An overburdened rail system has backlogged grain car orders and delayed grain shipments for months, and some of the worst problems are in
Rail companies promised to do better when the issue surfaced in April, but state and federal officials want stronger assurances that railroads will catch up and that grain shipments will be more timely.
"The Board remains very concerned about the limited time period until the next harvest, the large quantities of grain yet to be moved, and the railroads' paths toward meeting their respective commitments," according to the directive, issued two weeks ago.
It noted that despite some progress in reducing backlogs, railroad delays are causing "severe, negative effects" for farmers, including "elevators running out of storage capacity, risks of stored grain spoiling, and penalties incurred by grain shippers for products that are not delivered on time."
State officials also are concerned, and the
Farmers typically store much of their own grain, but most eventually sell it to a grain elevator for temporary storage and shipment, Zelenka said. The elevators in turn sell the grain to an end user, perhaps on the
Zelenka said railroads seem to be more interested in moving oil from
The extra oil shipments have aggravated congestion in
"The way things stand right now, it's going to be nip and tuck as to whether railroads will be able to move last year's crop prior to new crops coming out of the field," he said.
Railroads under pressure
"BNSF is not favoring crude shipments over other shippers like agriculture," she said in an e-mail. "This is a case of rapid growth for several commodities using parts of our railroad network that hadn't previously seen that kind of volume." Those cargoes included consumer products, coal and a surge in grain traffic at the end of 2013 caused by overlapping crop harvests, she said.
Railroads also have cited severe winter weather that forced them to run shorter trains, and increased backlogs and congestion.
Officials from BNSF and Canadian Pacific pledged to address the delays in letters sent to the
BNSF's associate general counsel,
Canadian Pacific, which moves about 15 percent of the grain in
Canadian Pacific's president and chief operating officer,
Congestion in the rail yards
Creel said Canadian Pacific intends to move 2,000 to 2,500 grain cars each week this summer, but noted that one of the continuing problems -- not within the railroad's sole control -- is "severe congestion/bottlenecks at
Shipping costs have tripled in
Elevator operators need to factor those costs into the price they offer farmers for corn and soybeans, Purath said, so growers receive less per bushel.
"It's a lose-lose operation for both grain elevators and growers," he said.
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