Railroads Say Weak Exports Hurting Grain Shipments

Grain transport on U.S. railroads fell 18.3 percent year-over-year in the past week, extending a steep slide in shipping from farms that the Association of American Railroads (AAR) says is the result of weaker exports. 

The decline the AAR measured the week ending Nov. 12 was the largest since 25.6 percent dive three weeks ago, part of a slump that has come just as grain shipments should be surging during the fall harvest. 

Grain shipments have improved slightly on a week-to-week basis, but the foundation commodity for agriculture shipping is on pace for a double-digit decline in November after falling 14.2 percent year-over-year in October. 

Citing data from the U.S. Department of Agriculture, the AAR said rail deliveries of grain to ports “were 30 percent to 40 percent below where they were at the same point in 2010. “

The U.S. Grains Council says the country’s grain exporters are hurting in part from the impact of the long delays in approving and implementing free trade agreements with Colombia, Panama and South Korea. The group said U.S. exporters are losing market share in the Caribbean Basin. 

Railroads have reported the declines in grain carloads but strong pricing has kept their revenue on the agriculture shipments solid. Union Pacific said in its report on the third quarter that agricultural carloads fell 3 percent from the previous year but that a 12 percent increase in average revenue per car drove revenue from the commodities up 3 percent. 

Source: Journal of Commerce