Rail Backlogs Fuel Grain Shipping, Storage Concerns Ahead of Harvest

Farm-state legislators continue to press rail companies to speed grain shipments as harvest draws closer, again underscoring rail transportation issues that earlier this year caused headaches for farmers awaiting shipments of fertilizer.

During a round table discussion in Minot, N.D., Monday, Sen. Heidi Heitkamp, D-N.D., discussed the backlog's effects on farmers and improvements railway companies can make to avoid future transport delays as forecast record crops begin to take over available storage reserves.

Rail companies Burlington Northern Santa Fe and Canadian Pacific were ordered in May to provide updates to the Surface Transportation Board regarding progress in eliminating delays for agricultural shipments, though Heitkamp says progress has been minimal.

Since the reports began in June, Heitkamp's office says Canadian Pacific has only logged a 5% improvement in the number of open requests for grain cars to August. Wait time has also increased, from 63 days to more than 80 days.

"We have received far too little information from [Canadian Pacific] about the status of its delayed agriculture shipments and the efforts to address them," Heitkamp said in a statement. "We need transparency and an open dialogue between North Dakota farmers and Canadian Pacific about what steps are being taken to accommodate the coming harvest."

In its August 7 Grain Transportation Report, USDA also addressed CP's sluggish action on the delays.

"CP has stated it does not have an accurate idea of how large its backlog is, complicating efforts to estimate whether it can clear its backlog within the remaining time before harvest," the report said.

At its current rate, it could be late November before the shipper's backlogs are cleared. "By this time, the 2014 harvest will be nearly complete, and there would probably not be enough storage space for both crops, especially in South Dakota," USDA reported.

BNSF, on the other hand, has made significant improvements. In an August 8 update, BNSF reported it has avoided interruptions and is "focused on moving crop consistent with orders received," Agricultural Product Group Vice President John Miller said.

Average days late for North Dakota, Montana, Minnesota and South Dakota range from 21.5 to 8.9, BNSF reported. According to its status report provided to the STB as of August 7, past due orders were down 14.1% on the week from 4,066 to 3,492.

"We pledge to continue to plow forward delivering last year's crop as well as this year's and to perform better than we did last year," Miller said.

USDA's Grain Transport Report suggested BNSF could work through its backlog of grain cars by October 1, perhaps sooner if it continues to clear delays at its current rate.

Though the company is working to shore up delays with more cars and more employees, Forum News Service reports that Sen. John Hoeven, R-S.D., thinks track availability is also an issue.

"We need more track," Hoeven told farmers and agricultural processors at a meeting in Fargo last week, according to Forum News. "And we need more double-track, because we know we're going to move more oil. We need more capacity to avoid this problem in the future."

Farmers are expected to harvest record crops this fall, bringing in an estimated 4.03 billion bushels of corn and 3.816 billion bushels of soybeans, according to USDA's August 12 crop reports. The U.S. wheat production estimate was also raised to 2.03 billion bushels.

North Dakota State University in May suggested that farmers lost $66 million due to agriculture shipment delays between January and April 14. At the time, the study ons remained the same.

Source: Farm Futures

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