Will farmers and grain companies have access to reliable and efficient rail service to reach domestic and international markets in the years to come?
That was one of several questions posed by a recently released study funded by the soy checkoff and coordinated by the Soy Transportation Coalition on the U.S. railway system and its capacity to support future growth – particularly in agriculture.
This study, titled”Maintaining a Track Record of Success.” concludes that expansion of the country’s railway system will depend on continued demand for the transport of soybeans and other agricultural products; growth in the trade of oil, gas and coal; and significant investment in infrastructure.
“The U.S. soybean industry needs a transportation system that runs smoothly in order to move our soybeans to markets, and train cars on railways are a major part of that,” says Jared Hagert, soybean farmer from Emerado, N.D., and United Soybean Board Target Area Coordinator for International Opportunities. “A big key to growing markets, both domestic and international, is being able to deliver our soybeans in an efficient, and cost-efficient manner.”
A number of freight studies by the U.S. government and the private sector have predicted that there will soon be an “investment gap” in rail and highway infrastructure. That gap will need to be filled by private or public funding to avoid disruptions to the transportation system and the overall economy. This checkoff-funded study estimates that rail traffic demand will grow 2 percent annually moving forward.
The study also looked at the soybean sector’s challenges in becoming more efficient with its rail movements.
Timing is often an issue when it comes to railway use by the soybean industry. According to the study, a vast majority of soybeans intended for export are transported between September and February. Rail capacity to handle the surge in volume during those months is critical to the soybean industry, the value of soybeans and the bottom line of farmers.
As the study noted, capital needs for the rail sector are expected to intensify in the next several years. The shifting economics of the coal and oil industries will force additional adjustments in rail investment strategies, in addition to the overall need for expanded rail capacity growth.