WASHINGTON – Operators of the Fosston Tri-Coop grain elevator in northwestern Minnesota used to pay $700 to reserve a rail car to deliver their grain. Now, it costs $4,000 per car.
But even at the premium rate, co-op officials get no guarantee of exactly when the rail cars will arrive or leave.
“The price is jacked up, but we’re still not getting priority,” Fosston co-op board member Robert Johnson said in an interview.
Johnson was among 18 Minnesota farmers who came to the nation’s capital last week to urge Congress and federal regulators for more oversight of the railroads they rely on to get their goods to market.
Their meetings coincided with strong calls for action by Sens. Amy Klobuchar and Al Franken of Minnesota and Sen. Heidi Heitkamp of North Dakota, all Democrats.
“Whatever power they do have, they need to exercise it,” said Bryan Klabunde, who grows corn and soybeans on 2,500 acres in Mahnomen, Minn.
Klabunde, who came to Washington to lobby for the first time, must now store grain in huge bags since local elevators and regular storage bins on his farm are full. With the fall corn harvest roughly three weeks off, Klabunde and other farmers grow more worried each day about how they will move and sell their new crops.
“There might be a looming farm crisis, and every loss of market is going to contribute to it,” explained Mike Peterson, who grows corn and soybeans and raises hogs in Northfield, and like Klabunde was on his first lobbying trip to D.C.
Farmers like Klabunde, Johnson and Peterson place most of the blame for any looming crisis on the increase in oil trains coming out of the Bakken range in North Dakota. With companies pumping a million barrels a day and shipping the majority of it by rail, the stress on the rail system in the Upper Midwest has become troublesome.
The government is monitoring the operations of BNSF Railway and Canadian Pacific, the main rail carriers in the area. A Sept. 4 BNSF report to the Surface Transportation Board said the railroad had 89 past-due grain cars in Minnesota that were an average of 25.6 days late. Canadian Pacific reported 826 unmet requests for grain cars. The unmet requests were on average 17.2 weeks old.
John Miller, BNSF’s vice president in charge of agricultural shipments, says BNSF is now just 60 grain cars behind in Minnesota, is moving record amounts of agricultural products in the Upper Midwest, and will perform better on this year’s harvest than last. Miller added that recent record harvests, not oil shipments, have driven the costs of grain cars up.
“We don’t have anyone who can’t ship in Minnesota,” Miller said in an interview. “If there are grain bins that are full, it’s because [farmers] don’t want to sell.”
Gary Wertish, vice president of the Minnesota Farmers Union, countered that enough grain train backups by BNSF and Canadian Pacific still exist in the state to keep growers upset.
“They’re trying to make it look good,” Wertish said of BNSF. “That’s not what we’re hearing from our farmers on the ground.”
In recent days Klobuchar, Franken and Heitkamp each called for better oversight of the rail system.
“I understand BNSF has dramatically reduced their grain car backlog after the [Transportation Board] ordered them to develop a strategy to do just that, and I thank them for their efforts,” Franken said in a statement to the Star Tribune. “But this costly backlog hasn’t been completely erased, Minnesota farmers are still frustrated, and I remain concerned about any unmet needs as we approach the harvest.”
Franken wrote to the Surface Transportation Board last week asking for a more aggressive approach to solving grain shipping problems.
“Many farmers still haven’t shipped their grain from last year, and have nowhere to store this year’s harvest,” he said in a letter. “Many shippers in Minnesota depend on rail service to get their goods to the Mississippi River, and then shipped on barges. The barge season ends with cold weather, and I’ve heard from shippers who are concerned that they won’t be able to get their goods on the river before it’s too late.”
At a Wednesday hearing of the Senate Commerce Committee, Klobuchar warned that “as projections show more traffic on freight rail corridors in the coming years, the need to ensure reliable freight rail service can’t be just an afterthought. It must be a priority.”