Valdosta Daily Times

Business

July 12, 2014

Grain shipments backlogged by railroads

- — Farmers and grain elevator operators are worried about millions of bushels of corn and soybeans from 2013 that still haven’t shipped, even as this year’s crop is in the ground.

An overburdened rail system has backlogged grain car orders and delayed grain shipments for months. Some of the worst problems are in Minnesota and the Dakotas.

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 federal Surface Transportation Board has ordered Canadian Pacific Railway and BNSF Railway Co. to provide specific details and target dates to ensure shipment of last year’s crops before this fall’s harvest.

“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 last month.

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.”

Bob Zelenka, executive director of the Minnesota Grain and Feed Association, said the rail backup has caused financial problems for grain elevators, and logistical troubles for grain handlers and traders.

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 West Coast for shipment to Asia, and order a train to move it by a certain date.

Zelenka said railroads seem to be more interested in moving oil from North Dakota than grain from farms. “We still have grain elevators that are several weeks behind on receiving their (rail) cars, while at the same time, every day, an oil train goes by the elevator, which seems to add insult to injury,” he said.

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