STB aims to ensure rail fertilizer deliveries for spring planting

By Erin Voegele | April 17, 2014

With the spring planting season underway, the Surface Transportation Board is taking action to ensure U.S. farmers have access to fertilizer. On April 15, the STB issued a statement directing the Canadian Pacific Railway Co. and BNSF Railway Co. to report their plans by April 18 to ensure delivery of fertilizer shipments for spring planting of U.S. crops. The move came following an April 10 hearing during which farmers and representatives of agriculture producers told the board that without timely delivery of adequate amounts of fertilizer, they would not be able to commence spring planting for the 2014 crop.

The hearing focused on recent railroad service issues. Representatives of the Renewable Fuels Association and Growth Energy were among those offering testimony. During the event, Chris Bliley, director of regulatory affairs for Growth Energy, explained that insufficient rail service has resulted in ethanol price spikes and plants having to halt production. Ed Hubbard, general counsel at the Renewable Fuels Association, noted that crude oil shipments from the Bakken have reduced the flexibility of the rail system in dealing with adverse weather conductions. He explained that the railroad failed to adequately prepare for increased oil shipments and stressed that the growth in crude oil shipments has reshuffled the existing fleet of railcars and locomotives, pressured lease rates, changed normal rail traffic patterns and generally exerted significant stress on the rail system. The problems are not specific to the ethanol industry. Rather, issues stemming from a lack of adequate rail transportation are impacting a wide variety of industries, including the farming community.

In its notice, the STB that that given the need for fertilizer to meet rapidly approaching planting deadlines, and the potential long-lasting and widespread effects of missing those deadlines, it would direct CP and BNSF to report plans to ensure delivery of fertilizer shipments for spring planting of U.S. crops. The first report is due April 18. Both railroads are also required to provide weekly status reports over the next six weeks, beginning April 25, regarding the delivery of fertilizer on their respective networks. The reports are to include fertilizer delivery data by state that includes the number of cars, shipped or received, which are billed to agricultural destinations, and the number of cars placed during each prior week. According to the notice, CP and BNSF will also be directed to include actual performance versus trip plan data for fertilizer shipments.

“This directive is intended to focus each carrier’s attention on these very time-sensitive deliveries while the carriers simultaneously work to address the extensive service and car supply issues for all commodities and to get those commodities moving on the rail network. The Board continues to closely monitor rail service metrics data for all movements and consider other efforts to address rail service issues,” said the STB in its notice.

Sen. John Thune, R-S.D., spoke out on the STB’s action, calling it a step in the right direction. “I am pleased that they acted so quickly after last week’s hearing to address some of the ongoing rail service issues in South Dakota and the surrounding region,” said Thune. “I will continue to press the STB and the railroads to do all they can to improve service across South Dakota during this critical time of year for our farmers. Continued rail service disruptions are not only having a direct impact on agriculture producers, grain handlers, and the ethanol industry, but also on manufacturers and main street businesses across our state,” he said.