(The following article by Jerry Perkins was posted on the Des Moines Register website on November 20.)
DES MOINES, Iowa — Farm cooperatives and grain processors across the nation are wrestling with a shortage of railroad grain cars this fall because of the record U.S. corn harvest and rising demand overseas for American farmers’ wheat and soybeans.
In Iowa, grain shippers this week said the delays have not caused serious problems for them.
Jim Penney, general manager of the Heart of Iowa Co-op in Roland, said his cooperative is waiting one to two weeks for empty 100-car grain trains to arrive on the Union Pacific Railroad tracks there.
“We’re not too bad off,” Penney said. “The Union Pacific is doing what it can.”
Most of the corn shipped from Heart of Iowa goes to Cedar Rapids for processing or to the southwestern United States for livestock feed, Penney said.
Jon Setterdahl, grain marketing manager at Farmers Cooperative in Farnhamville, said the delivery of empty rail cars has been delayed a week to 10 days by both the Union Pacific and the Burlington Northern Santa Fe Railroad.
“It’s something we have to plan around, but it hasn’t caused us any major problems,” Setterdahl said.
He said rail cars started becoming scarce during the summer when a larger-than-expected wheat harvest caught the railroads by surprise. Unexpectedly large exports also have kept rail cars scarce this fall.
Ron Heck, a soybean farmer from Perry who is president of the American Soybean Association, told Bloomberg News that record soybean exports are straining the grain transportation system.
“We’ve had big week after big week after big week,” Heck said.
Frank Sims, vice president of transportation for Cargill Inc. of Wayzata, Minn., the world’s largest agricultural company and the second-biggest soybean processor, said the transportation crunch “happens every harvest, but it feels a bit more severe this year. It’s affecting the whole industry.”
Grain analysts told Bloomberg News that demand for corn, the nation’s biggest crop, has been fueled by a weak dollar that makes the grain more attractive for buyers in Asia and Europe. In addition, rail cars are in shorter supply this fall because railroads and leasing companies that own rail cars have taken their older cars out of service in recent years.
U.S. corn exports in the year that began Sept. 1 are projected to be 18 percent greater than the previous year’s. The U.S. Department of Agriculture projects that U.S. farmers will sell 1.9 billion bushels of corn abroad, compared with 1.6 billion bushels a year earlier.
The large corn harvest this fall has filled bins at grain elevators and forced many of them to store corn on the ground. That adds urgency to the need for rail cars, because grain stored in the open can diminish in quality.
At the Western Iowa Cooperative in Hornick, grain department manager Greg Eskelsen said the co-op uses 100-car grain trains and has experienced only minor delays. Most of the co-op’s corn goes west for livestock feed, and soybeans head south to Mexico.