Moving Grain: Union Pacific to Invest $57M in Nebraska Rail Infrastructure

Photo by Ken Hammond, USDA

Union Pacific Plans to Invest $57 Million in its Nebraska Rail Infrastructure

In an April 24 news release, the Union Pacific Railroad (UP) noted its plans to spend $57 million in infrastructure investments in Nebraska this year, with $53 million to maintain railroad track. According to the press release, UP invested more than $638 million in the State from 2012 to 2016.

Nebraska is typically the Nation’s third largest producer of grain and oilseeds (behind Iowa and Illinois). In 2016, Nebraska farmers harvested 2.08 billion bushels of corn, soybeans, and wheat, up 6 percent from the 3-year average. Rail is an important mode for grain shippers in the State, with railroads transporting over 30 percent of production on average from 2009 to 2012.

Improving Rail Service Performance in the Pacific Northwest

Last week, BNSF Railroad (BNSF) said it was continuing to improve service performance in the PNW and address congestion at area terminals and facilities. In its service bulletin, BNSF wrote, “Overall car velocity in our Northwest Division has increased by more than one-third from the lowest year-to-date levels reported in early February.

While still underperforming versus the levels reported from the previous April, our aggressive efforts to deploy additional resources and take actions, such as modifying some service plans, have been key to driving productivity improvements.” The railroad also noted that traffic flows have returned to normal in Texas, following an earlier outage in Hereford.

Higher Corn and Soybean Inspections Push Total Exports Up

For the week ending April 20, total inspections of grain (corn, wheat, and soybeans) for export from major U.S. export regions reached 2.7 million metric tons (mmt), up 10 percent from the previous week, up 45 percent from the same time last year, and 33 percent above the 3-year average.

The increase in total grain inspections was driven by increased corn and soybean inspections, which increased 9 and 42 percent, respectively, from the previous week. Wheat inspections decreased 11 percent from the past week. Compared to the previous week, grain inspections jumped 40 percent in the Pacific Northwest (PNW), but decreased 2 percent in the Mississippi Gulf.

Outstanding export sales of grain were down for corn, wheat, and soybeans.

Snapshots by Sector

Export Sales

For the week ending April 13, unshipped balances of wheat, corn, and soybeans totaled 28 mmt, up 48 percent from the same time last year. Net weekly wheat export sales were .414 mmt, down 2 percent from the previous week. Net corn export sales were .756 mmt, up 2 percent from the previous week, and net soybean export sales were .211 mmt, down 48 percent from the past week.

Rail

U.S. Class I railroads originated 21,566 grain carloads for the week ending April 15, down 9 percent from the previous week, up 4 percent from last year, and up 8 percent from the 3-year average.

Average May shuttle secondary railcar bids/offers per car were $291 below tariff for the week ending April 20, down $24 from last week, and $102 lower than last year. There were no non-shuttle secondary railcar bids/offers this week.

Barge

For the week ending April 22, barge grain movements totaled 1,030,391 tons, 48 percent higher than the last week, and up 29 percent from the same period last year.

For the week ending April 22, 655 grain barges moved down river, up 48 percent from last week, 617 grain barges were unloaded in New Orleans, down 5 percent from the previous week.

Ocean

For the week ending April 20, 33 ocean-going grain vessels were loaded in the Gulf, 11 percent less than the same period last year. Thirty-seven vessels are expected to be loaded within the next 10 days, 34 percent less than the same period last year.

For the week ending April 20, the ocean freight rate for shipping bulk grain from the Gulf to Japan was $40.50 per metric ton, 1 percent more than the previous week. The cost of shipping from the PNW to Japan was $22.00 per metric ton, 1 percent less than the previous week.

Fuel

During the week ending April 24, average diesel fuel prices remain unchanged from the previous week at $2.60 per gallon, 40 cents higher than the same week last year.

Full report.


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