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Proposed railroad merger could be a mixed bag for ag industry

Some members in the ag industry are closely watching how a proposed railroad merger will impact the transportation of ag goods across the country. 

Indiana farmer Mike Koehne is the chairmen of the Soy Transportation Coalition and says the acquisition of Norfolk Southern by Union Pacific raises concerns about consolidation. “We’re taking a player off the field and we’re going to be down to two big players in the game. Hopefully, they won’t take and raise the rates. Hopefully, we can keep the freight costs down.”

However, he tells Brownfield, the merger could help improve shipping delays and keep farmers more competitive. “In the long run, I hope that it is beneficial to agriculture and any industry out there that it will make things run smoother and get things done faster. We need to move our products faster.”

During a recent call with reporter, Senator Pete Ricketts says the transcontinental system could improve access to rail cars during harvest. “I don’t know if this will address this, but perhaps if you think about Norfolk Southern being more of a southern based, railroad there may be potential with different harvest seasons to be able to move cars around and get more access to cars for our producers when we’re doing harvest versus when they’re doing harvest. Obviously, we’re going to investigate all this stuff.”

Ricketts says the location of Union Pacific’s headquarters in Omaha, Neb., provides a central hub, which could make management of the rail system more effective.

The two railroads expect to file their application with the Surface Transportation Board within six months.