Fertilizer for farmers competes with oil for rail cars

Sally Herships Apr 21, 2014
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Fertilizer for farmers competes with oil for rail cars

Sally Herships Apr 21, 2014
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It’s just about time for spring planting season in the Upper Midwest. But to plant, farmers need fertilizer, and the trains that ship fertilizer are busy. Shipments of crude oil have squeezed out other freight and now the federal government has stepped in, ordering two railroads to make room. 

To farmers waiting for their fertilizer, the problem seems obvious. Roger Johnson, president of the National Farmer’s Union, says agricultural shipments are way behind: “What I’m hearing from farmers back home is that these oil cars are moving just like clockwork. And there is very much the sentiment: They have been given some sort of priority treatment by the railroads.”

The government has ordered two railroads, BNSF and Canadian Pacific, to ensure the delivery of fertilizer for spring planting. A BNSF spokesperson said in an interview that the railroad is not favoring oil over fertilizer. Traffic is up, but consumer products are the growth leader, not crude oil. BNSF does say it sets rates individually, according to the market.  Canadian Pacific says it also sets rates individually, depending on the type of freight. 

“It’s called differential pricing,”  says Steve Sharp,  president of Consumers United for Rail Equity. “The railroads charge different prices per car or per pound or whatever, depending on the commodity and what they think the market will bear.”

Sharp notes that  power companies trying to get shipments of coal are having problems, too. He says, because a lot of the shipping contracts are private, it’s hard to compare prices for shipping oil via train with other commodities.

“That’s one of the issues as shippers we have,” he says, “we don’t have access to a lot of good current data to really tell where we are.”

The National Surface Transportation Board, which issued the order, says it’s tracking the railroads’ fertilizer shipments. Their first reports are due this Friday.

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