Record US Rail Fuel Surcharges Hit Farmers Hard
Railroad fuel surcharges on grain shipments in the US have reached record highs, affecting farmers during harvest season.
The average fuel surcharge rate for grain shipments climbed to 48 cents a mile per rail car in early September, up 153% compared to last year's average, according to USDA data. This represents 11% of total rail transportation costs for shipping corn and soybeans, an increase from 5% a year ago.
Farmers are struggling with higher production costs and lower prices due to the surcharges. 'We don't even like to look at it, because it just upsets you,' said Gary Millershaski, a wheat and sorghum farmer in Kansas.
The rising cost of diesel fuel has led to increased fuel surcharges, which railroads use to recover most of their fuel costs. The US On-Highway Diesel Fuel Index has risen about 60% year over year, triggering the surcharge escalation.