11 October 2010

SD Farmers to Get More Money for Crops After Railroad Deal Makes it Easier to Ship West

Pierre South Dakota USA - Farmers in central South Dakota could get more money for their corn and soybeans by taking advantage of a new railroad partnership to send their crops west to Seattle, where prices are higher than in Chicago.
 
Under a deal between Burlington Northern Sante Fe Railway and Dakota, Minnesota & Eastern, Canadian Pacific, 110-car trains will be loaded with grain in Highmore and Harold. DM&E will take them to Wolsey, where BNSF Railway will take over, hauling them to the Port of Seattle.
 
The South Dakota Transportation Department estimated farmers could get 15 to 25 cents more per bushel for their grain because Seattle serves Asian markets, which pay higher prices for corn and soybeans than farmers have received in Chicago. Farmers previously either accepted lower prices in Chicago or paid higher trucking costs to deliver their grain to Wolsey and other points on the BNSF line.
 
The first shuttle train arrived Monday in Harrold, which is about 30 miles northeast of Pierre, the state's capital city.
 
"It's a big deal," Todd Yeaton of Highmore, chairman of the South Dakota Railroad Board, told The Associated Press.
 
The economies of Harrold and Highmore will benefit from the extra income farmers receive, Yeaton said.
 
The improved shipping also is expected to encourage farmers to plant more corn and soybeans, replacing wheat and sunflowers. Corn and soybeans require more management, which means local businesses will sell farmers more fertilizer and other chemicals, he said.
 
Area trucking companies also will earn money hauling the grain to the railroad, and Yeaton said he expects them to spend in the two towns.
 
"It's going to make a big difference with a lot of money getting invested. A lot of farmers are going to benefit and a lot of towns are going to benefit from it," Yeaton said.
 
The arrangement between BNSF and DM&E was made possible by the 2005 sale of South Dakota's 369 miles of core rail line to BNSF. South Dakota rescued the core line from abandonment in 1980, but sold it to BNSF after extensive negotiations. One of the provisions of the sale was that other railroads could use BNSF track for shipping.
 
Under that provision, two shortline railroads in southeastern South Dakota already have been using BNSF track to move grain to the Union Pacific in Sioux City, Iowa.
 
State Transportation Secretary Darin Bergquist said the 2005 deal BNSF was difficult to negotiate, but he is pleased farmers will benefit.
 
Chet Brokaw.