Farmers Could Lose up to $100,000 in Transportation

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This year farmers have grown a monster crop of corn and soybeans, which isn't just causing headaches over prices - there's also logistics to be worried about.

The American Soybean Association has spearheaded efforts to ensure equitable treatment of crude oil and commodities on American railroads this year, given the glut of cars transporting Bakken crude out of North Dakota.

Closer to home, Soy Transportation Executive Director Mike Steenhoek also acknowledges the logistical challenge posed by this year's crop, pointing out that the railroads are still upgrading the infrastructure in the wake of the North Dakota oil boom.

"So you have this increase of demand, chasing after this scarce rail supply. In 2009 U.S. railroads transported 11,000 carloads of crude oil. In 2013 U.S. transported 400,000 carloads of crude oil." He says, "And so, none of us really expected this dramatic increase in crude oil production. No one had a full appreciation for it. And so, you know, railroads, understandably, are playing catch up to this."

Unfortunately, upgrading American railways is a lengthy and costly process, and not much progress will be completed before harvest this year. Steenhoek estimates individual farmers could lose up to $100,000 this year alone, simply because they can't get their crop where it needs to go.

He says, "You've got this, significant volume of production, trying to fit in to a very limited rail supply and so what's going to happen is farmers are going to be effected negatively with the price that they are offered at their point of delivery."


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