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Archive for Monday, October 4, 2004

Harvest raises shipping problems

October 4, 2004

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— Projected bumper crops of corn, soybeans and milo are good news for farmers, but the expected huge harvests pose some old problems producers haven't had to deal with during several years of drought.

As Kansas elevators empty their bins to make room for the new crops, they are discovering that an overburdened railroad industry is struggling to provide enough rail cars to ship the stored crops out.

Railroad officials say they're poised to break national shipping records, and the harvest represents only a part of the increased demand.

Railroads, which move more than 40 percent of U.S. freight, also are transporting big shipments of consumer goods needed during the holiday season, said Ed McKechnie, executive vice president of WATCO, parent company of the Kansas & Oklahoma Railroad.

"We are seeing historical demands with everything -- cement, lumber, wallboard, scrap steel," McKechnie said "Then you are going to see fall harvest strong this fall. This is the most volume railroads have ever moved."

Kansas has 1.1 billion bushels of commercial and on-farm storage space, officials said, but that may not be enough.

"In anticipation of this huge crop, many of our elevators did empty out their wheat," said Tom Tunnell, with the Kansas Grain & Feed Assn. "But even totally empty, I don't think it could hold this crop."

He added that rail service problems during bumper harvests are not unusual.

"It's a timeless problem," said Roger Nober, chairman of the U.S. Surface Transportation Board. "If you have a peak demand and a big harvest, there is going to be problems meeting demand."

Nober said he was optimistic that rail services would improve during the fall peak, but said the railroad's aging infrastructure is overloaded, and it was costly to update it.

"Essentially, it is a 19th-century network trying to handle 21st-century freight flows," Nober said. "There are plenty of track miles, but not necessarily where the railroad freight is moving."

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