Railroads are adjusting soybean freight rates for the 2026/27 marketing year in response to changing demand patterns, with BNSF raising rates to Pacific Northwest terminals while cutting rates to the U.S.-Mexico border, and Union Pacific implementing across-the-board rate increases to accommodate a record 4.5 billion bushel harvest and growing domestic crushing demand.
- BNSF will raise tariff rates to Pacific Northwest export terminals by $120 per car starting in September, while cutting rates to the U.S.-Mexico border with reductions of at least $500 per car for 46 elevators.
- Union Pacific will raise soybean tariff rates by $225 per car across the board, contrasting with last year's rate cuts.
- U.S. farmers are projected to harvest a record 4.5 billion bushels of soybeans in MY 2026/27, with domestic crush demand up 5% from the prior year.
- China has committed to purchasing 918.6 million bushels of U.S. soybeans, while Mexico has purchased 53.5 million bushels, 33% above average.
- Rate adjustments reflect railroads' response to growing domestic crushing for biofuels production while the export share has declined.
Railroads are making changes to soybean freight rates for marketing year 2026/27, responding to a shifting landscape where domestic crushing has grown and export patterns have changed. The USDA's Agricultural Marketing Service weekly Grain Transportation Report. BNSF Railway will raise rates to Pacific Northwest terminals while cutting rates to the U.S.-Mexico border, while Union Pacific and Canadian Pacific Kansas City plan across-the-board increases.
The rate adjustments come as USDA projects U.S. farmers will harvest a record 4.5 billion bushels of soybeans this fall, with demand expected to reach record levels as well.
BNSF makes selective adjustments
Starting in September, BNSF will raise its tariff rates to PNW export terminals by $120 per car across all origins. The railroad’s soybean rates to the PNW are lowest from Nebraska, between $5,800 and $6,000 per car from most Nebraska origins.
After last year’s rate reductions to the Texas Gulf, most BNSF-served elevators will see no rate change in this lane for MY 2026/27. However, 28 origins will see a rate reduction, and five will see a rate increase. Sterling, KS, will receive the largest rate cut of $1,375 per car, likely because the elevator did not receive a rate cut last year.
For the second year in a row, BNSF will substantially reduce most of its soybean tariff rates to the U.S.-Mexico border. Forty-six BNSF-served elevators in Illinois, Kansas, Nebraska and South Dakota will see rate reductions of at least $500 per car. Mitchell, SD, will see the largest rate cut to Mexico of $835 per car in MY 2026/27. Including last year’s $1,000 per car reduction, the drop in rates from Mitchell to Mexico over two years totals $1,835 per car, a 27% cut from the MY 2024/25 tariff rate.
The case of Mitchell illustrates the significant adjustments in BNSF’s tariff rate spreads in recent years. As recently as August 2025, Mitchell’s rate to the PNW was $200 per car less than Mitchell’s rate to the Texas Gulf and $650 less than that origin’s rate to Mexico. This September, Mitchell’s rate to the PNW will be $1,300 per car more than Mitchell’s rate to Mexico and $1,500 more than that origin’s rate to the Texas Gulf.
Union Pacific raises rates across the board
In contrast to last year’s rate cuts, UP will raise its soybean tariff rates by $225 per car beginning in September. BNSF’s southern rate cuts will make it more competitive with UP, but UP will still be favored for certain PNW lanes from Southern Plains origins.
The case of Sterling, KS, shows the effect of BNSF’s southern rate cuts. Both BNSF and UP access Sterling through the Kansas and Oklahoma Railroad. Last September, at the start of MY 2025/26, UP had an $883 freight rate advantage from Sterling to the Texas Gulf. However, in September, because of BNSF’s $1,375 rate reduction and UP’s $225 rate increase, BNSF will have a $661 price advantage in this lane.
Record crop to meet strong demand
According to USDA’s August Crop Production report, U.S. farmers are projected to harvest 4.5 billion bushels of soybeans in MY 2026/27. If realized, this volume would be 5% above average and a record high, surpassing the MY 2021/22 soybean crop by 55 million bushels.
USDA’s August World Agricultural Supply and Demand Estimates report projects U.S. soybean exports for MY 2026/27 will total 1.7 billion bushels, up 9% from MY 2025/26 but down 10% from average. Domestic crush for MY 2026/27 is projected at 2.8 billion bushels, up 5% from MY 2025/26 and up 18% from average.
China has committed to buying 25 million metric tons (or 918.6 million bushels) of U.S. soybeans in MY 2026/27. If these sales materialize, they will raise demand for shuttle train service to PNW export terminals following the soybean harvest. Mexico has purchased 1.5 million metric tons (or 53.5 million bushels) for MY 2026/27, 33% above average for the period.
The rate adjustments reflect railroads’ anticipation of changing demand patterns as the share of soybeans crushed domestically has grown to support biofuels production while the exported share has declined.
