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Nov. 17, 2022 AgWeb.com reports: Harvest in Iowa is nearing the finish line. As the monster corn crop continues to pile up in the eastern part of the state, there are renewed concerns about what a possible rail strike could mean for the grain industry and fertilizer needs this fall. "By and large, we're on the short rows, so to speak, of harvest here. There are a few areas still wrapping up," says Matt Carstens, president and CEO of Landus Cooperative, a farmer-owned co-op with a large footprint in Iowa. As harvest wraps up and the focus shifts to fall fertilizer, Carsten says the low Mississippi River is placing more pressure on rail this fall. "The weakness of that system is so fragile. One person not showing up has a ripple effect for what could be days on a unit train coming to see us or leaving our facilities," Carstens says. Grain handlers and input suppliers across the country are concerned about what the potential crisis on the nation's railways could mean for business and for farmers. "If you're not getting movement on the river system, or those freights get high enough, which they are, you see a switch to rail, which puts more pressure on the rail infrastructure," he adds. The proof is showing up in freight costs. As demand has surged for rail cars, the National Grain and Feed Association (NGFA) says the cost of rail freight has skyrocketed. "We're hearing secondary rail freight rates on a railcar are running around $1,500 to $2,000 a car right now. I think that number was around $150 a car at this time last year," says Mike Seyfert, president and CEO of NGFA. The cost to ship via rail has jumped 13 times from where it was last year, and the reliability of that vital shipping vein continues to be in limbo due to a looming strike. "There was an agreement that was reached and announced back in September. With the Biden administration, we're working with the railroads and the unions to get that deal, but all 12 unions have to ratify," Seyfert explains. Just this week, a third union voted to not ratify the deal, putting the future of a final rail agreement at stake and increasing the chances of a rail strike. The original date the rail workers could strike was Nov. 19, but just last week, a group representing major railroads, as well as one union that already voted to reject the new contract, agreed to push that potential strike date back to Dec. 4. While this gives the groups more time to reach a new agreement, it also places more pressure on Congress to step in and prevent the nation's railways from a stoppage, but some fear it's just kicking the can down the road as concerns over transportation heat up. "You add that threat with low river levels, and, no pun intended, it could be a perfect storm if things don't go the right way quickly. With the freeze coming in, a bunch of rain really isn't going to help us at this point get those river levels up," Carstens says. To read the entire report click here. Tweet |
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