Agricultural shippers should not have to pay the price for increasingly unreliable railway service that is pushing American farmers and ranchers to the breaking point, Deputy Agriculture Secretary Jewel Bronaugh said Tuesday at an emergency hearing held by the Surface Transportation Board.
“USDA understands that with limited capacity, some traffic must be prioritized and reductions in the number of cars online may help the system move, [but] fertilizer and ag commodities are not the commodities to de-prioritize, especially as we now enter the growing season,” Bronaugh said in impassioned testimony before the board.
Farmers, she said, can’t move their crops, and livestock producers are struggling to feed their animals.
“Elevators are full and cannot purchase grain from farmers, and livestock operators are unable to get the grain they need for feed,” she said. “We’ve even heard that some producers have been so close to being unable to feed their livestock and poultry that they’re preparing to depopulate their animals. That’s something a farmer should never have to do.”
It’s not just the ranchers that are in danger of losing their livelihoods, Bronaugh stressed. Even if farmers get the railcars they need, they are being forced to pay exorbitant freight rates.
“Ag shippers are paying thousands of dollars extra per car just to get service, easily representing a 50-100% increase in costs,” she said.
It’s an unsustainable situation that has international repercussions, but also reaches all the way to consumers pushing their carts down supermarket aisles.
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“Because ag shippers operate on thin margins in hyper-competitive global markets, efficient and reliable rail service is essential,” she said. “When railroads charge unreasonable rates and provide poor service, farmers struggle to make ends meet, consumers pay higher prices at the grocery store and the United States becomes less competitive on the global market.”
Even the USDA is being directly impacted. The increasingly unpredictable rail service is causing chaos for the Agricultural Marketing Service’s Federal Grain Inspection Service.
“Because the grain industry can’t track their trains in real time, companies are forced to guess when to request grain inspection personnel to arrive on site, resulting in changing start times and staff being placed on call for hours,” she said on the first day of the two-day hearing. “It is difficult to retain employees under such erratic conditions.”
Bronaugh finished her testimony by calling for significant reforms and advocating that the STB lead the industry through a “course correction.”
USDA, she said, “appreciates the board’s request that railroads provide detailed plans to improve service and share their expected timeline for recovery, and I encourage the board to collect weekly reports from the railroads to ensure they follow through with those plans.”
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