The congestion registered in the great railroads of the United States that delayed the shipment of new cars and coal now threatens to prevent the planting of areas of the Midwest, a region considered the American agricultural belt, to be carried out in time.
The rail troubles have delayed fertilizer shipments, raising fears that farmers in four big farming states, North and South Dakotas, Minnesota and Wisconsin, will run out of enough nutrients to plant corn, wheat and barley.
At the same time, producers have struggled for months to get enough cargo capacity on the railroads to ship last year's harvested grain to processing plants. Some fear that even if the planting takes place at the ideal time, they will not have enough space in the warehouses to store the harvest at the end of the year.
The country's lack of rail capacity is amplifying the anxiety that farmers in the region often feel at this time of year, when they need a long period of warmth and clear skies for planting to take place and plants to grow before the weather does. cold return.
The delays have already affected revenues for fertilizer producers, including Mosaic Co. and Agrium Inc., and have raised concerns among processors who rely on a continuous supply of grain to operate. Many corn ethanol producers have recently had to shut down their mill operations for several days because they couldn't get wagons to transport the grain.
Mosaic CEO Jim Prokopanko says the delay in the current planting season has been "unlike anything I've seen before." The Minneapolis-based company, one of the world's biggest fertilizer producers, was late delivering "many hundreds of tons" before the railroads ramped up moving goods again in recent weeks, says Prokopanko. Mosaic, which usually delivers 5 million tonnes of fertilizer a quarter, earlier this month reported a 43% drop in first-quarter profit, partly citing rail problems as the reason.
Growers now expect to receive enough fertilizer in time to finish fieldwork and planting before July. “It's urgent,” says Mark Watne, chairman of the board of the North Dakota Farmers Union.
The winter that hit the US with the heaviest snowfall and lowest temperatures in years has destabilized the rail system, the main means of transporting agricultural crops when rivers freeze over in the US Northeast. Cold temperatures forced the BNSF Railway Co., Canadian Pacific Railway Ltd. and others to operate with few trains, increasing traffic on the routes towards the Midwest. The average waiting time for some BNSF trains, on the Northtown line, in the State of Minnesota, reached 75 hours during the winter, compared to an average of 40,5 hours in the last 12 months, according to information from the company.
The greater demand for wagons also helped to amplify the problem. Railroads are carrying more crude oil from North Dakota's gigantic Bakken shale gas reserve region, and the economic recovery has driven more goods to be moved by rail, according to shippers.
Rail companies say they are investing billions of dollars in more tracks and working with their customers to speed up deliveries. Both BNSF and Canadian Pacific said they had accelerated fertilizer shipments in recent weeks after being challenged by the country's rail authorities.
The rail troubles hit the American farm belt shortly after the country recorded its biggest corn crop and one of the biggest soybean crops in history. The large supply, added to the harsh winter and delays of the railway lines, have raised concerns in the agricultural sector about the need for an infrastructure improvement to handle even greater agricultural production.
Researchers at North Dakota State University estimated this month that agricultural producers have lost $67 million in revenue since the start of the year because of delayed shipments of grains and soybeans. The South Dakota Corn Growers Association estimated that South Dakota producers still need to ship about 250 million bushels of corn (about 6,35 million tons), or 31% of the state's 2013 harvest, to create space in warehouses.
Without fertilizers, the profitability of some grains can reach half of normal, say producers. To try to ensure that grain elevators and farm input networks have enough fertilizer, the Land Transportation Council, a federal agency that regulates US railroads, last month required BNSP and Canadian Pacific to provide updates weekly updates on the progress of deliveries.
Ethanol companies are also facing similar problems. In recent months, businesses in the Dakota have been waiting weeks for the railcars to return, which has forced a production cut. “If we don't have railcars coming back, we have no choice but to shut down or slow down,” says Tom Hitchcock, CEO of Redfield Energy LLC. The company has already closed one unit and lost $1 million in revenue from the rail problems.
Source: Valor Econômico
By Jacob Bunge | The Wall Street Journal
By Evandro Monteiro/Valor
