as a third more for the better-tasting fruit. The Japanese, Thompson says, "are now a critical part of our whole program."

How critical? Only five years ago, exports took only 10% of Oregon's cherry output. Today, it's anywhere from 20% to 50% -- for many small growers, the difference between survival and disaster.

Oregon wheat farmers have not fared as well. While the Columbia remains the nation's number-one export route, taking some 85% of the Oregon crop, foreign competition has cut the size of that crop dramatically. Last year, for example, total grain exports from Oregon were down by more than a third -- or about half the peak levels of 1980. One reason: lots of cheaper wheat being exported by Australia and Canada.

But like the lumbermen and the cherry growers, Oregon's wheat farmers are determined to find reliable markets across the Pacific. Various trade associations have looked into new markets in such places as Indonesia and Russia's eastern provinces, and to expand existing markets in Japan and Korea.

One major thrust involves promotion, through advertising and baking classes, of such foods as biscuits, doughnuts, and cakes. These items are foreign to Asian diets. And not coincidentally, they just happen to call for the particular strain of soft white wheat grown throughout the Pacific Northwest. "We're turning them into junkfood junkies," jokes Jack Hay, president of the Oregon Wheat Growers League, himself a farmer. "Diets are changing there. They are already selling all the McDonald's pies they can produce in Korea. And those little pies use our wheat."

What the wheat farmers are doing, of course, is what anyone might do when existing markets are threatened: scout new customers, adjust operations to suit them, and invest modestly in new marketing efforts. And what works in farming and lumbering can work just as well in manufacturing. Just ask Ronald Brudi.

Until about five years ago, Brudi Equipment Inc., in Kelso, Wash., a manufacturer of forklift attachments, depended almost entirely on sales to approximately 600 American forklift dealers. But as the American forklift industry, hit by cheaper imports, began to lose its dominance in both domestic and international markets, Brudi realized that he, too, was in trouble. The point was driven home in 1983 when Hyster Co., one of the nation's largest manufacturers, closed its facility just down the river in Portland.

These days, however, Brudi no longer worries about Asian manufacturers. That's because a number of them are his customers. Japanese and Korean manufacturers, in fact, now represent more than half his sales and account for a doubling in company sales during the past five years. And in the future, Brudi looks for stronger Asian connections, as some of his Japanese customers open plants in the United States, and as the Korean giant, Daewoo Corp., begins to distribute Brudi products to forklift distributors and users throughout Korea.

"You've got to get to the point where it doesn't matter if the manufacturers back East get in trouble," notes Tom Jacka, a former government trade official whom Brudi hired to sell his products overseas. "Our view is that the Asian market is our future."

Denny Pease, of the Columbia/Snake River Marketing Group, agrees. "There has to be a cultural reorientation of what this region is and wants to be," he says. "And that is part of the Pacific Rim. That's hard to sell to people who have spent their lives seeing themselves as the resource providers and breadbasket for the rest of the United States. But we've got to realize that our future lies more in Tokyo than it does in Atlanta or New York."

President Jefferson could not have said it better.

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