Thune, Klobuchar request study on economic impact of Midwest rail backlog

By Spencer Chase

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WASHINGTON, Oct. 1, 2014 - Two U.S. senators are requesting a USDA study on the rail backlog in the Upper Midwest and its economic impact on their states' agriculture, food processing and ethanol industries.

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Senators John Thune, R-S.D., and Amy Klobuchar, D-Minn., sent a letter to Agriculture Secretary Tom Vilsack today calling on USDA to conduct a thorough economic analysis on the problem. The senators say “no regional or national studies have been conducted to assess the economic impact of these rail service challenges.”

Arthur Neal, a deputy administrator with the Transportation and Marketing Program in USDA's Agricultural Marketing Service, testified at a Sept. 10 Senate Commerce Committee hearing. The senators said his testimony “stressed the significance of these critical issues to many of America's agriculture producers and grain elevators.”

Thune, the ranking member of the Commerce Committee, and Klobuchar, a panel member, cite a University of Minnesota study showing the state's farmers lost almost $100 million between March and May this year due to backlog in the rail system while suggesting the potential for another $124 million in lost revenue. The lawmakers say Neal's testimony and studies such as that conducted by the University of Minnesota can only do so much and that further analysis is needed.

“While very useful, such reports tell only part of the story,” Thune and Klobuchar said in the letter. “Therefore, we respectfully request that the USDA conduct a more detailed economic analysis of the ongoing transportation challenges facing producers and agricultural end-users in our region, including food processors, livestock producers, and ethanol refiners.” 

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