Ag prices and rail backlogs

One of the keys to effective commodity marketing is getting the commodity where it needs to be on time. Minnesota farmers have had trouble getting their crops to market because of rail delays this year, and the effect is costing them, and those who depend on the farming economy.

The Minnesota Department of Agriculture released a U?of M report on Thursday indicating that the state’s farmers have lost nearly $100 million because of rail delays that have made it difficult to deliver grain to waiting customers.

According to the study, by Edward Usset of the U of M’s Center for Farm Financial Management, corn growers lost $72 million from March to May, while soybean growers lost $18.8 million, and wheat growers lost $8.5 million.

Farmers operate on a tight margin. The losses, averaging 30 cents per bushel for corn to 40 or 41 cents per bushel for wheat and soybeans, could be the difference between profit and loss. And communities that depend on the farm economy feel the loss just as much as the farmers do.

We realize the rail industry can’t ship everything to everywhere at once, but we would hope it is devoting more of its resources to clearing up this backlog and giving grain shipments the cars needed to get farm commodities to market in a timely manner.

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