NCGA, Ag Transportation Working Group Voice Concerns over Transportation Issues to USDA (8-31-06)

The National Corn Growers Association (NCGA), as part of the Ag Transportation Working Group, urged U.S. Department of Agriculture Secretary Mike Johanns to address serious transportation challenges on behalf of the agriculture industry.

In a letter to Johanns, NCGA and the coalition maintained USDA must play a lead role in shaping the outcomes of key transportation issues and policies in order for the United States to remain competitive domestically and in the world market.

“Transportation is important to agriculture, producers and rural America, and that is what we wanted the letter to Secretary Johanns to emphasize,” said Ken McCauley, NCGA vice president. “We need efficient and cost-effective transportation to keep our products moving domestically and internationally. This isn’t just about agriculture; transportation problems impact all businesses and consumers.”

The letter also cited inefficiencies with all transportation modes, including strained capacity, increasing rates for rail service, declining barge efficiency because of outdated locks and dams and congested roadways.

“These factors are being reflected in considerably weaker cash basis levels, with the obvious negative impact on farm-gate prices,” the letter stated. “Transportation constraints also threaten the growth of the renewable fuels industry. The current infrastructure appears ill-equipped to handle the potential volume increases expected to be generated by the ethanol and biofuels sectors.”

In addition to the overall impact of transportation problems, the letter pointed out two important issues: an upcoming Surface Transportation Board (STB) proceeding on small rate cases; and the need for quick passage of the Water Resources Development Act (WRDA), which provides lock modernization on the Upper Mississippi River system.

The Ag Transportation Working group urged USDA to be “an active participant” in the STB small rate case proceedings, to stand behind the broad interests and to submit comments on this important issue. NCGA has notified the STB of its intent to submit comments as well.

The Senate-House WRDA conference report is expected to get under way officially in September with the hope of final passage before Congress recesses before elections.

McCauley noted higher transportation costs will continue to hinder agriculture’s competitiveness nationally and in highly competitive export markets.

“The availability of transportation at an equitable price is vitally important for agriculture producers and businesses that rely on shipping,” he said. “The high transportation costs can result in a domino effect with producers receiving low prices for their product, which then would result in lower income and ultimately negatively impacting rural communities and their economies.”

The Ag Transportation Working Group was created as a forum to discuss critical transportation policy issues affecting U.S. agriculture and share perspectives on policy priorities and needed changes to maintain U.S. agricultural competitiveness.

To view the letter in its entirety, please click on link.