NCGA Urges More Reliable, Affordable Grain Transportation (11-2-06)

The National Corn Growers Association (NCGA) cited much-needed improvements in capacity and the high cost of shipping grains as key transportation problems in comments to the Surface Transportation Board (STB), which is holding a hearing today on the issue of rail transportation of grain.
 
NCGA President Ken McCauley said the cost to harvest and market this year’s crop is on the minds of all corn growers.

"We appreciate the STB for taking a serious look at rail transportation problems facing grain producers,” said McCauley.
 
According to the U.S. Department of Agriculture (USDA), corn growers can expect another near-record crop – 10.9 billion bushels. To market corn and corn coproducts successfully, growers and the agriculture industry depend on a strong and financially viable rail network as part of the U.S. transportation system. In the comments, NCGA stressed producers need reliable, cost-effective and efficient transportation for their products. Otherwise, the ability to keep and expand into markets is weakened.
 
Furthermore, NCGA warned that capacity constraints could threaten the growing biofuels industry. 

“Current infrastructure appears ill-equipped to handle the potential volume increases expected to be generated by the ethanol and biofuels sectors,” McCauley said. “The ability to take advantage of growing opportunities for agriculture producers will be severely constrained if transportation infrastructure is not improved.”
 
NCGA also urged the STB to finalize its decision to mandate that fuel surcharges must be reasonably related to additional fuel costs and rail carriers must be transparent in their actions. The comments also re-emphasized the need for improved small-rate case procedures.
 
However, McCauley warned that corn producers’ competitive advantage is slipping because of several troublesome transportation issues.

“Strained capacity in all modes of transportation, increasing rates for rail service, declining barge efficiency…significantly affect the ability to market corn and corn by-products,” McCauley said. “These factors are being reflected in considerably weaker cash basis levels, with the obvious negative impact on farm-gate prices.".
 
To view the comments in their entirety, please click here.