Thursday, May 15, 2014

'Trains for grains scarce on the U.S. Plains,' Reuters headlines a situation piece on the problem

Farmers in the northern Great Plains rely on railroads to carry their product, but many wheat shipments have been delayed, sometimes by weeks, because of the bad winter, competition from oil and coal shipments, and an improved economy that has increased the amount of consumer goods being shipped. Trains have been delayed by 25.5 days in North Dakota and 32.5 days in Montana, Karl Plume reports for Reuters.

"Farmers are scrambling to find storage space as they prepare to harvest the winter wheat crop in the coming weeks, and some are changing their spring crops to avoid high-yield corn, which takes up more space in silos than wheat," Plume writes. "Others are taking on the extra costs of trucking their harvest to far away markets. The trouble is now rippling through the agricultural economy, disrupting grain processing at mills and leaving cereal and food companies short of supplies."

Some grain farmers, especially in the Dakotas and Minnesota, are stuck holding their largest grain stocks in years. In some cases, millions of bushels of grain have to be kept in storage, Plume reports: "The trouble is now rippling through the agricultural economy, disrupting grain processing at mills and leaving cereal and food companies short of supplies."

A North Dakota State University study "found that rail congestion could cost farmers in the state more than $160 million because the grain glut depressed local prices: $66.6 million in lost wheat, corn and soybean revenue from January to mid-April and an expected $95.4 million more in losses if their remaining inventory gets stranded," Plume writes. (Read more)

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