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Wheat groups disappointed in Canadian Pacific Railway-Kansas City Southern merger

The Surface Transportation Board has approved Canadian Pacific Railway’s acquisition of Kansas City Southern and some ag groups are expressing their disappointment.

In a statement, U.S. Wheat Associates and National Association of Wheat Growers say the move doesn’t consider the impact on agricultural shippers from lack of competition in the U.S. rail sector.

U.S. Wheat Associates President Vince Peterson says there is extreme disparity in rates for wheat shippers.

“Rail rates over the last decade have increased exponentially and rates for wheat are higher than rates for other commodities even with similar handling characteristics. Those higher rates make U.S. wheat less competitive in the global market at a time when higher prices already hurt our competitiveness,” Peterson says.

NAWG CEO Chandler Goule says the merger will hinder competition and increase rail rates. Fifty percent of wheat is exported and he says the commodity relies heavily on rail transportation to move across the U.S.

“Since the merger was announced in 2021, NAWG has filed four public comments with the STB opposing the merger, citing a myriad of concerns on the impact to competition, unfair access to competing wheat producing countries, and changes to tariff provisions that could impact wheat farmers,” Goule says.

The groups say they will work with the new CP-KCS railroad and the Surface Transportation Board to address the disparities wheat shippers face.  

Conditions for the acquisition include a seven-year oversight period that will aim to mitigate environmental impacts, preserve competition, protect railroad workers, and promote efficient passenger rail. The board says the merger should also improve safety and reduce carbon emissions.

This STB decision is effective on April 14. Petitions for reconsideration of this decision must be filed by April 4.  Requests for stay must be filed by March 27.