What happen to Milwaukee Road?

[MichaelSol]

Taking that interesting new combine cost analogy a step further.

On a 1400 acre farm, raising 28 bu of wheat per acre, that new combine would cost 35087 bushels of wheat, and produce 39,200 bushels per year. If it's good for 15 years, it will produce 588,000 bushels. That's 588,000 bushels produced at a cost of 35,087 bushels of wheat.

The cost to ship all the wheat produced, 168 carloads, 121,464 bushels of wheat, about four times the cost of the combine.

In cow years, that means that the cost of the combine is approximately one-fourth the cost, per bushel produced, as the cost of transportation.

That's why the transportation cost is a key to profitability while the impact of the cost increase for a new combine relatively small.

Context, context.

[MP173]

I purposely stated that the local guy has a tough time. I am not avoiding the issue that farming is tough. He even said in passing "kinda makes me wonder why I still do this (farming)". No doubt why he has two jobs.

The reasoning I went off in a "bizarre" direction is that the term relative prices was brought into the discussion. So...I went out and retrieved some "relative prices".

I thought that combines were not used for the western wheat, but not being familiar with the proceedure, used a combine to show the increase in costs of equipment since 1974. I recall you stating that

"well, if Deere, and if Monsanto, and if property taxes & if the Electric Co-op had gone up as much as BN" then costs would be $8 per bushel.

I checked Deere's prices...up nearly 500% for tractors and combines. I checked nitrogen, up 366%. I didnt check property taxes, nor Electric co-op prices. But, fuel prices, a major component of farming have increased by about 450%.

So, my bizzare path has been to make a comparison between relative prices of certain products and services used in the farming industry. In relative terms, all have increased, some much much more than others.

Now, I cannot begin to tell you the per bushel, nor the per acre cost of farming either in the Midwest or in Montana. I dont know the weighted costs of each component, but the ones I selected have seen much higher relative increases than transportation.

I understand differential pricing exists in transportation. One of my early career tasks was in pricing for trucking. It varied from customer to customer. Pricing in my current sales job varies from customer to customer, sometimes it varies within the same customer, based on conditions.

I am not an apologist for the BNSF... dont work for them, dont sell to them, dont own stock. I think they have some work to do within their organization, but overall I believe they are a solid railroad. I dont know or understand your local conditions.

Differential pricing is reality at this time. I have offered very sound advise as to how to lower the transportation costs of Montana wheat. It has worked in other industries, whether or not it would work there remains to be seen.

I have tried to address this in a logical, open minded manner. I understand about the lower rates now opening up more markets to Portland. I am not sure of the entire economics involved and at this time, I have customers to care for.

ed

[MichaelSol]

QUOTE: Originally posted by MP173
I checked Deere's prices...up nearly 500% for tractors and combines. I checked nitrogen, up 366%. I didnt check property taxes, nor Electric co-op prices. But, fuel prices, a major component of farming have increased by about 450%.

Well, your nitrogen prices are probably spot prices. They don't reflect the period we have been discussing, nor do they accurately reflect the statistical record which I specifically linked above. Yes, you can cherry pick prices and costs all over the place, but our data set is 2000-2005.

Fuel, lubricants and electric power are about 12-13% of the operating cost of a wheat ranch. Don't know if that qualifies as a "major" component, but again, I question where these numbers, this 450%, come from.

Gas prices in 1974 were approximately $1.80 per gallon. The average in 2005 was about $2.25 per gallon. Ag gets a tax break on these and so the numbers would be less in both cases, but according to the PPI, that cost too would be less, and even in actual dollars is only a 25% increase, not a 450% increase. Good heavens, are you really paying $8 a gallon?

[Murphy Siding]

QUOTE: Originally posted by MichaelSol
.

Fuel, lubricants and electric power are about 12-13% of the operating cost of a wheat ranch. Don't know if that qualifies as a "major" component, but again, I question where these numbers, this 450%, come from.

Gas prices in 1974 were approximately $1.80 per gallon. The average in 2005 was about $2.25 per gallon. Ag gets a tax break on these and so the numbers would be less in both cases, but according to the PPI, that cost too would be less, and even in actual dollars is only a 25% increase, not a 450% increase. Good heavens, are you really paying $8 a gallon?

There you go again......I don't remember gas hitting $1.80 in 1974, but it may have. Was that the average, since you're comparing it to the 2005 average? Is $1.80 1974 gas equal to $8.00 2006 gas? I found it almost,....um.....bizarre[:)], that you are throwing out a lot of numbers again, that don't seem to support what you are saying. I'm not disputing whether your numbers are right(or wrong), just that they don't seem to support what you're saying.[;)]

[METRO]

See now there is one quite interesting thing in compairing the Milwaukee with the other Northern Transcons and Midwest Regionals: The Milwaukee outlived (unmerged) all of them, except the CNW and skirted the fate of the Rock. BN was formed of the GN, NP, CB&Q and SP&S in 1970. Three of the Milwaukee's biggest rivals were contained in that merger, joining forces and pooling their resources. The Milwaukee was up against the CNW, the superior midwestern carrier, and against the BN juggernaut not on on its transcontinental route but also in the midwest. The CRI&P died a horrible death in 1980 and the Milwaukee was in a state of living death at this point, maninly though their own doing.

However, much like the city of Milwaukee itself, the Milwaukee Road seemed to have insane amounts of luck on their side. After shooting themselves by first de-electrifying the pacific extension and then by abandoning it, they should have gone the way of the Rock Island, blasted appart and picked clean by the surrounding railroads. But they didn't they lived long enough to get eaten by the SOO and eventually become the backbone of the Canadian Pacific in the Midwest.

Also while not really saying anything about business practice, but something of fate, there are still tons of freight cars in Milwaukee Road colors running around as well as enough engines (Bandits) around that they're a regular sight in Wisconsin. That's 21 years after the Milwaukee Road was consumed. Compaire that with how very little CNW equipment there is left only 11 years after being merged into the UP.

Cheers!
~METRO

[MichaelSol]

Since I didn't bring any of these numbers up to begin with, I'm not supporting anything with them. However, I should correct myself, I was indeed looking at a CPI adjusted chart, showing $1.80 a gallon in 1974. It is true energy costs have gone up; but energy consumption has gone down significantly and Ed doesn't account for that at all; just raw numbers that don't support anything because there is no context or meaning.

You kind of like this refrain "they just don't support what you're saying," however, in this instance, since I have no idea what the price of gas has to do with the Staggers Act and railroad pricing policy under that Act with regard to captive shippers, you will just have to ask Ed how they support ... whatever it is he is saying.

[MP173]

I paid 50 cents a gallon (more or less in 1974). I paid $2.89 recently. Hence the increase.

Fuel is used in agriculture. Not only in implements but also in the drying of grains. Perhaps you dont dry wheat, but corn is dried usually using propane.

I have made my points, and quite clearly so. Nearly all costs involved in agriculture have increased over the past 30 years.

The revenues have not. Therein lies the problem. If the revenue is being suppressed by the opening of new markets by transportation, then that is a natural economic evolution. I can think of several industries which have been impacted over the last 30 years by economic evolution:

1. Domestic textile manufacturing
2. Domestic shoe manufacturing
3. Domestic television manufacturing
4. Domestic automotive manufacturing
5. Numerous more

In additions to areas and communities impacted by the above displacements and hardships, there have been military bases closed in many locations.

Industries which are commodity based live and die by the prices of those commodities, be it oil, copper, wheat, silver, gold, etc. The real key is that commodities are subject to the current demand and supplies. Econ 101, if I am not mistaken.

ed

[MichaelSol]

QUOTE: Originally posted by MP173
I have made my points, and quite clearly so. Nearly all costs involved in agriculture have increased over the past 30 years.

Aside from questionable data, that was simply never the contention. No one said they didn't.

You have completely changed the point from one you refuse or are unable to address, to one that is completely irrelevant to the question initially posed.

Question: did rail rates to Montana wheat shippers go up or down as a result of becoming captive shippers after the Milwaukee Road left?

Your answer: the price of combines and fuel went up everywhere.

That is why I termed the direction of your conversation "bizarre" which was a little strong, "inexplicable" would have been a better choice of words. But, that direction has no meaning in the context of the thread.

[Murphy Siding]

QUOTE: Originally posted by MichaelSol

Since I didn't bring any of these numbers up to begin with, I'm not supporting anything with them. However, I should correct myself, I was indeed looking at a CPI adjusted chart, showing $1.80 a gallon in 1974. It is true energy costs have gone up; but energy consumption has gone down significantly and Ed doesn't account for that at all; just raw numbers that don't support anything because there is no context or meaning.

You have just given a perfect example of why I, and a fair amount of others, have a hard time following your numbers and reasoning.

And an example of how I feel when you throw a lot of numbers out there.. I know I'm not the only one.[;)]

Anyway, I do thank you for the info you provide about The Milwaukee Road. I do find that interesting, and quite readable. As far as the math and economics is involved, it reminds me of a surveying instructor in college. The guy could probably survey South America single-handedly, but couldn't explain it to anyone else. Therefore, I have to swear off this thread, before my head explodes.[;)] Beam me up, Scottty[alien]

[MichaelSol]

Well hang on, when I make an error I correct it; unlike some who make intentional "errors" to support unsupportable contentions and mislead people.

[Murphy Siding]

Well............I don't plan on having my head blow up intentionally, if that's what you mean.[(-D]

[chad thomas]

[Anonymous]

QUOTE: Originally posted by chad thomas

If the laws of physics regarding molecular density are indeed valid, I would have though Murphy's head would implode rather then explode.[;)]





Okay, Murph, your turn.[B)]

[Murphy Siding]

QUOTE: Originally posted by futuremodal

QUOTE: Originally posted by chad thomas

If the laws of physics regarding molecular density are indeed valid, I would have though Murphy's head would implode rather then explode.[;)] Okay, Murph, your turn[B)]

'Round these parts, we spell thought with a "t" on the end. Makes it easier to understand, don'tcha know.[;)]

( Hey, at least we're not calling each other names.[:)])

[FJ and G]

I find it interesting that many mourn the passing of the Milwaukee Road but so few mourn the loss of half the trackage of Conrail when it decided to please its shareholders.

[Anonymous]

QUOTE: Originally posted by FJ and G

I find it interesting that many mourn the passing of the Milwaukee Road but so few mourn the loss of half the trackage of Conrail when it decided to please its shareholders.

I'll give several reasons

1. Conrail had a lot of redundant trackage - Milwaukee's PCE was just one line.
2. Even after the breakup of Conrail between NS and CSX, most areas of the Northeast still have at least two Class I's competing - the loss of the PCE resulted in a vast swath of the US falling into captive shipper status.
3 Milwaukee had the mountain electrification, the Little Joes et al - Conrail's electrification is still in place, and was mostly predicated for transit, not freight.
4. The Hiawatha symbol beats the corporate blue and "C" hands down.

[n012944]

QUOTE: Originally posted by FJ and G

I find it interesting that many mourn the passing of the Milwaukee Road but so few mourn the loss of half the trackage of Conrail when it decided to please its shareholders.

While not wanting to get into a Conrail discussion on the MILW thread, I feel the need to correct you on one thing. When most of the Conrail trackage was "lost" Conrail did not have shareholders, it was owned by the US goverment. It was not trying to "please" the goverment, but keep some rail lines viable in the northeast.


Bert

[MichaelSol]

QUOTE: Originally posted by greyhounds

QUOTE: Originally posted by arbfbe

I Greyhounds. What a piece of work. You demand more and more figures and when they are provided you trip over them, kick them around and then come to the conclusion that everyone and I mean everyone else is wrong. Stick with your directorship of the greyhound racing group. Now there is an industry with a bright future. Stick around long enough and you will get a feeling of how the thousands of MILW employees felt as their livelihoods slipped away.

(emphasis added by me)
?
Just to correct this one.

I hold no position of any authority as a director or anything else with regards to Greyhound racing. I love Greyhounds and Greyhound racing and I am a member of the National Greyhound Assoiciation, but that's it. The last racing dog I owned, "Waylan The Greyt", was retired and placed as a pet last fall. In 13 years as an owner/breeder I made money one year.

I did it for the love of the dogs and I certainly never expected anyone else to make up my financial losses.

Now, I'll accept your apology.

Just as a note: I also owned "Streamliner" and "Hiballin Z Train".

Ken Strawbridge

Interesting. A letter just two and one-half years ago ... Strawbridge accused of "spreading industry propaganda" ... can't imagine ...

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2003/11/19/HO113090.DTL

"Greyhound lovers need no help from racing spokesman

Editor -- Regarding Eileen Mitchell's articles describing her rescued greyhound's lovely antics ("How do I love thee?" Dog's Life, Nov. 8), it never ceases to amaze me the lengths that the racing industry spokesperson, Ken Strawbridge, will go to in order to spread industry propaganda at the expense of hardworking greyhound advocates; advocates who have been instrumental in uncovering greyhound abuses and deaths for the last two decades.

As I read proclamations from Mr. Strawbridge of how humane the greyhound racing industry is, one question comes to mind: Mr. Strawbridge, why are you, and your industry, completely out of touch with the abuses and deaths uncovered by the Greyhound Protection League if your industry is effectively self-policing? And at what point do the number of greyhound deaths no longer fit your definition of "isolated," a popular industry term so often quoted by you and your like in the media?

If your industry was truly humane, Mr. Strawbridge, then it would be your industry uncovering all these abuses and not the mother of two with a full- time job that lives in a nonracing state, and other such hardworking volunteers.

The industry will do itself a favor by acknowledging and encouraging the hard work of outsiders who have for years exposed greyhound cruelty and fought to bring the perpetrators to justice, instead of attempting to publicly humiliate them. But that would require a sense of humanity. "

Sounds like the rail industry comments as well. Maybe arbfbe deserves the apology ...

[rrandb]

QUOTE: Originally posted by MichaelSol

QUOTE: Originally posted by MP173
I have made my points, and quite clearly so. Nearly all costs involved in agriculture have increased over the past 30 years.

Question: did rail rates to Montana wheat shippers go up or down as a result of becoming captive shippers after the Milwaukee Road left?

Up. Was the area able to generate enough proffitable traffic to justify more than one railroad. No

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