Farming industry continues to wait for railway improvements

As harvest season is coming to an end, farmers and those in the farming industry are yet again faced with the ongoing issue of less than sufficient railcars and lines to move their products.

railcar shortage

Posted on 9/27/14

By Dee Entzi

From Washington, D.C., the rail companies released a new status report on the grain car backlog on September 22 that read as followed:

“Today Congressman Kevin Cramer announced BNSF Railway and Canadian Pacific Railway (CP) have publicly filed updated weekly status reports on the backlog in grain shipments. The figures from BNSF show a total of 1,646 past due rail cars in North Dakota averaging 8.8 days late as of September 19, compared to the report the previous week which indicated 1,000 past due cars were averaging 7.9 days late. The CP report shows a total of 3,023 open requests in North Dakota with an average age of 10.45 weeks. The previous report showed 5,184 open requests with an average age of 11.81 weeks.”

Over the last 20 years farmers have gotten used to delays in movement due to crew and weather. With the recent oil boom along with more productive harvests’, and last years excessively cold temperatures causing much delay, they are now eagerly waiting for a long-term solution.

General Manager of CHS, Tom Lehar, commented, “Our local farmers continue to produce increasingly larger crops, and in the past several years the prices have prompted producers to sell grain aggressively which places a lot of pressure on railcar movements in the first several months of the marketing season. With grain price erosion over the past six months, it appears that grain flow will be spread across the entire marketing year and perhaps get carried into the future years.”

Lehar continued, “The railroads are experiencing record movements in their industry, with oil being the most publicized. They are in the process of adding additional lines to their bottleneck areas to make their lines more fluid. This will improve overall flow of all railcars, but it will take several more years to complete.”

All across the industry, steps have already been taken locally to compensate for the lack of railroad dependability; farmers have built additional on-farm storage and elevators have added storage capacity.

CHS has also chosen not to accept Canadian grain at this time to prioritize their United States customers. Canadian producers faced similar challenges last year trying to move grain causing some United States elevators to take a large amount of product off their hands and in turn adding more stress to the railroad system in the United States.

The railroads made some progress over the summer months as the weather cooperated, however, the forecast is not always in their favor and farmers are hopeful that the progress continues with rapid ground work.

BNSF Railway is also keeping in mind other options such as, buying additional shuttle trains from other facilities across the country in the secondary market, though it would cost a significant amount to accomplish that. At this time, farmers can only hope that history doesn’t repeat itself and this years winter will not delay the railway system further.