The National Corn Growers Association urged improvements in capacity and shipping costs for grain in comments to the Surface Transportation Board. The STB held a hearing Thursday on the issue of rail transportation of grain.
NCGA stresses the importance of producer access to cost-effective, efficient transportation in order to keep and expand markets. Growers' ability to successfully market corn products depends upon a dependable and financially viable rail system, NCGA says.
"We appreciate the STB for taking a serious look at rail transportation problems facing grain producers," says NCGA President Ken McCauley.
McCauley also warns that the emerging biofuels industry requires the infrastructure to be prepared for a volume hike.
"Current infrastructure appears ill-equipped to handle the potential volume increases expected to be generated by the ethanol and biofuels sectors," he says. "The ability to take advantage of growing opportunities for agriculture producers will be severely constrained if transportation infrastructure is not improved."
NCGA called for the STB to finalize its decision to mandate that fuel surcharges must be reasonably related to additional fuel costs and rail carriers must be transparent in their actions. The current transportation situation is negatively impacting corn growers' competitive advantage, McCauley says.
"Strained capacity in all modes of transportation, increasing rates for rail service, declining barge efficiency…significantly affect the ability to market corn and corn by-products," he says. "These factors are being reflected in considerably weaker cash basis levels, with the obvious negative impact on farm-gate prices."