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Rail Strike Could Wreak Havoc on Grain Supply Chain

If President Biden declines to intercede, rail workers could strike

2 Lisa Selfie December 2020 Headshot
Johannes Plenio | PEXELS.com
Johannes Plenio | PEXELS.com

President Joe Biden faces a deadline to intervene in nationwide U.S. railroad labor talks covering 115,000 workers, or open the door to a potential strike or lockout that could threaten an already fragile economy and choke supplies of food and fuel, reports Reuters.

If the president declines to intercede in the railroad labor negotiations by appointing a Presidential Emergency Board (PEB) before 12:01 a.m. EDT on Monday, the railroads and unions could opt for operational shutdowns or strikes.

If appointed, the board would make recommendations that could be used as a framework for a voluntary settlement.

If the deadline isn't met, rail labor has already voted to go on strike. However, the Association of American Railroads told AgWeb that it's widely expected there will be an appointment of a PEB by the deadline.

Rail service issues already prevalent

Throughout 2022, agricultural shippers have dealt with significantly deteriorated rail service.

The Surface Transportation Board (STB) held a two-day hearing in April, with testimony from agricultural groups, including the National Grain and Feed Association (NGFA) describing costly ongoing problems.

At the hearing, Jon Setterdahl, product and services leader at Landus Cooperative, said in a letter to the STB that rail transit times from the farmer-owned cooperative have more than doubled.

Landus buys grain from 7,000 farmers across Iowa and described turning away farmer loads of corn and soybeans as country grain storage elevators waited 20 days for rail carriers to pick up loaded grain cars, up from a week and a half.

“This delay in March consisted in a total five trains being delayed into April, which is a total shortage of grain shipments in that month alone of 2.250 million bushels,” said Setterdahl.

Foster Farms asks for emergency service order

Foster Farms, the largest chicken producer in the western U.S., asked federal regulators to issue an emergency service order that would direct Union Pacific to prioritize corn shipments that thousands of dairy cattle and millions of chickens and turkeys depend upon.

Union Pacific delivers corn to Foster Farms feed mills in Traver, CA, and Turlock, CA, in 100-car unit trains, but according to Foster Farms’ petition, service failures began in February.

Foster Farms, in the petition, said it believes an emergency service order is necessary to alleviate harm to its business and the poultry and other animals that depend on the distribution of corn meal supplied by Foster Farms.

​​”The point has been reached when millions of chickens will be killed and other livestock will suffer because of UP’s service failures,” Foster Farms wrote in its request to the STB in June.

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