July 28, 2014

ND Congressman Cramer Meets With BNSF President

Yesterday Congressman Kevin Cramer met with BNSF President and CEO Carl Ice to discuss what the rail company is doing to reduce ongoing delays of grain shipments in North Dakota. During the meeting Cramer pressed Ice on BNSF’s pledge to clear the backlog of last year’s crop before the new harvest begins, asked for a progress update on the company’s hiring of additional employees, and discussed the new rule for oil by rail shipments proposed yesterday.

“Given we are fast approaching the next harvest and the last report from BNSF still indicated a backlog of more than 3,900 cars, time is running out on their promise to have it cleared by then,” said Cramer. “During my meeting with Carl Ice I relayed my concerns as well as those I have heard from farmers and grain shippers across the state. He informed me BNSF has now completed more than 40 miles of double tracking between Minot and Glasgow as part of its $1 billion expansion in the northern region and is on track with their other planned improvements. I appreciate these efforts to ensure their system is in the best possible shape in order to move what appears to be another bumper harvest. We also discussed the proposed rule for oil by rail shipments released yesterday, which may have an impact on agriculture shipments.”

BNSF is engaged in a $1 billion expansion and maintenance program in the northern region. As part of this effort to grow capacity, they plan to complete 60 miles of double track between Minot and Glasgow by October.

Since June, BNSF Railway and Canadian Pacific Railway (CP) have been required by the U.S. Surface Transportation Board (STB) to publicly file weekly status updates on the backlog in grain shipments. The latest figures from BNSF show a total of 3,908 past due rail cars in North Dakota averaging 26.6 days late as of July 17, compared to the report last week which indicated 4,561 past due cars were averaging 30.2 days late. The CP report shows a total of 23,761 open requests in North Dakota with an average age of 10.72 weeks. The previous report showed 24,280 open requests with an average age of 10.14 weeks.


Several Ag Groups Join Letter On Disruptions In PNW Grain Inspections

The American Soybean Association and several other agricultural industry groups last week joined in a letter to U.S. Secretary of Agriculture Tom Vilsack, reemphasizing concern for the periodic disruptions in Official grain inspection and weighing services provided by the Federal Grain Inspection Service’s (FGIS) designated agencies in the Pacific Northwest.

Last October at a meeting with Grain Inspection, Packers and Stockyards, the groups urged that contingency plans be developed to ensure that FGIS respond immediately and effectively if there were any future disruptions in Official inspection service from WSDA.

“Our expanded stakeholder interest group now understands that on July 1, 2014, the designated agency – the Washington State Department of Agriculture – provided written notification that it was withdrawing Official grain inspection services at the Port of Vancouver, WA, effective July 7, 2014.  Based upon this unprecedented development, we urge you to direct that FGIS take immediate action to provide such Official inspection services utilizing either its own personnel or the personnel of another FGIS-designated agency authorized-  perform such Official services at grain export facilities,” the groups state in the letter.

The groups reemphasized that statute prohibits the export of U.S. grains and oilseeds unless Officially inspected and weighed by Official personnel in accordance with the Grain Standards and exports are required to be accompanied by Official certificates showing the Official grade designation and certified weight – unless such a requirement is waived by the Secretary of Agriculture and the grain is not sold or exported by grade.

“Thus, Congress has vested in FGIS the responsibility and obligation to provide vibrant and reliable Official inspection and weighing services to facilitate efficient and cost-effective marketing of U.S. grains and oilseeds to foreign markets, upon which U.S. agriculture and the American economy depend for economic growth and jobs,” the letter states. “To our knowledge, this latest announcement by a designated State agency declining to provide Official services is unprecedented.  We believe WSDA’s actions create an extremely troubling precedent that will cause irreparable damage to the integrity and reliability of the nation’s Official grain inspection system.  This development already has created uncertainty within the U.S. grain export industry regarding potential future disruptions of Official services at facilities operating at other U.S. export ports.  The disruptions that already have occurred have put at risk the United States’ reputation as a reliable supplier of grains and oilseeds to foreign customers.  In the absence of WSDA’s reliable performance of its duties, FGIS must intervene and make the necessary arrangements to provide the mandatory Official services.”

The letter concluded by underscoring the importance of accurate, timely and cost-effective delivery of mandated impartial third-party Official inspection services—depended upon by American farmers, grain handlers and exporters and foreign customers.

“To this point, confidence that the U.S. Official grain inspection system will function in a continuous and consistent manner – and not be subject to unwarranted disruptions – has been instrumental in facilitating the ability of U.S. farmers and agribusinesses to reliably serve foreign customers and remain competitive in world markets.  It has been a model of integrity,” the groups said in the letter, “But the recent decision by WSDA, and the subsequent inaction to this point of FGIS to fulfill its mandate to provide Official inspection services, risks sullying that hard-earned reputation, to the long- lasting detriment of U.S. agriculture.  It also sends a dangerous signal to any third-party that might wish to disrupt U.S. grain export trade.”

The letter, in its entirety, can be viewed here.


How Does USDA Compile Acreage and Planting Data?

Each year – the United States Department of Agriculture’s National Agricultural Statistic Service releases two official reports dedicated to corn and soybean crop acreage in the United States. There is a third - usual - update of the figures - too. The first report is a survey only report called Prospective Plantings. It is filed at the end of March. This is followed by the Acreage report at the end of June. There is also a potential update to the figures released in the October Crop Production report. The update - says Chief of the Crops Branch for USDA NASS Lance Honig – incorporates the acreage figures farmers file with the Farm Service Agency - or FSA

Lance Honig 1

The FSA numbers do not capture all the acres sown in the United States - however - they are a good guide post. The June Acreage report is a bit more encompassing. NASS directly contacts more than 70,000 farmers and asks them what they have planted - and what they still expect to plant. It combines these results with a second area based survey. NASS looks at 11,000 sites to see what has been sown. Honig says that’s like asking an additional 40,000 farmers what they planted. It makes the NASS figures the best available - he says - even if some point to other differing sources of information

Lance Honig 2

This year – USDA NASS calculates farmers have sown 91.6-million acres of corn and 84.8-million acres of soybeans. The corn acreage is down about four percentage points from last year and the soybean acreage is up 10-percent.