August 27, 2014

27/08/2014: Oil shipments take precedence over grain in the mid-west

Oil is out-competing grain for rail transportation in parts of the USA as farmers face a crisis of not being able to move their grains to market. 

It is calculated that the delays are already resulting in million of US$ of losses and slowing production for some breakfast cereal manufacturers such as General Mills. There is a general fear the export markets might be forced to look elsewhere for supplies if rail shipments don't get through to ports in a timely manner.
Are railways favouring oil orders over grain orders?

With record soy and wheat crops coming off the farmland throughout the mid-west, harvested grain is piling on the pressure for a workable solution to be found. Farmers believe the situation can only get worse before it gets better.

Some farmers are predicting that if they can't get harvested crops into store then it will rot in the fields. The problem is particularly pronounced in North Dekota where oil is beginning to overtake agriculture as the number one contributor to the state's GDP. Trains have traditionally moved the state's harvested crops to ports in place such as Portland, Seattle and Vancouver and from where it meets the demand for grains from the Pacific and Asia. Grain from this state also goes into east coast ports of Albany by trail and is then shipped on to Europe.

Read more HERE.

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