With bumper US harvests, a drought in Russia is boosting Wheat prices. As the US harvest is coming in lots of US grain moving to export. Story here
As of last night BNSF had 24 Westbound grain trains on the lineup at Whitefish, MT. Crew availability is likely to cause some of these to fall back. But this good news for US Railroads and Farmers, at the expense of consumers.
Some of us remember the “grain deals” of the 1970s, which were mostly political attempts to establish warmer relations with the USSR (and perhaps score a few propaganda points as well) while also benefiting the grain farmers. Naturally there were bumps in the road – farmers who had sold futures before the deals were announced felt left out; consumers claimed they were paying higher food prices to help subsidize the commies, cries of “let the Rooskies starve” were heard in the land, and so on. But it played a big role in making grain a major shipping load for the railroads to the east coast ports. It also seemed to hasten the inevitable end of the grain loaded 40 ft boxcar.
It remains to be seen whether US consumers pay more - depending on how much of this wheat was surplus.
Dave Nelson
Michigan crops, corn, soybean, wheat, have had a bumper year. Should make for a lot of covered hoppers moving.
Wheat in Ukraine is also suffering from severe drought, while in Australia the problem is too much moisture. However, wheat crops in eastern Washington and north central Idaho are having one of their best harvests ever. One guy I visited on the Camas Prairie yesterday said they’re expecting 100-bushel acres around here.
Closer to where in live in the Coeur d’Alene area, land on the Rathdrum Prairie that used to grow bluegrass has been instead growing wheat the past couple of years. Between the strong wheat prices and dismal housing market, farmers have been able to fend off the spread of suburban sprawl that was devouring much of north Idaho’s prime farm land.
Back down here around Lewiston, Idaho, where I’ve spent the past four days, everyone is waiting to see what happens when barge service down the Snake and Columbia rivers is closed for four months beginning this December, due to major repairs on some of the locks and dams. It has been assumed that railroads would pick up the slack, since much of the summer/fall harvest takes several months to completely haul out. But railroaders and grain loaders I’ve talked to down here think the farmers may just stockpile at the elevators and whereever else they can until barge service resumes.
Either way, with this morning’s NPR report that worldwide wheat prices may nearly double this year, from an average $3.50/4.00 per bushel up to $6.00, American wheat growers should make out well. I haven’t heard anything official on Canadian grain this week, but one friend I have up in B.C. says the central Canadian crops encountered too much rain earlier this year and may be down in their yield. And don’t let those higher wheat prices spawn fears of sky-high price increases for food. According to the report I heard today, a doubling in wheat prices should only result in a 5-cent increase on a loaf of bread. We’ll see…
I would wonder if the number of covered hopper cars reflects the crop status (Bumper crop)?
Is the number of cars in storage status up or down? Crop quality seems to be spotty around here. Rreflective of the rain coverage in South Central Kansas. There are really, good fields, then some seem almost to be burned up by sun.