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Farmers complain about BNSF rates to STB

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http://www.dfw.com/mld/dfw/news/state/13031461.htm (Link) Farmers air complaints about BNSF Associated Press BIG SANDY, Mont. - Grain growers angry about BNSF's freight service and rates shared their gripes with a federal official, who responded that absent a formal complaint, there is little his office can do. More than 100 people gathered at Big Sandy High School on Friday for an appearance by Doug Buttrey, vice chairman of the federal Surface Transportation Board. Gov. Brian Schweitzer asked Buttrey to come to Montana and hear concerns about Burlington Northern Santa Fe Corp., based in Fort Worth, Texas. A similar meeting took place later Friday in Scobey. During the 2 1/2-hour Big Sandy session, one farmer after another complained about eroding service and high freight rates. "We can only decide a case that has been filed with us," Buttrey responded. Montana Senate President Jon Tester, a Big Sandy Democrat and farmer running for the U.S. Senate, said people in Montana agriculture "cannot wait a long time. If we file a case and it drags on ... we don't have the pockets that the railroad has" to sustain the case. Buttrey said there are guidelines under which a mediator can hear small rate cases. BNSF spokesman Pat Keim said rail rates respond to market conditions, and since 1981, rail prices have lagged compared to other farm expenses. A consultant, Terry Whiteside, said grain growers in Montana and North Dakota encounter the nation's highest freight rates because the growers are served by only one railroad. Montana's rail system has shrunk since deregulation began in the 1970s. The state has 2,000 fewer miles of railroad now than in 1975, said *** Turner of the Montana Department of Transportation. "In Montana, 94 percent of the rail system is controlled by one railroad," he said. Farmers have seen their cost of doing business rise with the expense of hauling grain farther and farther, as local elevators next to railroad tracks close. Eleven large, high-speed shuttle loaders have been installed in Montana, and some farmers find no alternative to taking their grain to those locations. BNSF announced in June that it would raise shipping rates on grain loaded at 52-car elevators, the kind closer to many farms. But a month ago, BNSF undid the rate increase. Loading relatively close to farms still costs $200 more per grain car than at the shuttle loaders. Demand for cars was strong in August and September because grain shippers released last year's corn at the same time as this year's wheat crop, said Keim, BNSF's government affairs director based in Helena. Now, he said, Midwest shippers are moving soybeans and this year's corn crops, and barge availability is limited because of hurricanes Katrina and Rita. "The entire surface (shipping) system is stretched to its limits," Keim said. He also said it is "a misnomer to say the railroad is driving small elevators out of business. Demand led to creation of the shuttle loader network." Responded grain grower Darren Genereux of Big Sandy, "Pat makes us feel like BN is on the brink of bankruptcy. On Oct. 25, they reported all-time high quarterly revenue and freight rates were up 18 percent. This is all on the backs of the farmers." Tester said that over the last 25 years, "farmers have had the screws put to them, but they handled that by increasing production." That will no longer work, he said. "It's important that the Surface Transportation Board scrutinize those rates and make sure they are fair and affordable," Tester said. Schweitzer said the railroad is a monopoly not living up to deregulation requirements intended to protect captive shippers, such as Montana grain growers. "Competition is one of the most important things we should have out here in Montana and North Dakota," Schweitzer said. Keim said he would convey the complaints to railroad officials. He was unable to say whether that report would make a difference, he added. Edited do to having no sleep and misspelling :)
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