U.S. Senators John Thune (R-South Dakota), Ranking Member of the Senate Commerce, Science, and Transportation Committee, and Amy Klobuchar (D-Minnesota) today sent a letter to U.S. Department of Agriculture (USDA) Secretary Tom Vilsack calling on USDA to conduct an economic analysis of the rail service challenges facing agricultural shippers. Thune and Klobuchar’s letter cites recent testimony from USDA’s own Deputy Administrator of the Transportation and Marketing Program, Arthur Neal, who testified before the Senate Commerce Committee on September 10th and stressed the significance of these crucial issues to many of America’s agriculture producers and grain elevators.
The senators write, “…[W]e respectfully request that the USDA conduct a more detailed economic analysis of the ongoing transportation challenges facing producers and agricultural end users in our region, including food processors, livestock producers, and ethanol refiners…We hope that the information provided by this analysis will present a clearer picture of the challenges facing the agriculture industry as we work to help resolve them.”
This letter expands on Thune’s efforts since the beginning of the year to work with the Surface Transportation Board (STB) to hold railroads accountable for the backlog of railcars and locomotives in South Dakota. Through letters, meetings, hearings, and legislation, Senator Thune continues fighting on behalf of South Dakota shippers and is pursuing solutions to address the shortage of railcars and locomotives as we enter the fall harvest, which is projected to be record-setting. For a complete outline of Senator Thune’s work to reduce the rail service backlog, visit his website.
The text of the senators’ letter follows:
October 1, 2014
Mr. Tom Vilsack
U.S. Department of Agriculture
219A Whitten Building
1400 Independence Avenue, Southwest
Washington, DC 20250
Dear Secretary Vilsack:
We write today regarding the on-going rail service challenges currently facing a large part of the country, but especially the Upper Midwest. As you know, these rail service delays have impacted a variety of industries, including agriculture, which is a critical economic driver in both of our home states. In fact, at a recent U.S. Senate Commerce, Science, and Transportation Committee hearing Mr. Arthur Neal, Deputy Administrator of the Transportation and Marketing Program at the U.S. Department of Agriculture (USDA), testified and highlighted the significance of this crucial issue to many of America’s producers and grain elevators.
While we understand that you have briefed the president on this critical rail situation, no regional or national studies have been conducted to assess the economic impact of these rail service challenges. However, a University of Minnesota report indicated that transportation bottlenecks cost the state’s farmers almost $100 million between March and May of this year. The same report also suggested the potential for another $124 million in lost revenue due to lagging rail service.
While very useful, such reports tell only part of the story. Therefore, we respectfully request that the USDA conduct a more detailed economic analysis of the ongoing transportation challenges facing producers and agricultural end users in our region, including food processors, livestock producers, and ethanol refiners. When completing this analysis, we request that the USDA also consider, as appropriate, commodity prices, food prices, and changes in agricultural exports. We hope that the information provided by this analysis will present a clearer picture of the challenges facing the agriculture industry as we work to help resolve them.
We look forward to working with you on this important matter. Should you have any questions, please feel free to have your staff reach out to Adrian Arnakis on my Commerce Committee staff (202) 228-5388 or Danny Carlson in Senator Klobuchar’s office (202) 228-2186.Sincerely,