Midwestern Senators Hammer Railroads at Hearing

12:08AM Sep 11, 2014
train with oil cars in minnesota august 2014
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Sen. Heidi Heitkamp says farmers have been "tremendously patient" about rail delays, "but that patience is wearing thin."

The North Dakota senator came to Wednesday’s hearing about the Midwest’s rail crisis armed with farmers’ stories and a healthy dose of righteous anger. "This isn’t about just who gets preference [on the tracks] and who’s getting their feelings hurt," Senator Heidi Heitkamp (D-N.D.) told the Senate Commerce Committee. "This is about the very real economic consequences about what is happening in farm country."

Heitkamp and others spoke during a 2.5-hour Senate Commerce Committee hearing on the state of the country’s freight rail service. Farmers and other shippers have been plagued by railroad delays, thanks to last year’s harsh winter and the ever-increasing amount of oil coming from North Dakota’s oil patch. As crop experts suggest the U.S. will harvest bumper crops of corn and soybeans this year, farmers and others in the agricultural community have only grown more worried about the unreliable and expensive transportation situation.

"Time is a critical factor, because we are in harvest right now," Senator John Hoeven (R-N.D.) reminded the committee.

After Senator Jay Rockefeller (D-West. Va.) illustrated the impact of rail shipment delays with a photo of wheat piled on the ground, Heitkamp pointed out that not all crops are so tolerant of indefinite storage. "We’re looking at wheat here, but soybeans denigrate very quickly and we’ve got to get them to market. So as dire as that photo is [and] as dire as that pile of wheat is, if those were soybeans, basically what you’ve done is condemned that crop."

Many farmers are already bracing for financial hits. "I talked to a Minnesota farmer yesterday who told me that his basis adjustment on his corn brings him down to $2.25" per bushel, which is significantly below his $4 per bushel cost of production, Heitkamp said. "At least $1 of that is transportation."

She told of another conversation with a small group of farmers and agricultural shippers. The six told her "they collectively had a half-million dollar loss to their bottom line because they have not been able to move crops" in a timely way.

It could be far worse. Senator Amy Klobuchar (D-Minn.) highlighted a University of Minnesota study that suggested her state’s farmers had lost millions between March and May of this year due to rail delays. How many millions? $72 million for corn farmers, $18.8 million for soybean producers, and $8.5 million for wheat growers.

That’s just Minnesota. "Our producers have been tremendously patient about what they are willing to understand, given the tremendous infrastructure demands in North Dakota, but that patience is wearing thin," Heitkamp warned.

From the contentious tone of the hearing, it seems that farmers’ senators might be feeling the same way. After Ed Hamberger, the president and CEO of the Association of American Railroads, said that rail companies had invested $26 billion last year on railroad improvements, Senator Maria Cantwell (D-Wash.) publicly questioned his numbers. "I don’t believe your investment figures are sincere figures," she said. "You are making a ton of money, and what is happening is people are losing their jobs and their products can't get to market."