Canadian Pacific Railway said it will have enough capacity to move fertilizer for farmers in the Midwest in time for spring planting.
Norm Betts, Bloomberg
Railroad says it's committed to hauling fertilizer
- Article by: JAMES MacPHERSON
- Associated Press
- April 18, 2014 - 4:10 PM
BISMARCK, N.D. — Canadian Pacific Railway told a federal oversight board Friday that moving fertilizer for spring planting does not present a "significant challenge" for the railroad.
"We are ready to move fertilizer and plant nutrients as they are presented to the railway," Keith Creel, the Calgary, Alberta-based railroad's president and chief operating officer told the Surface Transportation Board.
Recent service problems in the nation's rail network spurred the federal board to hold a hearing last week, during which farmers and representatives for agriculture producers said delays could disrupt planting. The board this week ordered Canadian Pacific and BNSF Railway Co. to report their plans by Friday to ensure timely delivery of fertilizer, which helps boost production of wheat, corn and other crops.
Increased crude oil and freight shipments have largely been blamed by farmers and others for causing the rail delays. BNSF, which is the biggest shipper in the Upper Midwest, has said that rail service has been backlogged because of bad winter weather.
Creel echoed BNSF on Friday, saying the "extreme winter weather" that caused rail traffic congestion in Chicago should ease soon, and "will result in improved transit times for all shipments, including fertilizers."
The Fertilizer Institute, a Washington, D.C-based organization that represents manufacturers, told the board in written testimony that timely fertilizer shipments have not been an issue for at least a decade — until now.
The group told the board this week that "it's genuinely concerned that the fertilizer industry will not be able to deliver the fertilizer needed for crop production, particularly in major agricultural areas served by BNSF and CP. If the necessary supply of fertilizer is not available, those crops, and thus food production, will be reduced. That in turn can lead to higher food prices for consumers."
BNSF said Thursday it will add about 50 trains mostly in the Dakotas, Minnesota and Montana in the next six weeks solely for transporting fertilizer.
Creel said in a letter to the board that Canadian Pacific "is a small, residual player in moving fertilizers and plant nutrients," moving fewer than 50 cars daily in the Dakotas, Iowa and Minnesota, with an overall market share of about 10 percent.
The railroad was "a little surprised" that it was ordered to present a plan because of its "relatively small presence in agricultural fertilizer and plant nutrients," Creel wrote.
North Dakota, the nation's No. 2 oil producer behind Texas, is nearing 1 million barrels of daily production, about three-fourths of which is being moved by rail as producers increasingly turn to trains to reach U.S. refineries where premium prices are fetched.
BNSF hauls about 75 percent of the oil that currently leaves North Dakota by train, state officials have said. Several companies have invested more than $2 billion in rail infrastructure in the Bakken region of North Dakota since the first oil shipment moved from the state in 2008.
BNSF spokeswoman Amy McBeth said in a statement that service to all of the railroad's customers, including oil shippers, has "been impacted over these past few months. However, across our network we are seeing signs of improvement."
Grain also has been hard hit by rail delays, as shipments are lagging a month or more behind schedule in North Dakota and other states.
In written comments this week to the Surface Transportation Board, the Washington, D.C.-based National Grain and Feed Association said disruptions to grain shipments have been "widespread and severe," and occurred "long before the onset of harsh winter weather."
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