News
12.01.2010
Soybean industry publishes report on impact of railroads
The United Soybean Board (USB) announced on Jan. 11 that the Soy Transportation Coalition (STC), with funding from the soybean checkoff, recently published "Railroad Movement of Soybeans and Soy Products," a comprehensive report that sheds light on the role railroads play in the soybean industry.
USB said the study includes findings on the volume of soybeans, soybean meal and soybean oil moved by the rail industry; the leading destinations for those products; and the revenue and rates associated with those movements. The analysis specifically focuses on the volume of soybeans and soy products that are transported at potentially excessive rates, those states whose soybean industry is most dependent on rail and those railroads that transport the highest volumes of soybeans and soy products, USB said.
"The soy producer pays the freight in and out," said Roy Bardole, vice-chair of the USB International Marketing and Global Opportunities programs and a soybean farmer from Rippey, Iowa, U.S. "We understand that, and that’s OK, as long as we aren’t being singled out and have to pay more than our fair share. The study looked at who pays, how much do we pay, is what we pay fair and is it what everyone else is paying?"
The study found that 43% of rail movements of soybeans, or 9.2 million tonnes are transported at rates the U.S. Surface Transportation Board would classify as potentially excessive, resulting in a potential overcharge of $120 million in 2007, the board said.
"If you take $120 million in excessive charges and refund some of that to farmers you could make a difference to rural communities," Bardole said. "We’re concerned about that and talking with Class I rails, trying to reduce what we’re paying and make it a little more fair."
The report also shows that revenue among the largest Class I railroads from transporting soybeans and soy products has nearly tripled in 10 years, from $549 million in 1998 to more than $1.5 billion in 2008. BNSF Railway transports the largest volume of soybeans at 8.8 million tonnes in 2008. Union Pacific Railroad is the largest originator of soybean meal and soybean oil.
"The current and future vitality of agriculture is dependent upon a healthy, profitable rail industry," said Mike Steenhoek, executive director of the STC. "There needs to be a way for railroads and the soybean industry to achieve a better balance so that one is not profiting at the expense of the other."
World Grain
