USA Rice Raises Rail Shipping Concerns to Surface Transportation Board

    Photo by Ken Hammond, USDA

    Last week, USA Rice submitted comments to the Surface Transportation Board (STB) outlining a number of rail shipping issues impacting the U.S. rice industry and urging the STB to take lasting actions that would resolve and prevent these issues from reoccurring.

    The comments highlighted the rice industry’s predicament of low rice prices and ever-increasing input costs, record-high inflation, and lower production forecast for 2022 that will ultimately have devastating impacts for the entire U.S. rice industry’s supply chain.

    “Our industry is in a unique situation where we are essentially the only commodity facing stagnant market prices yet expected to absorb the skyrocketing input costs that are plaguing all farmers, likely leading to a second year of decreased U.S. rice production,” said the comments.

    “This production decline will negatively impact rice farmers along with the entire infrastructure supporting the rice supply chain (e.g., mills, driers, and other agribusinesses), not to mention the rural communities that rely on the support from business generated by our industry.”

    The rice industry has made a concerted push over the last several years for customers to use rail over other methods of transportation given its efficiency, but ongoing issues including rail congestion, labor shortages, marginal equipment, and the lack of box and hopper cars to ship rice and rice by-products is hampering the industry’s ability to do so and causing shippers to resort to other, less efficient, and costly methods of transportation.

    These issues have resulted in crushing losses to not only rice shippers, but also rice end-users that have been forced to shut down production due to rice shortages.

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    “…there are secondary impacts for customers that are affected by not receiving our rice and rice by-products, including brewers, pet food companies, industrial cereal and food companies, and rice re-packers”, the comments continue. “Resulting rice shortages due to rail availability from the supplier’s side have impacted these companies’ production schedules causing shutdowns and production schedule adjustments.”

    USA Rice also noted that communication from Class I rail carriers, which is essentially non-existent, should be improved, and the need for accurate information from the carriers.

    The Agricultural Transportation Group, of which USA Rice is a member, also submitted comments to the STB, as well as the White House, administration officials, and Congress, calling for immediate action and outlining several near-term solutions that could be taken to start resolving issues and preventing future problems.

    The STB is holding a public hearing April 26 and April 27, 2022, on these recent rail service problems and recovery efforts involving several Class I carriers, including BNSF Railway Company, CSX Transportation, Inc., Norfolk Southern Railway Company, and Union Pacific Railroad Company. Officials from Canadian National Railway Company, Kansas City Southern Railway Company, and Canadian Pacific Railway Company were also invited to participate.

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