Larry Kline Havre Daily News lkline@havredailynews.com
Some grain producers walked away from a BNSF Railway-hosted meeting Wednesday in Havre satisfied with information presented by a number of top railroad executives, who spoke and used computer presentations and a promotional video to provide information about shipping rates, operational delays and grain market factors. Others were still frustrated by their status as captive shippers. Still others, one farmer said, didn’t bother to show because they thought the meeting was a waste of time. BNSF officials said they put on the meetings one was held in Wolf Point on Tuesday and another was set for Great Falls today to open lines of communication, lend an ear to producers’ problems and dispel some myths. Producers, state officials, politicians and railroad officials have long battled over a number of issues, and lately the hot topics have been shipping rates and the introduction of shuttle-loading facilities, which some farmers say have forced them to ship their grain longer distances by truck. Farmers on Wednesday said all they want is a fair shake. Some feel now that they’ve gotten it. “From a farmer’s standpoint, what I need to know is if I’m treated fairly,” Big Sandy grower Larry Bitz said. “I just want to make sure I don’t get stuck all the time. I don’t want to feel that way. Sometimes I do.” “This kind of meeting helps me out a lot,” he added. “I was satisfied with their answers,” Independence Bank loan officer Les Odegard said. “This was an excellent meeting. There should have been more people here.” About 40 people attended the meeting, and some were wary of the railroad’s motive. “I know that the reason that BNSF is doing this, and it’s good to get that information out, but it’s damage conTrol,” Havre farmer Bob Sivertsen said today. “It still has not satisfied the anguish of farmers in this area who are still in the belief that they are captive shippers. I don’t think (BNSF has) properly addressed that question yet.” He said attendance was lower than it should have been because some farmers “don’t think it will have a lot of impact, attending these meetings.” Still, it’s a good thing the railroad is getting out into the public, he said. “They’re trying to get out and provide information to the public on how the system operates ... and I think that’s good.” Big Sandy wheat producer Allan Pearson said farmers, as always, don’t have a lot of control over their situations. “What can we do? We’re captive, and no other way about it,” he said. BNSF spokesman Gus Melonas said about 35 people attended the meeting in Wolf Point. He said feedback from the producers was “extremely favorable.” “They feel, and BNSF agrees, that this opens the line of communication to enhance relations and understand each other’s needs,” Melonas said. The railroad plans to hold additional meetings in the future, he said, and Melonas also announced a new position at the railroad Don Karls will serve as an ombudsman for area producers and will be based in Great Falls. He will be available round-the-clock for information on train movement and to address producers’ questions, Melonas said. Karls’ number is(406) 210-2156.
BNSF vice president of agriculture Kevin Kaufman said it is vitally important for producers to talk to the railroad about perceived problems. “Sit down with me eyeball-toeyeball and talk, if you think there’s something ... inequitable,” he said. “I’m really trying to provide a good service at a reasonable rate. “We love agriculture,” he added. “We’re the only (railroad) putting money back into this.” He repeated the message that what is good for the producers is good for the railroad, and vice versa. “We want to grow your business,” Kaufman said. “We don’t make money if you don’t grow.” He said the railroad has spent $1 billion on ag-related improvements in the last five years. Over that time, BNSF has added 5,000 new cars for shipping ag products. The railroad adds as many as 400 new locomotives each year, he said. He said people often use old information to talk about rates. “We’re never discussing (rates) on the same information playing field,” Kaufman said. After the meeting, he said “very well-meaning people get conclusions that are inaccurate” because of old information. BNSF wheat marketing director John Davis said perbushel rates on 110-car shuttle trains, when adjusted for inflation, are cheaper than they were 25 years ago, adding that rates are down 10 percent from a high in 2004. He also used a line graph to show that wheat rates have declined relative to the rates for other commodities, such as corn and soybeans. The railroad has often heard producers complain that it costs less to ship grain in other parts of the country than it does to ship from Montana to the Pacific Northwest. Davis presented information showing that, in many cases, prices in other regions are similar to those here. “The rates are very similar across our system,” he added. “That surprised even us.” In Wichita, Kan., a city where BNSF has competition from Union Pacific, two short lines, and two nearby barge facilities, the per-mile rate for grain shipment is $3.41. Havre’s rate is $3.36 per mile, Davis said. Odegard pointed to the data listed for Hastings, Neb., where the per-mile rate is $2.90 per mile, 46 cents cheaper than Havre. Davis and Kaufman said shipping rates are marketbased, and that Hastings has different market factors. Davis today said that rates are lower in Hastings in part because competition terminal elevators nearby that ship domestic wheat to flour mills in the East. BNSF sets a lower rate to draw grain to the Gulf Coast for export. “We have a choice,” he said. “We could’ve kept that rate higher ... and chosen to compete at the domestic market, but we believe that taking Hastings grain to the Gulf for export” is a better situation. “In many cases there are different market factors that affect market prices,” he said. In Montana, regional mills and a Canadian Pacific branch line affect rates, he said. “We think our rates do make sense,” Davis said at the meeting. Some questioned the wisdom of making farmers truck their grain to shuttle facilities rather than to other elevators. “I’ve got to haul farther and farther and farther,” Bitz said.
Davis said that while shuttle facilities have increased the amount of short-haul trucking of grain in Montana, long-haul truck shipments have decreased. He said producers haven’t always shipped to the closest facility, citing one producer he knew had trucked grain to Idaho before the advent of shuttle facilities. As more shuttle facilities are built in the state, eliminating the need for 52-car facilities in some areas, producers will begin to see the rates on the shuttle trains drop more drastically in relation to 52-car trains, Kaufman said. “We’re not trying to shrink the number of facilities,” Davis said. “If there’s enough volume, these companies will build new stations.” The meeting included discussion of factors that affect BNSF operations, including limited siding space, weather-related problems such as rockslides and avalanches, and delays at the destination. Doug Reidner, a wheat exporter based in Kalama Wash., explained some possible delays at port elevators that at times affect the rest of the industry. The Pacific Northwest’s wet climate has a large impact on exporters he said, because rain prevents the loading of freight ships. This causes delays that can last days or weeks. “When it rains, everybody shuts down,” Reidner said. One woman asked if anyone in the industry had bothered to come up with a way to load the ships which have large openings on the main deck that are closed after the grain has been loaded when the raindrops begin to fall. Reidner said tarps and other coverings have been tried but no reliable solution to the problem has been found. State Department of Agriculture director Nancy Peterson said she understands that weather and other logistical concerns cause delays, but noted that rail officials did not mention the increase in Asian products being shipped across the rails in containers loaded on flat cars. “Our products in the U.S. get moved to the sidelines, if there’s not flat cars on them,” she said, referencing lines like the Big Sandy spur, which BNSF for months has used to store cars. She said “thousands” of such cars are stored on sidings across the state. Peterson said she’s frustrated with the closure of elevators, which force farmers to truck their grain to more-distant elevators. Farmers get hit with high costs whether they ship by rail or truck, she said. Shipping rates for Montana farmers need to be more fair, she added. “The captive shipper issues still are ongoing,” Peterson said. She’s pleased the railroad is seeking out farmers to talk about these and other issues. “I think it’s good they’re out and about ... and open to conversation,” Peterson said. “I hope there’s some frank discussion.” Peterson had to leave Wednesday’s meeting early because of another commitment, but said she would attend today’s meeting in Great Falls. State Rep. Bob Bergren, Dhavre, said Montana farmers are “subsidizing a company that has 42 percent net profit,” and Rep. Monica Lindeen, Dhuntley, said “Montana producers are paying the price.” “We want them to thrive but be fair to producers,” Bergren said of BNSF. Bergren and Lindeen echoed Peterson’s words by saying they are happy to see rail officials in town talking with producers. “These aren’t just loads of grain, these are people,” said Lindeen, who was wrapping up a seven-day campaign tour of the Hi-Line. She will vie for U.S. Rep. Denny Rehberg’s seat in November. Bergren is facing Havre City Council member Terry Schend in a state House race. Davis was pleased with the meeting and producers’ questions, which he said “weren’t always easy.” “We’ve certainly learned issues the farmers face,” Melonas said. “Our goal is to enhance service because it is a benefit for us all.” “I hope people understand the challenges of running a railroad,” he added.
