Quality Rail Transportation Vital to Soybean Farmers

Effect on farmers

From 2008 to 2009, rail revenues on a per-ton basis dropped 5% for soybeans, 5% for soybean meal and 0.2% for soybean oil.

From 2007 to 2008 (the most recent data publicly available), rail rates on a per-ton basis increased 16.66% for soybeans, 10.59% for soybean meal and 6.57% for soybean oil. Rates on biodiesel dropped 4.91%.

Dean Campbell, a farmer from Coulterville, Illinois, and Chairman of the STC, says, “As the STC analysis confirms, our nation’s railroads are essential to the profitability of the soybean industry, and the soybean industry is essential to the profitability of railroads. Farmers acknowledge that railroads need to generate necessary revenues to maintain and enhance their infrastructure, yet if rail transportation becomes too costly, farmer profitability and agricultural exports will be diminished.

“The STC works to help promote a balanced relationship in which both farmers and the railroads can benefit,” he adds.

“The potential $110 million overcharge by the railroads underscores the need for agricultural shippers to have a more accessible rate resolution process,” explains Mike Steenhoek, executive director of STC. “While many rail rates are undoubtedly justified, some are not. As a result, a significant amount of money is not being retained in farmers’ wallets or in rural communities due to unreasonable rates. Creating an environment that encourages continued infrastructure investment by the rail industry yet allows disaffected shippers to efficiently seek rate relief is possible and should be the goal of everyone concerned with the future of U.S. agriculture.”

In December 2009, the Senate Commerce, Science, and Transportation Committeepassed S.2889, “The Surface Transportation Board (STB) Reauthorization Act of 2009.” The bill seeks to address a number of rail shipper concerns by increasing rail industry competition, improving federal oversight, and enhancing rail customer access to regulatory relief. The bill has yet to be considered by the full Senate.

Earlier this year, the STC released its first annual Rail Customer Satisfaction Indexin which leading U.S. grain and oilseed shippers ranked the nation’s largest railroads in three categories: 1.) On Time Performance; 2.) Customer Service; and 3.) Costs. BNSF Railway received the overall highest rating among the nation’s seven Class I railroads.

The full STC study on the railroad movement of soybeans and soy products can be accessed at the STC’s website.