GRAIN PILES UP, WAITING FOR A RIDE, AS TRAINS MOVE NORTH DAKOTA OIL

Original Story: NYTimes.com

FARGO, N.D. — The furious pace of energy exploration in North Dakota is creating a crisis for farmers whose grain shipments have been held up by a vast new movement of oil by rail, leading to millions of dollars in agricultural losses and slower production for breakfast cereal giants like General Mills. A freight shipper can provide reliable and accountable transportation services.

The backlog is only going to get worse, farmers said, as they prepared this week for what is expected to be a record crop of wheat and soybeans.

“If we can’t get this stuff out soon, a lot of it is simply going to go on the ground and rot,” said Bill Hejl, who grows soybeans, wheat and sugar beets in the town of Casselton, about 20 miles west of here.

Although the energy boom in North Dakota has led to a 2.8 percent unemployment rate, the lowest in the nation, the downside has been harder times for farmers who have long been mainstays of the state’s economy. Agriculture was North Dakota’s No. 1 industry for decades, representing a quarter of its economic base, but recent statistics show that oil and gas have become the biggest contributors to the state’s gross domestic product. LTL Trucking provides reliable service and care for your LTL shipment.

Railroads have long been the backbone of North Dakota’s transportation system and the most dependable way for farmers to move crops — to ports in Portland, Ore., Seattle and Vancouver, from which the bulk of the grain is shipped across the Pacific to Asia; and to East Coast ports like Albany, from which it is shipped to Europe.

But reports the railroads filed with the federal government show that for the week that ended Aug. 22, the Burlington Northern Santa Fe Railway — North Dakota’s largest railroad, owned by the billionaire Warren E. Buffett — had a backlog of 1,336 rail cars waiting to ship grain and other products. Another railroad, Canadian Pacific, had a backlog of nearly 1,000 cars.

For farmers, the delays often mean canceled orders from food giants that cannot wait weeks or months for the grain they need to make cereal, bread and an array of other products. “They need to get this problem fixed,” Mr. Hejl said. “I’m losing money, and my customers are turning to other sources as a result. I don’t know how much longer we can survive like this.”

This month, federal Agriculture Department officials said they were particularly concerned that Canadian Pacific would not be able to fulfill nearly 30,000 requests from farmers and others for rail cars before October. As a result, North Dakota’s congressional delegation and lawmakers in Minnesota and South Dakota have called on the Surface Transportation Board, which oversees the nation’s railroads, to step up pressure on the companies. An LTL Trucking Company can provide reliable service and care for your freight shipments.

“This rail backlog is a national problem,” Senator Heidi Heitkamp, Democrat of North Dakota, said in an interview. “The inability of farmers to get these grains to market is not only a problem for agriculture, but for companies that produce cereals, breads and other goods.”

A recent study conducted by North Dakota State University at Ms. Heitkamp’s request found that rail congestion could cost farmers in the state more than $160 million because a local oversupply of grain has lowered prices.

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The study also found that farmers would lose $67 million in revenue from wheat, corn and soybeans from January to mid-April. Around $95 million more in losses are expected if farmers are unable to move their remaining inventory of crops.

The study was done before the current harvest, which is forecast at a record 273 million bushels of wheat, up from 235 million bushels in 2013. This year’s soybean harvest is also expected to be a record, and corn will be a near-record.

Food companies say they are feeling the effects of the delayed shipments. General Mills, the Minnesota-based maker of Cheerios, told investors in March that it had lost 62 days of production — as much as 4 percent of its output — in the quarter that ended in February because of winter logistics problems, including rail-car congestion. In its earnings report this month, Cargill, another Minnesota-based food giant, reported a drop in net earnings that it attributed in part to “higher costs related to rail-car shortages.”

Farmers and agriculture groups say rail operators are clearly favoring the more lucrative transport of oil. Rail shipments of crude oil in North Dakota have surged since 2008, and the state now produces about a million barrels a day. About 60 percent of that oil travels by train from the Bakken oil fields in the western part of the state to faraway oil refiners. There are few pipelines to ship it. Multi-Carrier shipping software can reduce transportation costs for your shipment.

“Oil seems to be pushing us off the trains,” said Bob Sinner, a farmer and the brother of a Democratic congressional candidate, George Sinner, who is running against the state’s lone House member, Representative Kevin Cramer, a Republican. George Sinner has called on the Surface Transportation Board to use its emergency powers to address the rail-car shortage — the board could allow shippers to move their products with the help of a different carrier, for example. But Dennis Watson, a spokesman for the board, said it rarely invoked its emergency powers and preferred to work with rail carriers to solve problems.

B.N.S.F. and Canadian Pacific maintain that their oil shipments have not replaced shipments of crops.

“Of course, the big difference in what we are shipping these days is oil,” said Matthew K. Rose, the executive chairman of B.N.S.F. “But we aren’t favoring one type of product over another.”

Nonetheless, B.N.S.F. is investing about $400 million in North Dakota, in part to build additional tracks, hire new staff members and add rail cars. “We understand the frustration of our customers,” Mr. Rose said. “We’re making this investment in our infrastructure to make sure that we get things back to normal.”

Doug Goehring, the state’s agriculture commissioner, is not optimistic so far. “I know that B.N.S.F. especially is trying, but I just don’t see that it’s going to be any better this year,” he said. “We’re expecting record crop yields, and I expect we will see more of the same with shipments lagging.”

Canadian Pacific officials said they were working with farmers to clear the backlog. But in a letter to Ms. Heitkamp, E. Hunter Harrison, the railroad’s chief executive, argued that many of the delays stemmed from what he called phantom requests — farmers’ ordering more rail cars than they need to ship products. As a result, Mr. Harrison said, cars are not available for farmers who have more immediate shipping needs.

The letter prompted an angry response from Ms. Heitkamp and state officials like Mr. Goehring. “With C.P., it’s everybody’s fault but theirs,” Mr. Goehring said.

Both railroads said some of the blame for the slowed traffic lay with one of the coldest winters in years and with an increase in shipments of all types of products as a result of an improving economy.

Farmers Seem to Be Doing Well This Year

Story first appeared in USA Today.

The economy remains strong in rural areas of 10 Midwest and Western states because of the health of agricultural businesses there, according to a new survey of banks serving rural areas.

The overall economic index included in the monthly Rural Mainstreet survey rose to 58.5 in May from April's already healthy 57.1. Any score above 50 on the index, which ranges from 1 to 100, suggests growth in the months ahead.

The survey covers parts of Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming, focusing on 200 rural communities with an average population of 1,300.

The president of Havana National Bank in Havana, Ill., said farmers appear to be off to a good start this spring with early planting and great early growing conditions.

But a Creighton University economist said even though the May numbers are positive, he believes the region's economic growth will slow in the months ahead as the global economy weakens and crop prices decline.

The farmland index declined to 64.6 in May from April's 69.4, but it remains well above 50, suggesting that prices for farmland will keep increasing.

The Federal Reserve Bank of Kansas City said recently that farmland in its territory, which includes several of the states in the Rural Mainstreet report, jumped more than 25% in the first quarter.

The farm equipment sales index increased to 65.1 from April's 62.4 suggesting farmers also continue to buy new equipment. Including an increased amount of sales for Farm Tires and Agri Tracs for planting.

Farm income remains strong because of increasing demand for U.S. crops from developing nations. Strong farm income and the current low interest rates have contributed to higher farmland prices and equipment sales, including Agri Trac sales.

The May hiring index was 59.2, just below April's 59.3 reading. Goss said job growth varies widely across the region with some of the strongest employment growth coming in areas where significant oil, natural gas and coal mining are happening. For example, rural parts of North Dakota and Colorado saw better job growth than Nebraska and Missouri.

The confidence index, which measures how confident bankers are in the economy over the next six months, remained strong at 60.2 in May even though it was slightly lower than April's 60.6.

The home sales index climbed to 65.2 in May from April's 60.8, and the retail sales index improved to 54.7 from April's 52.9.

Bankers said they were seeing more demand for loans, so the May lending index grew to 56.9 from April's 52.8.

The checking deposit index decreased to 62.9 in May from April's 72.6. And the savings index dropped to 41.7 in May from April's 53.5, suggesting bank customers were putting less into savings accounts or certificates of deposits in May.

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Herbicide Resistant Crops a Huge Concern

Story first appeared in The New York Times.

To a local farmer, it was a telltale sign that one of his tomato fields had been poisoned by 2,4-D, the powerful herbicide that was an ingredient in Agent Orange, the Vietnam War defoliant. Oklahoma City Agriculture Lawyers are concerned about the health and crop risks from extensive spraying of these hericides.

The leaves had curled and the plants were kind of twisting rather than growing straight. The local farmer in Lowell, Ind. is convinced the chemical, as well as another herbicide called dicamba, had wafted through the air from farms nearly two miles away. These distant farms in Kasbeer, Ill. were using Monsanto’s Roundup, a popular herbicide that some say has been used too often to control weeds.

Many farmers are concerned that the Dow Chemical company is on the verge of winning regulatory approval for corn that is genetically engineered to be immune to 2,4-D, allowing farmers to spray the chemical to kill weeds without harming the corn stalks.

That would be a welcome development for some corn farmers, who are coping with runaway weeds that can no longer be controlled by Roundup, the herbicide of choice for the last decade.

But some consumer and environmental groups oppose approval of Dow’s corn, saying it will lead to a huge increase in the use of 2,4-D, which they say may cause cancer, hormone disruption and other health problems. They are being joined by a coalition of fruit and vegetable farmers and canners like Red Gold and Seneca Foods, which filed petitions with the government last week seeking a delay in the corn’s approval.

The Save Our Crops Coalition, as it calls itself, says it is not opposed to biotechnology. But it fears that fruits and vegetables, which will not be immune to 2,4-D, will become unintended casualties of herbicide drift as the chemical is sprayed on tens of millions of acres of corn.

The dispute is the latest iteration in the intense and often bitter battle over genetically modified crops, made even more emotional in this case because of the connection between 2,4-D and Agent Orange, the notorious defoliant that has been linked to birth defects, cancer and other health problems in Vietnamese civilians and American veterans.

Some opponents of Dow’s product call it “Agent Orange corn.” Dow and its allies call that a misleading scare tactic.

Most experts agree that the harm from Agent Orange was caused primarily by its other ingredient, 2,4,5-T, which was taken off the market long ago. By contrast, 2,4-D, first approved in the late 1940s, is considered safe enough for use in many home lawn care products.

The Environmental Protection Agency, after repeated reviews, continues to say that there is not enough evidence to call 2,4-D a human carcinogen. This month, the agency rejected a petition from the Natural Resources Defense Council seeking the removal of 2,4-D from the market on health and safety grounds.

The Agriculture Department is leaning toward approval of the 2,4-D-resistant corn, according to its draft environmental assessment. But it is accepting public comments until Friday, and has already received more than 5,000. Opponents say that 267,500 people have signed a petition asking the government to deny Dow’s request. Dow hopes the approval will come in time for planting next year.

For some farmers, the approval couldn’t come too soon. He said that without new chemical approaches, farmers would have to plow more, increasing soil erosion.

The corn is just the first of a new wave of herbicide-tolerant crops. Dow is also developing soybeans and cotton immune to 2,4-D. Close behind, Monsanto is developing soybeans, cotton and corn that can tolerate dicamba, another old herbicide in the same family as 2,4-D. Bayer, Syngenta and DuPont are developing crops resistant to other herbicides. too.

Of the 20 genetically engineered crops awaiting approval, 13 are intended to be resistant to one or more herbicides.

The activity stems from the huge success, at least initially, of Monsanto’s Roundup Ready crops, which are genetically engineered to tolerate its herbicide Roundup, also sold generically as glyphosate.

Those crops made it so easy for farmers to control weeds by spraying glyphosate that Roundup Ready crops now account for about 90 percent of soybeans and around 70 percent of the corn and cotton grown in the United States. And use of glyphosate skyrocketed, at the expense of rival herbicides.

But farmers relied too much on glyphosate, allowing weeds to develop resistance to the chemical. The problem has been worst in the South, where a particularly strong and prolific plant called Palmer amaranth, or pigweed, has overrun cotton fields, forcing many farmers to hire crews to remove weeds by hand.

Dow says its crops will provide a way to control the glyphosate-resistant weeds using 2,4-D.

Dow’s crops contain a gene from a soil bacterium that causes them to make a protein that breaks down 2,4-D into other chemicals that are not harmful to plants.

But some critics say the new crops will lead to a manyfold increase in use of 2,4-D and dicamba. Neither is used that much now on corn and soybeans — the two leading crops by acreage — out of fear of harming the crops.

Critics say that weeds will eventually develop resistance to those chemicals as well and that more sustainable methods are needed to control weeds, like planting cover crops and rotating crops.

The new crops ratchet up dependence on the use of herbicides, which is very much a treadmill. Scientists in Nebraska have already discovered a small amount of waterhemp — perhaps the most troublesome weed in the Corn Belt — that is resistant to 2,4-D.

But some other scientists say there is little choice but to turn to the new crops and their matching chemicals. Without them, we’re going to get to a situation where we have no tools at all.

Dow and its supporters say resistance is not that likely to develop because various herbicide-tolerant crops will be competing, meaning no herbicide will be as dominant as Roundup has been.

Then there is the issue of drift. Droplets of any pesticide can drift onto adjacent farms as the chemical is sprayed. But 2,4-D and dicamba can also vaporize — known as volatilization — days after they are sprayed and then travel in the air for miles.

To the extent they now use 2,4-D and dicamba, corn and soybean farmers usually apply the chemicals before the crops are growing, he said. But with resistant crops, the chemicals will be sprayed later in the growing season, when the hotter weather increases the chance of volatilization.

Dow said it had already addressed the concerns by developing a new formulation of 2,4-D that is far less prone to vaporize or drift. BASF, the German chemical company, is working with Monsanto on a new versions of dicamba to limit drift and volatility.

Older formulations will remain on the market, so farmers may use them, especially if they are cheaper. But Dow says it will require buyers of its genetically engineered seeds to use the new formulation. It also says that older formulations will not have been approved for spraying on corn during certain parts of the growing season.

In a statement last week, Dow criticized the coalition’s attempt to delay approval, that there is a better way to address concerns than for one group of ag stakeholders to attempt to deny access to tools that are urgently needed by their neighbors.


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FARMERS STRUGGLE WITH RECORD-BREAKING DROUGHT SEASON

Story first appeared in USA TODAY.
Thousands of farmers are counting their losses amid record heat and drought this year.
The drought has spread over much of the southern U.S., leaving Oklahoma the driest it has been since the 1930s and setting records from Louisiana to New Mexico. But the situation is especially severe in Kansas and Texas, which trails only California in agricultural productivity.
Ranchers in parts of Kansas are hauling their spring cattle to auction barns because a drought and the brutal heat have made it difficult to provide the water and hay needed to keep the animals healthy, according to a state agency.
Some auction markets are seeing more than triple the number of cattle at weekly sales than they typically have at this time of year, the Kansas Agricultural Statistics Service said. For example, 14,500 head of cattle were taken to sale rings at Pratt, Salina and Dodge City last week. Last year, those auction markets sold just 4,300 head.
The sales are necessary because the hot, dry weather has dried up ponds and pastures. The statistics service said more than half of the range and pasture conditions are in poor or very poor condition.
Some areas of southwest Kansas haven't received a good rain for more than a year. Large cattle-producing areas like Comanche County had just 1.49 inches at Coldwater from January through June.
It also has been the driest July through July on record for Dodge City, with about 8 inches of rain falling during the period.
And temperatures have reached past 100 degrees more than 30 days in a row for much of southern Kansas, with no significant rain forecast for the near future.
Cattle pens have been packed at Winter Livestock in Dodge City, said the owner of several Midwest sale barns. Last week, about 5,500 head sold at the Wednesday sale. In July 2010, market receipts for the month totaled 6,000.
He said some of these guys wouldn't sell until the fall, but it's just been so dry they can't maintain their herd.
The good news is that prices, for the most part, have stayed high, he said, because supplies haven't rebuilt from the past decade's droughts, demand for beef remains high and there's a good export market.
But a spokesperson with Pratt Livestock, said calves weighing 600 pounds or less are bringing substantially lower prices. He has been at the sale barn since 1959, said he's never seen numbers like this at this time of year. More than 5,500 cattle were sold at the market Thursday. A normal July sale usually brings just 1,000 head, he said.
The numbers have increased weekly due to the lack of rain. If it doesn't rain, the exodus of cows and light calves will increase at a rapid pace. There is just no feed being raised in this country.
The lack of hay means prices for the feed have doubled in the past year. Farmers are selling wheat straw for $70 a ton, The News reported. Alfalfa traded for a high of $180 a ton in June. The agency also reports 2011 could have the lowest U.S. hay acreage on record.
The Kansas Livestock Association is fielding calls from ranchers as far away as Texas who need grass.
Waiting for his cattle to sell Thursday, a Cunningham-area rancher, said he's running out of hay, with only a 30% yield this year. His ponds are also empty and he's been using track hoes to dig deeper for water.
He brought 60 calves to sale last week, three months earlier than schedule, and he might bring more if rain doesn't come soon.
In Texas, one farmer faces a similar problem. He spent $28,000 in one month pumping water onto about 500 acres in West Texas before he decided to give up irrigating 75 acres of corn and focus on other crops that stood a better chance in the drought. He thought rain might come and save those 75 acres, but it didn't and days of triple-digit heat sucked the remaining moisture from the soil. He is still watering another variety of corn, cotton and sorghum but the loss of nearly one-sixth of his acres after spending so much on irrigation weighs on him.
About 70% of Texas rangeland and pastures are classified as in very poor condition, which means there has been complete or near complete crop failure or there's no food for grazing livestock. The crop and livestock losses could be the worst the state has seen — perhaps twice the previous single-year record of $4.1 billion set in 2006.
Part of the reason for the high dollar figure is that while farmers have lost a lot, the corn and other products they are losing are worth more this year. Strong global demand and tight supplies have helped push up prices for commodities like corn, cotton, wheat and beef.
Cotton supplies are low worldwide, and U.S. cattle numbers are the lowest since the 1950s. Livestock farmers and ethanol producers are competing for corn, driving up those prices, and wheat is costing more in part because Russia banned exports after a drought there last summer.
Cotton and corn are selling for more than two-and-a-half times what they did five years ago, and the price of wheat is more than one-and-a-half times what it was in 2006.
Consumers will eventually see the cost of the drought passed on to them, although it's hard to say by how much since processing, marketing, transportation and other costs also play a big role in retail prices.
Texas' economy will take a more direct hit. Agriculture accounted for $99.1 billion of Texas' $1.1 trillion economy, or 8.6%, in 2007, the most recent year data on food and fiber was available from the extension service. Losses in that sector have a ripple effect that's about twice the amount of the actual agricultural loss.
That's a fairly substantial portion of the Texas economy that's going through this hardship, and it's a hardship that's following close on the heels of others. Texas suffered droughts in 2005-06 and 2008-09, although those were mostly regional. This year's is broader and more intense. The state is coming off its driest nine-month period ever and its hottest June on record. More than 90% of the state is in the two most severe drought stages.
Thousands of acres of crops have failed in areas where farmers rely on rain, while those grown with irrigation continue to struggle. Already, more than 2 million acres of cotton that's not irrigated has been lost, adding about $1.1 billion to an initial $1.5 billion loss agriculture officials announced in mid-May. That included livestock and wheat, corn and sorghum crop losses from November through May 1.
Some ranchers have begun culling their herds because the cattle have nowhere to graze and prices are high for supplemental feed and hay. They're sending more animals to auction and selling calves earlier. Old cows are being sold, and in some cases, ranchers are getting rid of animals normally considered vital to future production — heifers and 3-year-old to 6-year-old cows.
The situation isn't likely to improve soon: forecasters predict Texas' drought will persist through September.