Analyst fears a basis apocalypse could be looming
July 20, 2020 By Mark Dorenkamp Filed Under: Crops, News
A market analyst is concerned that a basis apocalypse could
be looming for much of the Corn Belt.
Earlier this month, a federal judge issued an order to close
the Dakota Access Pipeline.
Elaine Kub says if that occurs it would create a very congested rail infrastructure situation similar to 2013 and ’14.
“Back in that time-frame, the shippers, coops, elevators that had to go to the rail market and buy cars were paying $5,700 per car just to get service. And service was usually days late and everything was very slow, and the rail systems were really gummed up.”
She tells Brownfield the additional freight costs added $1.50 to the price of shipping the grain.
“So in North Dakota there were people with basis at $1.20 under or worse at various points in time. And when you finally got down to the feed yards in the Texas Panhandle or thereabouts, it was $1.50 over. So it just added to the cost everywhere.”
Kub says it’s not certain the pipeline gets shut down because a federal appeals court has at least temporarily stayed the federal judge’s order.
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