Business View - August 2015 19
Expanding America’s pipeline infrastructure would
relieve the nation’s overburdened freight rail net-
work and improve service for farmers nationwide,
according to a new study from the American Farm
Bureau Federation.
The booming energy business in the Upper Mid-
west spiked rail congestion and freight costs for
farmers in the region and cut their profits by $570
million during the 2014 harvest. The AFBF study
found that the average North Dakota corn farmer
may have received $10,000 less than the traditional
market rate for the crop. Increasing U.S. pipeline ca-
pacity - particularly in the Bakken region – is a prime
solution for adding freight system capacity overall
and relieving rail congestion, according to AFBF.
“American farmers depend upon rail freight to move
their products to market. The surge in rail transpor-
tation of crude oil has affected that ability and timing
in recent years,” AFBF Chief Economist Bob Young
said. “Construction of new pipelines would certain-
ly be a more effective way to move that product to
market. It would take crude oil off the rails and, in
doing so, improve the overall efficiency of the trans-
portation system. Improved pipeline infrastructure
will also help enhance American energy security for
everyone.”
Study author Elaine Kub said farmers face challeng-
es in getting their goods to market that others do
not.
“Due to the nature of grain production and use, the
industry is fairly inflexible about which freight meth-
ods it can use, so any time one of those methods
is unavailable, crops are lost or cost more to trans-
port,” she said. “This leads to more expensive food
for families and less profitable incomes for farmers.
Crude oil, however, can be more efficiently and af-
fordably shipped through pipelines, and can be done
without crowding already overstressed railways.”
The AFBF study also featured mathematically sim-
ulated scenarios showing how expansion of any
freight method – truck, rail, barge, or pipeline – can
reduce overall congestion and, in certain scenarios,
could increase the annual volume of grain moved by
as much as 14 percent.
About the American Farm Bureau Federation
With family members at the county or parish level
in all 50 states and Puerto Rico, the American Farm
Bureau Federation is the unified national “Voice of
Agriculture,” working to enhance and strengthen
the lives of rural Americans to build strong, prosper-
ous agricultural communities. AFBF is the nation’s
largest and most influential grassroots organization
of farm and ranch families.
