(The following article by Jo Dee Black was posted on the Great Fall Tribune website on September 23.)
GREAT FALLS, Mont. — Burlington Northern Santa Fe Railway will reduce freight rates for wheat shipped from 52-car elevators, a move applauded by grain groups throughout the state.
“We are pleased because the current rate puts the 52-car elevators at such a disadvantage all producers would be forced to haul grain to the larger 110-car shuttle loaders,” said Dan Kidd, a Big Sandy-area farmer and member of several state grain organizations.
In June, BNSF announced the 26-car rate would apply to 52-car trains, making it cost 15 cents per bushel more to ship wheat from those elevators than from 110-car shuttle loaders.
Traditionally the difference in cost has been about a nickel per bushel.
The revised 52-car rate, effective Oct. 1, will be $200 per railcar more than the shuttle loader rate, or about 5.8 cents more per bushel of wheat. The rate applies to trains from Montana, North Dakota, South Dakota and Minnesota headed to the Pacific Northwest.
“These rates will apply for wheat shipments for at least one year,” said BNSF spokesman Gus Melonas.
Four state farm organizations and the Montana Wheat and Barley Committee members asked railroad officials to take a second look at the rate increase, Kidd said.
“Their people took our concerns and went home with them,” he said. “They studied the logistics of where the 52-car elevators are, where the shuttle loaders are.”
If farmers pass by 52-car elevators for better prices at 110-car shuttle loaders, the state will lose competition in the grain market, Kidd said.
Montana has roughly 10 shuttle loaders.
Northcentral Montana is home to the bulk of the state’s three dozen 52-car elevators, with sites in Great Falls, Big Sandy, Fort Benton, Carter, Chester, Conrad, Cut Bank, Fairfield, Joplin, Rudyard and Denton-Geraldine. Many are on branch lines that hook into the railroad’s mainlines.
“There is not enough capacity on the Hi-Line to handle all the grain in the shuttle loaders,” he said. “Those 52-car elevators handle a lot of grain. This (the rate increase) was the wrong thing to do at the wrong time.”
Shuttle loaders already are pressed when handling grain deliveries, Kidd said.
“The market rises and producers all sell into it and in the past some shuttles have been very congested with long lines,” he said. “You deliver your load, turn around to get more grain then go back to wait in line again.”
Some farmers would face longer drives to make deliveries to shuttle loaders if 52-car elevators close, said Sen. Conrad Burns, R.-Mont.
“With fuel prices as high as they are, farmers just can’t bear that burden, and the impact on local county roads could have been severe,” Burns said.
Kidd said the 52-car rate is just one of several railroad issues the farm organization consortium is concerned about.
Members of the consortium are Montana Farm Bureau Federation, Montana Farmers Union, Women Involved in Farm Economics and the Montana Grain Growers Association, along with the Montana Wheat and Barley Committee.
“We have a dialogue going, I can’t comment on what those are,” he said. “They are looking at some other issues we’ve brought up.”