USDA: Transporation Costs Most to Blame for Ag Losses | KBIA

USDA: Transporation Costs Most to Blame for Ag Losses

Mar 6, 2015

Credit Cade Cleavelin / KBIA

Farmers in the upper Midwest lost about $570 million last winter. The U.S. Department of Agriculture blames most of those losses on transportation.

With record grain harvests in 2013 and a nearly exhausted railway network, farmers in the Upper Midwest had to dig deep to move their wheat, corn and soybean crops. Low grain prices, a harsh winter and stiff competition on the railway all exacerbated the problem.

Charlie Kuskie is an agriculture commodity broker in Nebraska. He says the burgeoning frack sand and oil industries were snapping up space on the rails making it more difficult for farmers to grab a spot.

“It wasn’t necessarily that we didn’t have the rail cars, it’s that we didn’t have the engines to pull them all. So when the engines are all pulling oil tankers, we don’t have them to pull grain trains,” Kuskie said.

Cold temperatures also forced railway operators to trim train lengths by as much as half.