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Senators Request USDA Economic Report on Rail Service Shortfalls

Senators Request USDA Economic Report on Rail Service Shortfalls

Senators say more information is needed to fully address rail service impacts on agricultural producers

Sens. John Thune, R-S.D., and Amy Klobuchar, D-Minn., last week asked USDA for an economic analysis detailing rail service challenges facing agricultural shippers.

The Senators said the request follows testimony from USDA's own Deputy Administrator of the Transportation and Marketing Program Arthur Neal, who testified before the Senate Commerce Committee on Sept. 10, stressing the challenges America's agriculture producers and grain elevators face due to sluggish rail service.

Slow or inadequate rail service has been a significant issue for northern Midwest producers as harvest season begins to yield bumper crops, much of which will eventually be transported to final destinations by rail.

Senators say more information is needed to fully address rail service impacts on agricultural producers. (CP photo)

Related: Rail Companies Hear from Farmers, Legislators on Transportation Backlogs

The Surface Transpiration Board has been involved in monitoring rail service issues since the summer, specifically focusing on the Canadian Pacific and BNSF carriers. Both have been providing service updates to the STB weekly since June.

The Senators, in a letter to the USDA to request a more comprehensive audit of the ongoing transportation challenges, said they are seeking information to "present a clearer picture of the challenges facing the agriculture industry as we work to help resolve them."

"While we understand that you have briefed the president on this critical rail situation, no regional or national studies have been conducted to assess the economic impact of these rail service challenges," the letter continued.

Related: Exclusive Report: Will Train Troubles Derail Harvest?

Further, the Senators asked USDA to ensure commodity prices, food prices, and changes in agricultural exports are factored in, where applicable.

Both Senators have worked the STB previously on the backlogs; Thune has said that the car shortage is not the only problem as more oil is moving out of the northern Midwest, and capacity will need to expand to meet shipping needs.

The most recent hearing was in early September in North Dakota, where soybean farmers testified on the economic impacts of shipping issues. According to American Soybean Association Director Lance Peterson, who testified at the hearing, lost income on his farm will total more than $100,000.

For more rail and basis coverage, check out September's Farm Futures NOW! and Bryce Knorr's Weekly Transportation Review.
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