Senators grill railroad operators about shipping delays for crops

Senators at a congressional hearing on Wednesday accused the railway industry of purposely delaying shipments of agricultural products—leading farmers to store large amounts of crops, sell at lower costs or lose crops altogether—in favor of shipping more profitable crude oil, Patrick Rucker reports for Reuters.

"Delays have been blamed on increased competition from oil and coal shipments, a bumper grain crop, an improved economy that is jacking up the amount of consumer goods and a bad winter. As a result, prices have significantly decreased, and many farmers have put crops in storage rather than sell at reduced prices. With record wheat and soybeans crops expected this year, farmers fear the situation will only get worse.

To remedy the problem "the rail sector has promised to spend $26 billion this year to improve service, but Senator Jay Rockefeller (D-W.V.), chairman of the Senate Commerce Committee, was not placated," Rucker writes. In addressing BNSF Railway and Canadian Pacific Railway Rockefeller said, "You pretty much get what you want and stop what you want around here. You are doing a great job for your shareholders. What about these folks?" Rockefeller said, referring to officials from the farm, auto and chemical industries who also testified at the hearing.

Arthur Neal, who analyzes market and transportation issues for the U.S. Department of Agriculture "said the massive grain harvest could exceed permanent storage bins by about 694 million bushels this harvest season or about 3.5 percent of expected totals," Rucker writes. "That glut could fill roughly 174,000 jumbo hopper rail cars with South Dakota, Indiana, Missouri and Illinois, among the states most impacted, he said, adding that much of last year's crop is still lying around." (Read more)