SDFU president suspicious of rail/oil connection

A member of the National Farmers Union Board says the problem with railways putting grain shipments on the back burner is as bad as it’s ever been and congressional investigation is likely needed. Doug Sombke, President of the South Dakota Farmers Union, says the Surface Transportation Board (STB) is not taking the issue seriously enough, “It’s very suspicious to think that now all this oil is being developed and they’re shipping all this oil that the railroad and the oil industry aren’t working together to eliminate the effects of ethanol. Because we all know that ethanol has kept the price of oil down.”

He tells Brownfield the NFU and other groups are considering a petition to ask for an investigation rather than STB just holding hearings. A South Dakota County Farmers Union official testified at one of those hearings last week.

Sombke tells Brownfield Ag News the problem is going to get worse this spring with less fertilizer likely being shipped to plants and, worse yet, the impact on the basis, “The difference between the Chicago Board of Trade and what we’re getting paid at the elevator is huge at this time and this should be a time when it’s at the lowest. If it continues at this rate, into fall harvest, it could be double what we’re seeing today.”

Sombke says Burlington/Northern, Santa Fe and Canadian Pacific need to be more reliable. He says the railroads are not charged a penalty the way grain farmers are if contracted grain shipments are late.

On Wednesday, the Surface Transportation Board said it would require the rail industry to report on its delivery of fertilizer to farmers in the upper Midwest to ensure it arrives for the upcoming growing season.

Interview with Doug Sombke (11:00 mp3)

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