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Friday, May 16, 2014

Upper Midwest Farmers Face Weather And Rail Woes

An April rain shower makes a bold backdrop against the hay bales in this photo taken in Dickey County, North Dakota, April 6, 2014. (Krista Lundgren/U.S. Fish and Wildlife Service)

An April rain shower makes a bold backdrop against the hay bales in this photo taken in Dickey County, North Dakota, April 6, 2014. (Krista Lundgren/U.S. Fish and Wildlife Service)

Farmers in the Upper Midwest are having a particularly stressful spring. Planting has been delayed due to unusually cold and wet weather, as well as a fertilizer shortage stemming from snarled rail lines.

Those rail line problems — largely a result of the increased use of the rails to transport crude oil — are also causing other problems for farmers, delaying the transport of grains to market and straining storage facilities.

Farmers are lobbying for an expansion of rail lines, but any relief is likely several years away. Mark Watne, president of the North Dakota Farmers Union, discusses the situation with Here & Now’s Robin Young.


  • Mark Watne, president of the North Dakota Farmers Union.




Farmers in the upper Midwest are having a particularly stressful spring. They can't plant because the ground is still frozen and it's cold and wet. But there's also a fertilizer shortage because of backup rail lines. There's an oil boom in the Dakotas and that means train cars are filled with crude oil, which is also delaying the transport of crops. In all, the railroad jam has cost farmers almost $67 million in revenue, according to a study this month by North Dakota State University.

And yesterday, senators from Minnesota and the Dakotas sent a letter to the Surface Transportation Board, that's the agency at the Department of Transportation that regulates the rails, urging it to address the problems.

Mark Watne is president of the North Dakota Farmers Union. He's in Jamestown.

Mark, when did the problem with the rail start?

MARK WATNE: Well, this problem really started about maybe a year ago, when our production of crude oil continued to go through a great increase. And we've had such a tremendous output of oil and we have no real avenue to ship it out of North Dakota other than by rail. So oil appeared to get a little bit more priority than commodities and grains. So in January, we started seeing problems with elevators shipping out this last year's production.

YOUNG: So it's not just that you're not getting fertilizer in, you're not able to get your product out.

WATNE: Yeah, we're not able to get the grain out. And then, of course, we've seen that that issue was there so an immediate concern came early this spring, worried about whether the fertilizer would get here for planting our crops.

YOUNG: Yeah. Well, and so we understand that because the fertilizer isn't coming in you're not planting that. Of course, you have the weather issue too. You can't get the crops out so what's happening with the storage issues?

WATNE: Well, we're a little unknowing if they're going to get the fertilizer or not. But the Surface Transportation Board has been working with the railroad to ensure that it would come. It could be a benefit that we've had a little bit of a delayed spring allowing for some shipments to come in. But we really rely on the rail to supplement that inventory of fertilizer into the spring.

YOUNG: Well, we hear that there might be some movement in getting BNSF and Canadian Pacific to adjust their plans, so that you have more cars to take this crop out.

WATNE: Yeah, and that's, they're working on it. I want to give credit to BNSF that they put a plan in spending a lot of money here this year and then, of course, over five-year plan. I think they're looking at $5 billion of improvements to deal with the situation. That's all great and the farmers will appreciate that because we're going to have a probably a better system five years down the road.

But we're struggling a little bit with how we're going to deal with it in the short-term. And what happens is, is that the oil cars tend to always run. We don't know of any delayed oil cars, but we do see 40, 50, 60-day delays in grain cars. So they're still making a little more priority of one commodity over the other. And we think they're going to have to shift that thought process at least in the first couple of years here, to figure out a way to service both industries.

YOUNG: I'm wondering, Mark, what kind of tension does that to? You know, you're sitting right next to each other in the diners, I'm presuming. You know, people who are now working in the oil industry, and people who are longtime farmers, what kind of tension is that?

WATNE: Well, it gets pretty intense. I've been able to sit and talk to some of the BNSF people. I've been with out at the Senator Hoeven's office and Senator Heitkamp has been there also, visiting with them. And we have very good dialogue. They get a little frustrated with us when we say they're making a priority of the oil and they say they're not. But we, of course, believe there is because there's no delayed oil cars which, from my perspective, would say that they are making a priority to oil.

So there's some tension in everything. But I have to say at least in BNSF, they've been to the table and they understand the problem, and they're trying to solve it. But I also think they might want to help us with this secondary market. So what we do is we go out and try to find other cars or other shipments ways to get our product out, because we have contracts, our elevators do, and they have to deliver by specific times.

So what it's doing is that loss of money is being put into the pricing of grain. So that's where this study at NDSU said this $66 million loss currently and potentially 95 million. While we think the rail needs to help us resolve that 'cause we can't just afford to continually lose dollars off the market price, simply because of logistics problems that is, in some respects, very good for the rail but very disadvantage to the farmers.

YOUNG: Well, so tensions over rail cars and whether the new booming oil industry or the longtime farming industry should get priority. But in the meantime, you've got the weather, not much that can be done about that. I know, you know, weather is always spotty but is this something that's particularly bad this year, something that's unprecedented?

WATNE: Well, it's been kind of a cycle event in that we've been relatively wet. But this year appears to be on a path to being quite unique, if you want to put it that way. Right now we are starting to see a bunch of days of sunshine, and we haven't had that for a while. We've got an excess amount of rain. But it did freeze still here last night. So our ground temperatures aren't warming up, and of course with the wet soil we can't drive our equipment out there.

So we're starting to get really borderline late, and if we could start going right now, and everybody could just go for a couple, three weeks, we'd probably be OK. But if - any more delays is going to put us into a real interesting scenario of not getting stuff planted timely.

YOUNG: Mark Watne, president of the North Dakota Farmers Union. We wish you well. We hope your season gets going.

WATNE: Thank you very much. Transcript provided by NPR, Copyright NPR.

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