Rail service delays have led to lost sales and involuntary shutdowns at agricultural processing facilities across the upper Midwest, hurting agriculture producers who depend on reliable freight rail service to get agricultural exports to trading partners in overseas markets; despite these costs, no regional or national studies have been conducted to assess the economic impact of rail service delays
In a letter to the USDA secretary, the Senators requested a detailed economic analysis of the ongoing transportation challenges facing producers and agricultural end users in upper Midwest
WASHINGTON, DC – U.S. Senators Amy Klobuchar (D-MN) and John Thune (R-SD) today urged the U.S. Department of Agriculture (USDA) to study the economic impact of ongoing rail delays on the agriculture industry in the upper Midwest. Rail service delays have led to lost sales and involuntary shutdowns at agricultural processing facilities across the upper Midwest, hurting agriculture producers who depend on reliable freight rail service to get agricultural exports to trading partners in overseas markets. Despite these costs, no regional or national studies have been conducted to assess the economic impact of rail service delays. In a letter to USDA Secretary Tom Vilsack, the Senators requested a detailed economic analysis of the ongoing transportation challenges facing producers and agricultural end users in their region.
“Rail service delays have impacted a variety of industries, including agriculture, a critical economic driver in both of our home states,” the senators wrote. “We respectfully request that the USDA conduct a more detailed economic analysis of the on-going transportation challenges facing producers and agricultural end users in our region, including food processors, livestock producers, and ethanol refiners. We are hopeful that the information provided by this analysis will present a clearer picture of the challenges facing the agriculture industry as we work to help resolve them.”
Earlier this month, the Senators held a Senate Commerce Committee Hearing on rail service issues and delays. At the hearing, Klobuchar called on railroad companies to address the ongoing delays and highlighted the negative impact these delays are having on agricultural producers, energy consumers and Iron Range taconite plants. Also this month, Klobuchar urged the Surface Transportation Board to address the rail service delays and submitted testimony to a Joint Minnesota Senate-House meeting on rail congestion expressing concerns about the delays.
This letter expands on Thune’s efforts as the Ranking Member of the Commerce, Science and Transportation Committee to work with the Surface Transportation Board (STB) to hold railroads accountable for the backlog of railcars and locomotives in South Dakota. Through letters, meetings, hearings, and legislation, Senator Thune continues fighting on behalf of South Dakota shippers and is pursuing solutions to address the shortage of railcars and locomotives as we enter the fall harvest, which is projected to be record-setting. For a complete outline of Senator Thune’s work to reduce the rail service backlog, visit his website.
A copy of the senators’ letter is below:
Dear Secretary Vilsack:
We write today regarding the on-going rail service challenges currently facing a large part of the country, but especially the upper Midwest. As you know, these rail service delays have impacted a variety of industries, including agriculture, a critical economic driver in both of our home states. In fact, a recent U.S. Senate Commerce, Science, and Transportation Committee hearing, at which Mr. Arthur Neal, Deputy Administrator of the Transportation and Marketing Program at the U.S. Department of Agriculture (USDA) testified, highlighted the significance of this crucial issue to many of America’s producers and grain elevators.
While we understand that you have briefed the President on this critical rail situation, no regional or national studies have been conducted to assess the economic impact of these rail service challenges. However, a University of Minnesota report indicated that transportation bottlenecks cost the state’s farmers almost $100 million between March and May of this year. That report also suggested the potential for another $124 million in lost revenue due to lagging rail service.
While very useful, such reports tell only part of the story. Therefore, we respectfully request that the USDA conduct a more detailed economic analysis of the on-going transportation challenges facing producers and agricultural end users in our region, including food processors, livestock producers, and ethanol refiners. When completing this analysis, we request that the USDA also consider, as appropriate, commodity prices, food prices, and changes in agricultural exports. We are hopeful that the information provided by this analysis will present a clearer picture of the challenges facing the agriculture industry as we work to help resolve them.
We look forward to working with you on this important matter. Should you have any questions, please feel free to have your staff reach out to Adrian Arnakis on my Commerce Committee staff (202) 228-5388 or Danny Carlson in Senator Klobuchar’s office (202) 228-2186.
Sincerely,
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