North, South Dakota reps talk rail efficiency | TSLN.com

North, South Dakota reps talk rail efficiency

North Dakota Agriculture Commissioner Doug Goehring told the U.S. Surface Transportation Board (STB) at their Sept. 4, hearing, that farmers, processors and commodity shippers want to know that the chronic cycle of railcar shortages and rail delays can be broken and that progress is being made to find real solutions to North Dakota rail problems.

"I'm not telling railroads how to run their businesses," Goehring said. "I'm telling them they have businesses here in North Dakota that they need to serve."

Goehring spoke Thursday morning in the opening round of testimony during the STB's public field hearing in Fargo. Also testifying were Gov. Jack Dalrymple, members of the state's congressional delegation and other North Dakota, Minnesota and South Dakota state officials.

"A reliable and accessible transportation system is necessary in North Dakota and throughout the entire upper Midwest," Goehring said. "In North Dakota, 82 percent of our grain and oilseeds move via rail with a significant portion of these shipments traveling nearly 1,500 miles to the Pacific Northwest. The distance our products need to travel for export and processing requires timely shipping."

The commissioner said unprecedented shipment delays by Burlington Northern Santa Fe (BNSF) and Canadian Pacific (CP) has created a problem that leaves farmers with the only option of storing their crops, which he termed "is an unacceptable solution."

"Both BNSF and CP need to prioritize grain and oilseed shipments," Goehring said. "For example, soybean shipments have a very small window to meet marketing demand in Asia and Southeast Asia. These products must be shipped between October and February, demonstrating the need for certainty in our rail service because we cannot store our way to prosperity."

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Goehring said BNSF's recent efforts to add locomotives and employees; lay new track and improve communication with the agriculture community are appreciated, but that much more needs to be done."

"However, agriculture products have to be moved by both companies," he said. "I am more disturbed when I hear stories about individuals who haven't seen grain cars from CP in months; it is clear that the backlog is not the only problem."

Goehring said the situation is bad now, but could become desperate in coming months.

"Planted acres in North Dakota for corn, soybeans and wheat are at record-breaking or at near record levels this year," he said. "This should be good news instead; it is increasing producer anxiety because these products could be trapped within the system on farms or in elevators. The fact that more than 15 percent of our 2013 crop is still in storage compounds the problem."

He urged the STP to take strong action.

"With 2013 crop still needing to be moved and this year's harvest fast approaching, we need to know that plans are in place so we can enter the 2014-15 marketing year with confidence," he said. "Producers want to know that this cycle can be broken and that progress is being made with real solutions for our real problems.

U.S. Senator John Thune (R-South Dakota), Ranking Member of the Senate Commerce, Science, and Transportation Committee, submitted comments too.

At the request of Thune, the Senate Commerce Committee will also be holding a hearing on September 10, 2014, to further highlight how rail backlogs and service delays are impacting businesses throughout the U.S.

Thune served as State Railroad Director under former Governor George S. Mickelson from 1991-1993.

"As you know, the primary driver of the South Dakota economy is agriculture. While we were fortunate to set harvest records last year in corn production, the on-going rail challenges have resulted in a shipping backlog of last year's grain. For example, on June 1, 2014, the last time a grain storage use assessment was issued by the U.S. Department of Agriculture (USDA), there were 281 million bushels of grain still in storage from last year, filling 28 percent of total storage (both on and off farm) capacity within the state. For some context, the three-year average for grain storage use on June 1st is approximately 218 million bushels, or 23 percent of total capacity."

For a complete outline of Thune's work to reduce the rail service backlog, and to read his full comments visit his website.

–N.D. Department of Agriculture and Senator Thune