If prairie pulse growers are grumpy about how slow and expensive the Canadian grain handling system is, they should look south, say U.S. pulse buyers.
Pulse-shipping conditions in North Dakota are in a crisis after Burlington Northern/Santa Fe Railway stopped allowing elevators to book rail cars for August to October delivery.
“I’m moving the crop, but the poor producers are paying 25 to 30 cents (US per bushel) per car (for the car rental alone),” said Paul Lautenschlager, the manager of Beach Co-op Grain Company in southwestern North Dakota.
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“It just comes right out of the producers’ pocket.”
BNSF railway has reduced the number of grain cars it offers each week and is directing most to elevators that can handle 110 car trains.
It has stopped the process that allowed companies to book cars weeks or months in advance.
For most grain growers, that isn’t a problem because they can truck their grain to the big elevators.
But peas and lentils in North Dakota never move in large unit trains because shipments tend to be much smaller. That means when the railway puts up disincentives for elevators ordering small numbers of cars, pea and lentil growers suffer the most. They end up in bidding wars for the few cars on offer.
“You can get all the cars you want, but you have to pay a lot of money for them,” said Lautenschlager.
“(The railway) creates an artificial shortage, and then they put it out on bids, and they only give you 45 cars a week, and there’s 400 elevators in the state of North Dakota bidding for those cars.”
At times last year the rate for a rail car was only three to four cents per bu., making this year’s 25 cent per bu. cost a massive increase, Lautenschlager added. Elevating costs and deductions further reduce the farmer’s return.
“Some of the guys say to me, ‘I hear there are good markets out there. Why is my price so bad?’ I tell them Ð transportation is your key challenge,” he said.
“We’re captive.”
Eric Bartsch, executive director of the North Dakota Dry Pea and Lentil Association, said farmers are furious that they are getting hammered on freight rates.
“They’re pretty upset,” he said.
The pea and lentil association is one of 11 North Dakota farm groups that signed a letter to BNSF complaining about the car-ordering changes and requesting relief.
They requested the railway continue to offer its former program in which rail cars could be ordered up to four months in advance and that it allow shippers to pay a set tariff, rather than rely on auction pricing.
Lautenschlager said even with the high car rental expenses, he doesn’t expect to see American pulses flood into the
Canadian system.
“Fuel is sky high, so trucking it too far is a problem,” he said.
