Sheep ranching developed in the high desert region of Oregon in the late nineteenth century. The Columbia Southern Railway Company was incorporated in 1897. When a railroad spur was built south from the Columbia River, it became possible to more easily ship wool to market and the area prospered. The townsite of Shaniko was established in 1899. The railroad reached the town in 1900.
In 1899, the Shaniko Warehouse Company was formed and in 1901 the Company completed construction of the largest warehouse in Oregon. The building was 600 feet long and could house 4 million pounds of wool as well as all of the wheat in the area.
In 1901, the Moody Warehouse Company in The Dalles, Oregon, began construction of a warehouse in Shaniko. Eventually, the Moody Company bought the Shaniko Warehouse. The warehouses continued operations until 1940.