STB plans rail hearing in N.D.
Harvest isn’t quite on track for area farmers because of cool conditions. That might end up being a good thing because the rail system may not be able to accommodate all of this year’s grain in addition to ever- increasing oil field products.
North Dakota Farmers Union President Mark Watne, Jamestown, said that his group, along with about two dozen others, have been battling this very subject for about eight months but as the saying goes in cow country, the manure is about to hit the fan.
The Surface Transportation Board announced Aug. 19, that it will hold a public field hearing Sept. 4 in Fargo, N.D., on the service problems in the U.S. rail network.
The hearing will be at 8 a.m. CDT, Sept. 4, at the Hilton Garden Inn, 4351 17th Avenue S.
There are two main issues farmers across the Dakotas, Montana and Minnesota struggle with in regard to rail shipment – added costs for transporting grain caused by a diminished availability of grain cars and a loss of value to their grain caused by longer-than-desired storage times.
Watne said that a cool, wet spring and less-hot-than-normal summer will mean a later harvest this year, and will buy farmers and the railroad a little time. The long-term solution is more rail infrastructure – more by-passes and extra track, which doesn’t happen overnight. In the short term, NDFU and other groups are petitioning the Surface Transportation Board to accept complaints and comments from individual farmers. “Normally only shippers can file a complaint but we’re attempting early on to get permission for producers to communicate directly with the STB,” Watne said. The groups are hoping that individual letters from farmers will convince the STB of needed changes.
Watne said Burlington Northern Santa Fe Railway and Canadian Pacific Railway Company have been allowed to “semi-reguate themselves” which led to “captive shippers” with no alternative but to wait for a rail car, he said. “In some respects they have a monopoly, we can’t ship without extreme cost.”
Over the past eight months, farm groups have worked with the largest railroads in the area, BNSF Railway Company and Canadian Pacific Railway Company, urging them to prioritize grain shipment equally with oil field products. “We have seen some improvement,” Watne said. “To BNSF’s credit they are attempting to increase train speed and are adding some double track so they can pass trains more readily.
“Currently BNSF has two-thousand cars delayed, and they are all grain cars. There are only so many cars, engines, horsepower that can go down the track at any given time. We are saying, in the ag industry, that it appears the railroads are giving preference to the oil industry.”
Watne said his group urges equal treatment to all commodities – if 2,000 cars are delayed, there should be an equal percentage of oil and/or coal cars to grain cars.
Watne adds another concern he believes needs to be addressed. “In my opinion we should go after them (rail companies) for damage to prices,” he said.
Farmers currently are forfeiting around 30 to 40 cents more per bushel for transportation costs than average because of the high demand and low supply of grain cars. That cost has been as high as a dollar at times. With commodity prices down significantly this summer, that expense is notable, Watne said.
According to NDFU’s monitoring, train speed across the region has decreased over the past several months, adding to the problem.
“I can’t say for sure but our charts show they are running slower. That would create more demand for their services,” Watne said.
Some farmers have had problems getting rid of last years’ grain this summer, as they work to empty their bins in preparation for harvest. “Some farmers couldn’t deliver grain, so they weren’t able to pay off their operating notes,” he said.
BNSF is “getting very close” to catching up on the backlog of agricultural shipments tied to the 2013 harvest and has cut past due orders by 80 percent since March, spokesman Amy Casas told JOC.com in an email. The average wait for grain shippers during the middle of August was 17 days, compared to 19.9 days two weeks prior, according to a Journal of Commerce news story.
“With this kind of progress, we’re confident that we will have moved virtually all of the 2013 harvest over the next several weeks and are ready to handle this year’s crop,” Casas said in the JOC story.
BNSF appears to be making real headway in reducing its grain backlog, while CP is having a harder go of it, said Stu Letcher, executive vice president of the North Dakota Grain Dealers Association, in the JOC story.
Watne, who grows wheat, barley, corn, beans, said that early on in the harvest season, which he expects to ramp up in the next couple weeks, won’t be the problem. The backlog will probably be noticeable later in the fall.
The STB will direct CP and BNSF to appear at the early September hearing, and also invites shippers, other Class I railroads, and other affected carriers to appear, the STB said in a news release. The hearing is open to the public.
The hearing will provide an opportunity “to hear from rail industry executives on their efforts to address service problems, and to discuss additional options to improve rail service,” as well as hear from the general public, the STB said.
The Board held a hearing at its office in Washington, D.C. on April 10. Following that hearing, the Board says it issued orders requiring CP and BNSF to provide their respective plans and supporting data regarding the movement of fertilizer and grain.
The Board has been monitoring the rail industry’s performance since service problems began last year, and has taken formal and informal actions to address those problems, the release said.
Those wishing to speak at the hearing in the case, United States Rail Service Issues, Docket No. EP 724, should file with the Board a notice of intent to participate no later than Aug. 25. F
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Calves on the ground eventually mean dollars in the pocket and steaks in the meat case. It’s the basics of the beef industry.