I have noticed fewer trains sitting in the siding I pass daily. I am not sure if this is due to the economy of the complaints by the city and local residents about fouled crossings. I do not believe that the economy is really in that bad of shape. I think that the biggest concern is the election and what will be the futue of the economy. I know several small to medium size business that are developing business models for both likely outcomes. The fear that I have seen is that a deomcrate socialist win will lead to the expansion of government regulation and that some traditional operations will cease. If the free market republicans win the belief is that some business areas based upon current regualtion will cease. No one really seems to know what the next year will hold. This is not intended to be political but a reflection of what I have heard.
I think that the nation is looking for a steady hand in the whitehouse that will bring the nation together and moeve forward on the few issues that we agree upon. If we have this feeling then the nerves in the economy will settle. If we do not find a steady hand then the next few years could be a little rough.
I will also say that the corporate lies of Enron and other have created laws that are now scaring the general public. Every day we hear about subprime loans that are now considered to be risky. Many corporate leaders are presenting the worst case scenarios to cover themselves even when they may not reflect the real situation. Yes, forclosures are up and the housing market is overbuilt in some areas. We need to calm down and see how things work out for a while. If we jump to conclusions, we may find out that we are making things far worse than they actually are. The railraods are sensing the unease in the economy and they are adjusting their budgets accordingly as is the rest of the economy. I think that we will be okay if we will calm down. The sun w
In eastern S.D., I’d have to say that my percetion is that business up. Our portion of the world has a pretty healthy economy right now, so inbound shipments of things is probably not much different than last year. Outbound loads of our main commodities, grain, ethanol, and big pink rocks seems to be the equal of years past.
For the eastern part of the state, the posperity is ag based. Grain prices are waaaay up. Locally, we seem to be blessed with hospitals,banking,distribution, agriculture, and constuction([:D]!). The ethanol “boom” does seem to add a lot of traffic to BNSF in our area, and DM&E a little further north. An ethanol plant near Madison, S.D. seems to have revitalized a lightly used, dead-end branch line. A friend of mine, who works for BNSF, tells of a train taking corn hoppers to the ethanol plant at Wentworth. It then went the 7 miles to the end of the line at Madison, picked up corn hoppers from the elevator, and shipped them out-past the ethanol plant! Weird huh?
The higher prices on corn are from the demand by ethanol. With that demand, it is also raising the price on other grains as well [soybeans are up to almost $12 a bushel], because as the corn acreage increases, the acreage other grains declines.
The hoppers your friend was talking bout, were most likely going to fill a contract at a terminal [barge shipper maybe]. The way it works is; a farmer contracts delivery of 5,000 bushel at his local elevator at $4 for Jan. delivery, the elevator may then either sell that contract to a terminal [or processor] for $4.25 or make a different contract for the same 5,000-bushel
New breeds of corn are always being developed for different uses. The best for ethanol I think is the food grades because of the higher sugar [starch] content. The higher the sugar, the more alcohol, but most any corn can be used, other than popcorn.
Popcorn is a very specialized variety and it is raised differently. The popcorn processor contracts with farmers to plant, fertilize, weed, generally care for and harvest seed supplied by them. Effectively, the popcorn company rents the land, the farmer’s equipment and the farmer’s labor for the season. The payment arrangement may vary some, but in general it is a per acre fee plus a bonus based upon yield.
Since the resulting crop can not be commingled with any other variety, the areas in which popcorn contracts are offered tend to be compact in nature. One exists around the small community of Schaller, Iowa. Those are American Popcorn Company (Jolly Time) contracts.
Murphy’s general observation about corn and bean farmers enjoying a period of greatly increasing demand despite near record producton is right on target. However, for the railroads is is a mixed picture in terms of carloadings. The increased crop is largely going to ethanol plants by truck. The ethanol leaves by rail or by a short truck haul to rail concentration point such as is being built at Manley, Iowa. The other product of a ethanol plant is the used mash, which may leave by truck in wet form for use by local animal feeders or by railroad in dry form for more distant animal operatons.