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Soybean leader sees possible efficiencies for producers in railroad merger

U.S. Soybean Export Council President Jim Sutter is encouraged by the announced purchase of the Kansas City and Southern railroad by the Canadian Pacific Railway. “On the surface, it looks like it should be a pretty good thing. It should extend the reach for producers up in, particularly up in the northern Midwest giving them good access going down into Mexico.”

Although Sutter does not expect the railroad changes will increase sales to Mexico, he says it could make it easier to move what they already buy from the U.S.

And, Sutter tells Brownfield having access by rail to ocean ports in Canada and Mexico might make it easier to ship soybeans to Asia. “We think that if you can have a better connection for people to get to those ports for shippers that want to have access, and they won’t have to go through the congested, currently, Calfornia ports, it might give more access.”

Sutter tells Brownfield 60% of the soybeans, meal, or soybean oil produced in the U.S. leaves the country, with about 35% of that relying on rail to reach ocean ports, and from what he sees, the merger could have advantages for farmers and exporters. 

The Canadian Pacific Railway agreed to buy Kansas City and Southern on March 21st for 25-billion dollars, creating a T-shaped network spanning coast to coast in Canada and south deep into Mexico.  The deal must be approved by the U.S. Surface Transportation Board, which might not happen until next year.