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More on the negative consequences of monopolistic pricing
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[quote]QUOTE: <i>Originally posted by Dick_Lewis</i> <br /><br />Let's keep a couple of real-world perspectives in mind: BN was created 35 years ago ... Montana farmers were growing wheat in 1970 and they are growing wheat now. BN was hauling the wheat in 1970 and BNSF is hauling it now. The value of wheat production per acre in Montana in 1970 was $33. In 2003 it was $101. Source: <br /> <br />http://www.nass.usda.gov/mt/ <br /> <br />Some very savvy grain marketers are investing big bucks in highly efficient grain handling/loading facilities in Montana, and BNSF continues to invest in high-efficiency hoppers, locomotives, and mainline track. If Montana wheat doesn't move to market because of monopolistic pricing, those grain marketers, BNSF, and Montana wheat growers will be high, dry, and broke in Big Sky country. What are the odds? Thirty years of history says the future looks bright for all three parties. Let the contest for economic rent continue in the world grain market. <br />[/quote] <br /> <br />***, <br /> <br />I work for the NASS, so I know a little something about issues that affect grain farmers. Productivity gains are responsible for the increase in per acre crop values. What we've discussed here is the fact that a greater percentage of the farmers' profits are being eaten up by transportation costs today than in years past, because of the terminal consolidations that have forced the average farmer to truck his grain a far longer distance to access the nearest railhead. You should also note that farm bankruptcies are higher in Montana than in areas of the country with access to two or more bulk haulers (rail, barge). The future hasn't been to bright for these guys, but it can brighten with a little legistlative pre-emption to ameliorate the current rail monopoly situation.
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