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Rallying For Rail

South Dakota farm leaders say their work supporting the DM&E expansion may soon pay off.

South Dakota farm leaders are hoping that their work on railroads is about to pay off.

In South Dakota, a final decision on the expansion and upgrade of the Dakota Minnesota and Eastern Railroad is due soon. The DM&E wants to upgrade its line across South Dakota and build 260 miles of new track into the Wyoming Powder River Basin coal fields. The $6 billion project – which has been in the works for nearly a decade -- would make it possible for the DM&E to haul low-emission coal to power plants in the Midwest and significantly expand service to grain elevators, ethanol plants and soybean processors in South Dakota and Minnesota.

"This would be the most significant expansion in rail service we've seen in the past 100 years," says Reid Jensen, president of the South Dakota Corn Growers and chairman of GOTRAC, a coalition of groups supporting the expansion. Nearly all ag groups in south Dakota are members of the coalition, including the Farm Bureau and Farmers Union.

Sen. John Thune (R-S.D.) says the railroad expansion would have a big impact on South Dakota's economy. It would create 10,000 jobs, spawn new businesses and enable existing companies to expand.

Improved rail service could have a big impact on agriculture, too. USDA reports that it may increase grain prices 20 cents per bushel and reduce shipping rates. If the DM&E links up with other railroads in Wyoming, it would create a new, more direct route to Pacific Northwest ports. Ethanol and biodiesel plants would be able to use the line to ship biofuels to either coast efficiently.

"Expanding the DM&E would have a transformational impact on our economy," Thune says.

However, the 10-year-old project hinges on a Federal Railroad Administration decision on a DM&E loan application. The railroad, headquartered in Sioux Falls, S.D., has requested a $2.3 billion loan from a program that helps railroads improve service. If approved it will be one of the largest loans in the history of the program.

Transportation Undersecretary Jeff Shane says the FRA will have to decide whether the loan is a good risk for taxpayers. The FRA has a dozen other expansion projects to consider, too.
South Dakota farm leaders say the DM&E project will be a good investment.

"All my life I have watched railroads go downhill," said John Sumption, a Frederick, S.D., farmer and South Dakota Farmers Union director at a recent DM&E hearing. "It's time to turn it around."

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