US Grain Shippers Face Record Fuel Surcharges Amid Iran Conflict

The US Department of Agriculture has reported that fuel surcharges on grain shipments by rail have reached record highs, hitting 48 cents a mile per rail car in the second week of September. This represents a 153% increase compared to the same period last year.

According to the USDA's data, surcharges now account for 11% of total rail transportation costs for shipping corn and soybeans, up from 5% a year ago. The higher fuel prices are due in part to the ongoing conflict with Iran, which has driven up crude oil and refined product prices.

For farmers, this is particularly challenging as they begin their harvest season. 'We don't even like to look at it, because it just upsets you,' said Gary Millershaski, a wheat and sorghum farmer in Kansas.

Railroad analysts expect surcharges to remain elevated for the rest of the year, which could further exacerbate the problem of transportation costs. 'Everybody is quick to raise the fuel surcharges and very, very slow to pull them back,' said Steve Compton, a Kansas farmer.