August 23, 2017

Soy Transportation Coalition Issues Report Card On 2016 Railroad Performance

Agricultural shippers rated the performance of the nation’s seven largest freight railroads in the seventh annual Soy Transportation Coalition (STC) Railroad Report Card. For the fifth time, Union Pacific was regarded as the top performing railroad. Survey respondents ranked Canadian Pacific in last place for the sixth year in a row.The survey was completed anonymously by agricultural shippers of various sizes and scale of operations. The number of respondents has been largely consistent over the past seven years.

For the 2016 report card, the survey period was adjusted to encapsulate the entirety of the key September to March time horizon during which a high percentage of the U.S. soybean and grain harvest is transported. Questionnaires were disseminated in April and were completed and returned by the end of June. As a result, the report card better reflects the performance of railroads in accommodating a higher percentage of the 2016 harvest. The survey period for the 2015 report card was September through November.

The survey has been comprised of the same eleven questions since the report card’s inception. The questions are categorized under: 1.) On Time Performance; 2.) Customer Service; and 3.) Costs. For most questions, participants were asked to rate each of the seven Class I railroads on a scale from 1-10 with ten being the highest and one being the lowest.

After combining the results from the eleven survey questions, Union Pacific received the highest overall rating. The company ranked first in seven out of the eleven questions. Canadian Pacific, rated as the lowest performing railroad, received a last place ranking in eight of the eleven questions.

Soy Transportation Coalition Rail Customer Satisfaction Index – Overall Ratings:

1.) Union Pacific Railroad
2.) Norfolk Southern Railway
3.) CSX Transportation
4.) BNSF Railway
5.) Canadian National Railway
6.) Kansas City Southern Railway
7.) Canadian Pacific Railway

“Railroads are critical for transporting our soybeans and grain to domestic markets and export terminals,” said Gerry Hayden, a soybean farmer from Calhoun, Kentucky and chairman of the Soy Transportation Coalition. “Without a cost-effective and reliable rail system, agriculture will fail to be profitable. The STC’s annual Railroad Report Card is designed to help assess the performance of railroads in meeting the needs of their agricultural customers. The feedback
expressed in this year’s report card suggests railroads are doing some things right, but that there are a number of opportunities for improvement.”

Agricultural shippers via survey responses and verbatim comments expressed a degree of satisfaction with the condition of the rail network and the ability of a number of railroads to accommodate the historic 2016 harvest. Overall, the rail network was described as well capitalized with available capacity.

Survey respondents overall expressed some frustration with rail rates many consider an increasing obstacle to agricultural competitiveness. Many continue to assert that a number of agricultural regions – due to a lack of proximity to competing railroads or the inland waterway system – are assessed rates that challenge their profitability.

BNSF Railway received notably lower scores from the previous year – particularly providing service commensurate with its cost. Many agricultural shippers cited weather related challenges throughout the northwestern corridor that significantly impeded the railroad’s ability to effectively transport soybeans and grain from states like Minnesota, North Dakota, South Dakota, etc. to export terminals in the Pacific Northwest.

“Survey respondents continue to express concern with the performance of Canadian Pacific,” said Mike Steenhoek, executive director of the Soy Transportation Coalition. “We are encouraged that the new leadership of Canadian Pacific has emphasized outreach to their key customers, including agriculture. We are hopeful this increased customer engagement will translate into rail service soybean and grain shippers require to remain profitable.”
In March, the former CEO of Canadian Pacific became the new CEO of CSX Transportation.

While the report card’s survey period occurred prior to CSX’s new leadership, agricultural shippers are concerned that the service recently experienced by Canadian Pacific will be replicated at CSX.

“Whenever new management is installed at a company, sometimes the owners and shareholders benefit, sometimes the customers benefit, sometimes it is a combination of the two,” explained Steenhoek. “Agricultural shippers are concerned that the new operations approach being instituted at CSX will primarily benefit the owners of the company, rather than the customers. We are hopeful that future changes at the railroad will benefit both.”
Class I railroads are the largest railroads in the country with an annual operating revenue exceeding $458 million.

Seven freight railroads are classified as Class Is: BNSF Railway, CSX Transportation, Kansas City Southern Railway, Norfolk Southern Railway, and Union Pacific Railroad. Canadian National Railway and Canadian Pacific Railway are also considered Class Is due to their significant trackage lines in the United States.

The full results of the survey, including a copy of the questionnaire, can be accessed at www.soytransportation.org

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Sugar Policy Takes Center Stage at House Ag Hearing

All eyes in the sugar industry may be on the International Sweetener Symposium this week, but before producers prepared for the convention, they took the time to address lawmakers during a recent Farm Bill listening session in Minnesota.

“We’ve got the lowest cost food in the world and that benefits our economy and all of our people in America – all of our people,” said lender Howard Olsen. “A strong farm safety net, and a strong crop insurance program, are key components of keeping that low-cost food.”

Olsen works for AgCountry Farm Credit Services in Fargo, North Dakota. He was one of many local farm leaders who addressed the U.S. House Committee on Agriculture during a hearing in Morgan, Minnesota, on Aug. 3, which lasted more than 2 hours.

Brent Davidson, a farmer and chairman of the Minn-Dak Farmers Cooperative, a sugarbeet processing plant owned by 488 families growing beets on 100,000 acres, agreed. He said good trade agreements and maintaining a strong sugar policy are vital for the local community and the rural economy.

Sugar policy is designed to operate without taxpayer cost, but the loans it provides for sugar producers are essential to cash flow for operations and to help insulate domestic growers from the market-distorting subsidies of foreign countries.

Robert Green, who farms sugarbeets, wheat, soybeans and dry beans near St. Thomas, North Dakota, told lawmakers that local producers were nearly devastated after Mexico illegally dumped highly subsidized sugar on the market and depressed prices.

“Our growers cannot survive at this level,” said Green, who also serves as chairman of American Crystal Sugar Company, the largest beet sugar cooperative in the U.S. with around 3,000 farmer shareholders and 2,000 employees.

He praised Commerce Secretary Wilbur Ross and Agriculture Secretary Sonny Perdue, and the Agriculture Committee, for negotiating a deal to bring Mexico into compliance with U.S. trade law and stop the flood of subsidized sugar.

“We ask that this committee continue to express to the administration the importance of monitoring and enforcing those agreements,” he said. “With an annual economic impact of $5 billion, sugarbeet growing and processing is the lifeblood of the Red River Valley. I am a fourth-generation farmer and I am hopeful that with amended suspension agreements, and a strong sugar [policy]…that my children and grandchildren will have a future growing sugarbeets and an opportunity to continue the proud tradition of American Crystal.”

Kyle Petersen of the Southern Minnesota Beet Sugar Cooperative used his time to explain to lawmakers the importance of policies like crop insurance that help with farming’s unique risks. The co-op is comprised of more than 500 farm families.

“Farmers borrow more in one year to produce a crop than most Americans do a in lifetime,” he said. “Our growers, and our bankers, need strong risk management tools like crop insurance that are essential in order to secure operating loans to grow our crop.”

Petersen said more frequent and intense weather patterns, rising interest rates and production costs along with lower commodity prices, have increased risks and decreased incomes.

This, he concluded, necessitates a strong Farm Bill and a strong sugar policy.

Source: American Sugar Alliance

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Audio Highlights – Policy Makers and Influencers Gather for Farm Bill Listening Session at Farmfest in Minnesota

Eleven members of the U.S. House were on hand at Minnesota Farmfest on Thursday for the House Agriculture Committee’s latest Farm Bill listening session ‘in the field.’

At the head table in front of a full house, Committee Chair Mike Conaway opened the listening session by leading everyone in prayer.   Conaway

On a rare “cool” day for Farmfest in August, Ranking Member Collin Peterson noted the weather challenges that area producers have faced this growing season.  Peterson

South Dakota Representative Kristi Noem was in attendance to gather stakeholder input on farm bill policy ideas, and tax policy, too.  Noem

North Dakota Congressman Kevin Cramer shared his prior experiences regarding farm policy during the opening introductions.  Cramer

Minnesota Farm Bureau Kevin Paap was among the first speakers from the crowd to deliver a message to the lawmakers. He used part of his two minutes of comments to focus on trade.  Paap

Minnesota Farmers Union President Gary Wertish used his time at the microphone to stress the importance of health care reform for rural families.  Wertish

Harold Wolle, President of the Minnesota Corn Growers Association, told House members about the importance of trade to the region’s corn growers.  Wolle

Krist Wollum, President of the Minnesota Cattlemen’s Association, stressed the need for a more robust Foot and Mouth Disease Vaccine Bank. FMD was considered to be eradicated from the U.S. in 1929. It remains widespread in parts of Africa, Asia, South America and the Middle East, however.  Wollum

Livestock leaders are asking Congress to include annual funding of $150 million in each year of the five-year farm bill for a Foot-and-Mouth Disease Vaccine Bank.

On Saturday, members of the House Ag Committee will gather more input on the farm bill at a listening session in Modesto, California.

Following the listening session, Chairman Conaway and Ranking Member Peterson made the below remarks:

“Midwest agriculture is wide and diverse, and each sector faces different challenges and opportunities. I appreciated joining Ranking Member Peterson in Minnesota to hear directly from those most impacted by the farm bill about ways to improve economic conditions in farm country and all of rural America. I look forward to taking what we learned and using it as we continue crafting the next farm bill,” said Chairman Conaway.  

 

“Bringing the Agriculture Committee to my district, to Farmfest, gave members the opportunity to hear directly from Minnesota’s farmers about the challenges they face in this part of the country. The input we get from those who actually use farm bill programs will help the committee as we look to potential changes in the next farm bill. I appreciated seeing so many familiar faces and thank everyone who was able to join us today,” said Ranking Member Peterson. 

More information on the listening session including the archived video can be viewed here.

 

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