Transportation delays cost US farmers $570M last winter

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  Farmers in the upper Midwestern United States lost $570 million in winter 2013-14 due to transportation delays.

  From WATTAgNet:
  A report from the U.S. Department of Agriculture (USDA) says soybean, corn and wheat farmers in the upper Midwestern United States lost $570 million in winter 2013-14 due to transportation delays.
  Farmers in Montana, Minnesota, North Dakota and South Dakota lost about 3 percent of their cash crop receipts, the report says.
  On a nearly exhausted railway network, there is stiff competition, with fracking and oil industries making it more difficult for farmers to find a spot on the rails. Grain car backlogs, storage issues and rail car premiums affected transportation costs and grain prices.
  “It wasn’t necessarily that we didn’t have the rail cars, it’s that we didn’t have the engines to pull them all. So when the engines are all pulling oil tankers, we don’t have them to pull grain trains,” said Charlie Kuskie, an agriculture commodity broker in Nebraska.
  After the record 2014 harvest, there also were hang-ups on the rails, and farmers and grain elevators turned to barges and trucks to move their grain.
  Since 2013, railway companies have added millions of dollars’ worth of railcars, engines, staff support and infrastructure.
  Sen. John Thune, R-S.D., who requested the USDA report, praised the rail companies for making changes, but said improvements should continue.
  "While the railroads have made important gains in rail service in recent months, we need to work to ensure that this service continues," Thune said.

NGFA testifies on effect of rail disruptions on grain industry

The National Grain and Feed Association (NGFA) has urged thefederal Surface Transportation Board (STB) to require Class I rail carriers to reportand make publicly available several specific service-related metrics in the aftermathof the serious disruption in rail service that began last fall.
Inwritten statement submitted April 17, the NGFA told the STB of the impacts and costs rail service disruptions have had on grain elevators, grain processors, integrators and exporters. NGFA's comments focused particularly on service-related disruptions involving the BNSF, Norfolk Southern, Canadian Pacific and CSX Railways. The NGFA's statement, which was presented orally during an April 10 STB public hearing, was endorsed and supported by six other national agribusiness organizations: Agricultural Retailers Association, Corn Refiners Association, National Chicken Council, National Council for Farmer Cooperatives, National Oilseed Processors Association and North American Millers' Association.
"The sheer gravity, magnitude and scope of rail service disruptions now being experienced are unprecedented, and have rippled through all sectors of grain-based agriculture," testified NGFA Rail Shipper/Receiver Committee Chairman Kevin Thompson, assistant vice president and transportation lead for Grain and Oilseed Businesses at Cargill Inc. in Minneapolis. As a result, he pointed out:
Country elevators and other originators of grain and grain products are extremely hesitant to price and book forward sales from farmers or commercial elevators because they cannot count on predictable rail service or reflect the current level of freight costs in their price bids.
Grain processors and export elevators have idled or significantly reduced operating capacity because of an inability to predictably source sufficient quantities of grains and oilseeds.
Millers in the upper and central Midwest are confronting facility shutdowns as they run out of raw commodities to process, including oats and certain classes of wheat.
Still other grain processing and animal feeding operations, particularly in the Eastern United States, are shifting to comparatively inefficient and much more costly long-haul truck movements in an attempt to obtain sufficient quantities of grains and oilseeds. Still others are switching rail origination to other carriers in the limited instances where that is possible.

Container lines call for refrigerated cargo rate increase

Container lines serving raw meat industries involved in U.S.-Asia trade are calling for an across-the-board increase in refrigerated cargo rates in order to cover higher equipment and operating costs during the traditionally slow season.
Member carriers in the Westbound Transpacific Stabilization Agreement said the recommended guideline increase of $300 per 40-foot container is to take effect January 1, 2012, and will apply to all commodity segments and origin-destination pairs.
WTSA members say the increase is needed to ensure equipment availability by covering the network costs of redeploying refrigerated containers from other trades. Refrigerated equipment tends to be diverted out of the transpacific during winter months in the U.S., which adds to operating costs in serving U.S. export shippers of agricultural and non-agricultural commodities. The problem is compounded when equipment is pulled from more lucrative markets that pay higher rates for refrigerated and other specialized equipment, WTSA members say.

US agriculture organizations call for more competitive rail environment

The National Grain and Feed Association and 11 other U.S. agricultural trade organizations have released a statement urging the federal Surface Transportation Board to improve its regulatory structure to foster a more competitive rail environment.

The National Grain and Feed Association and 11 other U.S. agricultural trade organizations have released a statement urging the federal Surface Transportation Board to improve its regulatory structure to foster a more competitive rail environment.
The STB is currently conducting a proceeding to explore the current state of rail competition and potential policy initiatives to promote additional rail-to-rail competition.
Enhancing both regulatory access to the agency and problem-solving in rail markets between carriers and their customers could spur growth in both U.S. agriculture and the rail sector, which in turn would support an “improved overall U.S. economy and provide for more vibrant job growth in many sectors served by rail,” said the organizations. In their joint statement, the organizations focused on issues such as rates and switching charges, business practices imposed by carriers, contractual barriers to competition and improvements to the agency’s arbitration procedures to foster improved dispute resolution between railroads and shippers. 
Other national agricultural producer and agribusiness associations joining the NGFA in the statement included the Agricultural Retailers Association, National Association of Wheat Growers, National Barley Growers Association, National Chicken Council, National Corn Growers Association, National Cotton Council, National Council of Farmer Cooperatives, National Oilseed Processors Association, Renewable Fuels Association, The Fertilizer Institute and USA Rice Federation.
The NGFA plans to testify at a June 22 public hearing scheduled by the STB as part of its rail competition proceeding.