08/01/2015: Analyst says US grain train movement could improve

A decline in Bakken oil trains isn’t likely to spell good things for grain farmers, according to rail observers, the Dickinson Press reports.

Getting grain on trains has been a struggle for Montana’s US$1.5 billion wheat economy for more than a year, during which time critics have faulted Burlington Northern Sante Fe for leaving grain at the station while hauling more than a half-million barrels of oil daily. Similar grain loading complaints have echoed across the Upper Midwest.

Now oil production is seemingly poised to plateau with the number of active drilling rigs in North Dakota falling by 14 in the last three weeks and the price per barrel for oil hitting a five-year low Monday.

However, a slowdown isn’t likely to free up the rails for grain, analyst Terry Whiteside told farmers gathered Tuesday in Billings.

“You would think it would,” Whiteside said. “However, they are telling me in Wyoming they have not found as much oil through horizontal drilling in as they have in the Bakken and that’s probably all going to go westbound. I don’t see it lightening up very much, and then if coal comes on. We’ve just got a very tight capacity problem for a while.”

Whiteside does rail research and lobbying for several state grain commissions.

He said the key to improving rail traffic would be getting railroad companies in the Pacific Northwest to share infrastructure in order to move grain better. Both the BNSF and Union Pacific have rail lines running along the Columbia River. If they would agree to run Pacific-bound grain trains down one track and return trains up the other, grain traffic would improve, Whiteside said.

In the past year, grain shipments from northern states have arrived to port several weeks to more than a month late. Oil shipments have taken some of the blame, but so have bad weather and construction delays. Speaking to farmers Tuesday during the 2015 Barley Symposium, Whiteside dismissed weather and construction as causes for delay and put the blame on oil.

Another consultant disagreed saying shipping conditions have improved for wheat, but oil hasn’t played a role, according to  Lochiel Edwards of TTMS Group, which does rail consulting and trade organization representation for farm commodity groups.

Conditions have improved for 100-plus car grain trains because there isn’t as much corn being shipped from the Midwest to Pacific Northwest ports. Corn

Read the article HERE.

 

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