JOINT PRESS RELEASE
September 22, 2005
For Immediate Release
Farm Groups Announce Re-Instatement of BNSF 52-Car Price Spread
Will Result in Lower Rates for Many Montana Facilities-
(September 22, 2005) – In a true win for wheat producers, a coalition of Montana farm groups announced today that BNSF Railway Company has agreed to reduce freight rates for wheat shipments of 52-109 car unit trains to the Pacific Northwest export market, effective October 1. BNSF had decided in June to apply the more expensive 26-car rate to 52-car trains. This resulted in a rate differential of 14 to 15 cents per bushel between 52-car units and 110-car shuttle trains versus the traditional spread of 4 to 5 cents. The new 52-car rate, effective October 1, will be $200 per railcar over the shuttle rate, a spread of about 5.8 cents per bushel for wheat.
Montana Farm Bureau Federation (MFBF), Montana Farmers Union (MFU), Women Involved in Farm Economics (WIFE), the Montana Wheat and Barley Committee (MWBC), and the Montana Grain Growers Association (MGGA) have been working with BNSF Railway to identify the value of competitive 52-car grain elevators to the Montana grain industry. WIFE president Pat Torgerson commented, “The viability of our 52-car facilities was at stake. Our farmers want to preserve the network of grain elevators in this state.” Brooks Dailey, MFU president, added, “Shifting the flow of grain to a handful of 110-car shuttle loaders increases the trucking expense for producers and places more load on our rural highways.”
While meeting with the ag groups, executives of BNSF agreed to run more detailed models of the flow of grain through their system. “We are very pleased that BNSF and Montana agriculture could work together to resolve this problem,” said Keith Schott, president of MGGA, “and although we differ on many issues, we found common ground with this one.” Dave McClure, MFBF president, agreed that this is a victory for Montana producers. “The distance between elevators in Montana, and competition between elevators are factors that have to be considered,” said McClure.
Don Fast, chairman of the MWBC, commented on the reduction of unit train rates, saying “Although disagreement remains with BNSF on the need for competition and overall rate reductions, we appreciate the spirit of openness by BNSF in resolving this issue.” Dan Kidd, a member of MFU, MFBF, and MGGA, stated “We are hopeful that further announcements benefiting our Montana producers will be made.”