Washington, D.C.—Minnesota soybean farmers Lance Peterson and Bill Gordon were among nearly 40 speakers to testify before the Surface Transportation Board in Washington D.C. about challenges with rail transportation. Peterson and Gordon, both Minnesota Soybean Growers Association (MSGA) and American Soybean Association (ASA) directors, highlighted the impacts increased rail costs and widening grain basis are having on farmers.
“We were certainly able to create awareness on this very important issue,” Peterson says. “It drove home the seriousness of the situation.”
Because competition for rail cars, grain cars are often delayed or unavailable to grain elevators. When they are available, the cost for securing cars has skyrocketed from about $600 per car to over $3,000. That cost is passed on to farmers in the form of a widened basis. The widened basis could result in millions of dollars in lost revenue for farmers.
“The railroads are working to catch up on the back-logged rail cars now that the weather has improved,” Gordon adds. “As farmers, we need to keep reminding them that our grain needs to be moved by fall for new crop.
Rail officials pointed to competition for rail availability from a growing domestic oil industry, coal shipments and intermodal shipping as reasons that farmers and others are seeing delays in rail car availability. Minnesota soybean farmers, who export over half of their crop, are being impacted.
“The delays in shipping not only affect the prices we receive but it also impacts the delivery deadlines to our important export markets,” Gordon says. “If we can’t deliver what our customers expect, we could lose current and future sales. That would put our reputation as a top quality provider and reliable source of these commodities in jeopardy.”
Investments are being made to upgrade rail capacity serving Minnesota and other states along the northern tier of the United States. However, those investments aren’t likely to have an immediate impact on the bottleneck.
“The bottom line is it’s going to take time,” Peterson adds. “There’s no rapid answer. Investments and improvements are going to take time to have an impact.”
Gordon and Peterson testified as part of a public hearing before the Surface Transportation Board on April 10.
Minnesota Soybean Growers Association
MSGA is a non-profit, farmer-controlled membership organization established in 1962. Its goal is to assure profitable soybean farming by influencing favorable ag legislation, monitoring government policies and supporting research and market development activities.