US Grain Farmers Hit by Record-High Rail Fuel Surcharges Amid Iran Conflict
US grain farmers are facing rising fuel surcharges on rail shipments, hitting record highs as the global conflict with Iran drives up oil prices. According to data from the US Department of Agriculture, the average fuel surcharge rate per mile per rail car has increased by 153% compared to last year, reaching 48 cents.
The high cost is particularly challenging for farmers during harvest season, as corn and soybean shipments are in full swing. Gary Millershaski, a Kansas farmer, noted that the basis at his local grain elevator was around 70 cents below Chicago Board of Trade K.C. hard wheat futures, up from its normal rate.
The rising fuel surcharges can have a ripple effect on farmers' profits, as they often pass along some of the cost to growers in the form of lower cash prices for grains. Frayne Olson, an expert on crop economics at North Dakota State University, pointed out that many corn and soybean growers rely heavily on railroads due to their limited access to inland waterways.