Report Highlights Benefits of DM&E Upgrade and Expansion, NCGA Notes (11-3-06)

The National Corn Growers Association (NCGA) applauds a report released by the U.S. Department of Agriculture today highlighting the benefits to agriculture of upgrading and expanding the Dakota, Minnesota & Eastern (DM&E) railroad.

The report suggests corn growers in northern Corn Belt states will benefit from the rail competition and upgrades in track line, which will increase shipping efficiency and speed of delivery of goods.

“Northern corn growers and agriculture need the opportunity to create another Class 1 railroad to provide competition in the industry,” said Bill Chase, a South Dakota corn grower and chairman of the NCGA Production and Stewardship Action Team. “With projected shortcomings in rail transportation and limited availability to haul agricultural products, the upgrading and expansion of the DM&E is just the opportunity to alleviate those problems.”

The DM&E has applied for a $2.3 billion loan from through the Federal Railroad Administration’s (FRA) $35 billion Railroad Rehabilitation and Improvement Financing (RRIF) program. The RRIF loan will only be made if it can be repaid with interest. DM&E will privately fund the rest of the $6 billion project.

The DM&E upgrade project will rebuild 600 miles of existing DM&E track and add 260 new miles of main line construction to low-sulfur coal mines in the Powder River Basin of Wyoming.

The project would boost the speed of delivery of products into the Pacific Northwest. Old tracks prohibit the DM&E from delivering goods in the area in a quick and efficient manner.

“Too much time has been wasted on making a decision in whether to approve this or not,” Chase said. “Now it’s time to approve it and start building this railroad to provide service to captive shippers across the northern states. The bottom line is this project helps producers and local economies.”

The project would create an estimated 10,000 direct and indirect jobs. The DM&E plans to begin construction in 2007 and to be operational by 2010.

To view the USDA report, click here.