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Rail Deal Seen Boosting Farm Sales

$25B deal could smooth flow of goods to market for both U.S. and Canada

Photo courtesy of Canadian Pacific
Photo courtesy of Canadian Pacific

Canadian Pacific’s $25 billion deal to buy Kansas City Southern will create a rail network from Canada to Mexico that farm groups say could smooth the flow of their goods to market, reports Reuters.

Mike Steenhoek, executive director of the Iowa-based Soy Transportation Coalition said the deal could increase market access for customers of each railway.

“Many current Canadian Pacific customers currently only have access to export terminals in the Pacific Northwest,” Steenhoek said in a statement. “Similarly, current Kansas City Southern customers may enjoy new access to markets served by the Canadian Pacific network.”

Mexico is a major buyer of U.S. corn and Canadian canola.

Canadian grain handlers also see potential for enhanced sales, but are awaiting details on how much of a priority the combined company will place on customer service, said Wade Sobkowich, executive director of the Western Grain Elevator Association, whose members include Cargill and Richardson International.

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