Sioux Falls, SD —
Senators Tim Johnson and John Thune, Congresswoman Stephanie Herseth and Governor Mike Rounds today commented on a report issued by the United States Department of Agriculture (USDA) that touts the benefits of the DM&E rail improvement project for agricultural producers.
The report highlights the benefits to the agriculture sector by increased rail competition and access to markets. The report reads [t]he presence of effective rail-to-rail, rail-to-barge, or rail-to-truck competition is necessary to stimulate lower rail rates for shippers. When effective competition is present, rail rates are much lower. Generally, savings from lower transportation costs go directly to agricultural producers.
Among other findings, the USDA report states, [b]ased just on our analysis of what additional rail capacity would mean as a result of the DM&E upgrade project, for just one of the crops (corn) that is eligible for federal farm program payments, the federal government could save roughly $240 million [per year] if counter-cyclical and marketing assistance loan payments are made in the future. These savings to the federal government could be greater when factoring in other crops such as wheat, oats, soybeans, oil seeds, grain, and sorghum.
"This report indicates that the potential benefits from increased rail capacity in South Dakota will go far beyond simply securing future supplies of energy to also assist agriculture producers by reducing shipping costs. Improving rail infrastructure in South Dakota is good for our economy across a wide range of economic sectors," said Johnson.
"The USDA report reiterates what we in South Dakota have known ever since the first railroad track was put down in our state. Access to markets and direct competition have a transformational effect on our agriculture industry and our economy as a whole. The economic impact this project would have on our state will benefit South Dakotans for generations to come," said Thune.
"This study reconfirms what farmers and ethanol manufacturers in South Dakota already know: improved railroad infrastructure and enhanced rail competition will provide tangible benefits to agricultural producers and biofuel manufacturers throughout the region. The increased farm prices that result will have a positive impact on farmers' pocketbooks and save taxpayers millions in farm program payments," said Herseth.
"I am pleased to see the USDA's support of DM&E's reconstruction and expansion plans. USDA's report provides further testimony to the many benefits of this project such as improving grain producer access to other markets and creating higher paying jobs for the region's rural economy," said Rounds.
The report lists the following as other benefits from the DM&E upgrade:
Click here to view a PDF of the USDA Report.
The report highlights the benefits to the agriculture sector by increased rail competition and access to markets. The report reads [t]he presence of effective rail-to-rail, rail-to-barge, or rail-to-truck competition is necessary to stimulate lower rail rates for shippers. When effective competition is present, rail rates are much lower. Generally, savings from lower transportation costs go directly to agricultural producers.
Among other findings, the USDA report states, [b]ased just on our analysis of what additional rail capacity would mean as a result of the DM&E upgrade project, for just one of the crops (corn) that is eligible for federal farm program payments, the federal government could save roughly $240 million [per year] if counter-cyclical and marketing assistance loan payments are made in the future. These savings to the federal government could be greater when factoring in other crops such as wheat, oats, soybeans, oil seeds, grain, and sorghum.
"This report indicates that the potential benefits from increased rail capacity in South Dakota will go far beyond simply securing future supplies of energy to also assist agriculture producers by reducing shipping costs. Improving rail infrastructure in South Dakota is good for our economy across a wide range of economic sectors," said Johnson.
"The USDA report reiterates what we in South Dakota have known ever since the first railroad track was put down in our state. Access to markets and direct competition have a transformational effect on our agriculture industry and our economy as a whole. The economic impact this project would have on our state will benefit South Dakotans for generations to come," said Thune.
"This study reconfirms what farmers and ethanol manufacturers in South Dakota already know: improved railroad infrastructure and enhanced rail competition will provide tangible benefits to agricultural producers and biofuel manufacturers throughout the region. The increased farm prices that result will have a positive impact on farmers' pocketbooks and save taxpayers millions in farm program payments," said Herseth.
"I am pleased to see the USDA's support of DM&E's reconstruction and expansion plans. USDA's report provides further testimony to the many benefits of this project such as improving grain producer access to other markets and creating higher paying jobs for the region's rural economy," said Rounds.
The report lists the following as other benefits from the DM&E upgrade:
- Provide savings for energy consumers by reducing transportation costs for coal.
- Create new ethanol and biofuels production opportunities with more efficient rail transportation.
- Reduce the cost of inputs used by farmers through the movement of anhydrous ammonia and other agricultural chemicals by rail.
- Reduce highway congestion by taking trucks off the roads. This will mitigate damage to roads and bridges that are already in "fair to poor" condition.
- Create a safer railroad with more modern tracks, signaling, and communications systems.
- Create new higher paying jobs for the region that will boost the rural economy.
- Preserve a regional railroad vital to rural communities that otherwise may be lost.
Click here to view a PDF of the USDA Report.
