(The following story by Lauren Donovan appeared on the Bismarck Tribune website on August 8.)
TAYLOR, N.D. — North Dakota’s great grain harvest is waiting for a train.
Regional elevator managers are dumping wheat on the ground this week. Their behemoth concrete silos are full to the top, while the BNSF Railway is running days behind schedule.
This year’s wheat crop is ranging from record-breaking yields to above average, and many farmers are selling immediately at harvest. The price is strong at $5.60 a bushel and a lot of producers need cash now to catch up on last year, when there was virtually no crop for many of them.
The situation is frustrating to the elevator managers who booked trains months ago, only to find themselves looking out at empty tracks.
At Sterling, South Central manager Jeff Mehl said harvest is just getting into full swing east of Bismarck.
He said the terminal’s already plumb full at 550,000 bushels, and he’s been forced to dump 165,000 bushels on the ground.
A train called for Monday didn’t show, and its arrival is not even indicated on BNSF Railway’s Web site, meaning it’s another three to five days out, at least.
Mehl said he’ll stop taking wheat when he’s got 400,000 bushels on the ground. That’s already $2.4 million worth of grain sitting outside, prey to whatever the weather and markets might do, besides draining the elevator’s cash reserves until it can get the wheat loaded out and sold.
“That’s enough risk,” he said.
Kevin Kaufman, BNSF group vice president, said the average train delay in North Dakota is five days and harvest pressure may extend that to 10 days before easing back.
He said trains are not considered “late” until after the 10th day, when penalties kick in.
He said BNSF has taken measures to improve service after two years ago, when trains were running 30 days late and longer. Those measures included adding more cars, getting trains turned around more quickly and changing the car ordering system.
Over at Taylor, Southwest Grain Terminal manager Jim Bobb is in the same shape as Sterling.
He’s got 2 million bushels in storage now, all he can put inside. He started dumping on the ground Monday.
When grain trains arrive, they take out 400,000 bushels, so he’s got five trains ready to go. A train pulled in Sunday, a week later than its “want date” and he isn’t sure when the next one will pull in. Bobb said he needs a train every two to three days through August to keep up.
“Everyone is in the exact same position,” he said. He said BNSF’s practice of giving a 10-day window of arrival, rather than a scheduled date, gives the carrier a lot of discretion. “Ten days is a long time at harvest,” he said.
Cleve Teske, assistant grain manager at Scranton Equity Elevator, said the Scranton area is in the heart of harvest with the first BNSF train expected Friday now expected at the end of the 10-day window. With harvest earlier than expected, buyers on the West Coast end are scrambling to get freight ships in, he said.
“Things are backed up and stacked up,” he said.
He said the elevator’s spring wheat storage of 1.3 million bushels filled over the weekend, and farmers will have to store in bins or on the ground. The elevator doesn’t dump outside.
Teske said the delay is no big surprise and having a large quantity of high quality grain is a good problem to have.