Iowa Soy Transportation Coalition executive director Mike Steenhouck says one reason is because there simply are more engines to pull the freight.
Steenhouck says the railroads responded to the increase in demand the last few years by adding more engines, track and personnel to increase their capacity.Steenhouck says grain elevator managers are reporting no unexpected delays this year with rail service. He says that was not the case during the first six months of last year, when there were some anxiety and frustration among rail customers for the lack of rail service.
Steenhouck says higher oil prices played a role in recent rail shortages. “One of the contributing factors of that was the exponential increase in crude oil production and subsequent to that — crude oil transporting. That has abated a bit over the last year,” Steenhouck explains. The lower prices have slowed down the activity from the Bakken oil fields of North Dakota and the need to ship oil from those fields.
The third reason for the smooth transportation of commodities this year is the fact farmers are holding their grain. “Interestingly, one of the reasons that transportation is operating at a high capacity this year, particularly railroads, in part is because of what the railroads have done — but also what farmers are not doing — which is unleashing what they’ve grown onto the rail network,” Steenhouck says. He says lower commodity prices have farmers in a waiting mode.
“Farmers are electing to store a higher percentage of their crop — not only with corn, but also with soybeans — because they are waiting for a more opportune time to sell,” according to Steenhouck. Smaller amounts of oil, corn and soybeans being shipped means the rain lines are not being flooded, therefore an adequate supply of locomotive engines and rail cars are now available to transport the grain that is being marketed.
(Reporting by, Dennis Morrice, KLEM, LeMars)