The Oklahoma winter wheat crop is running above average this year, but the main reason we are seeing elevators plugged all over the wheat harvest area is a lack of rail service.

This situation is hurting Oklahoma wheat producers and elevators according to J.T. Winters, a wheat producer near Woodward and president of the Oklahoma Wheat Growers Association (OWGA).

Oklahoma’s winter wheat production is estimated to be over 148 million bushels and is up from the 98 million bushels in 2007 which was down 30 percent from the 10-year average of 138 million bushels,” Mr. Winters said.

“Our grain elevator operators have reportedly been telling the railroads for several months about an above average crop and yet since harvest started in earnest three weeks ago, reports are widespread that many elevators have not received any rail cars from the UP and the BNSF continues to state that they have empty rail cars in storage. Additionally, some elevator companies have indicated the very few rail cars they do have, were received past their want dates.” With the planning and forecasting going on, the railroads should be able to provide adequate service to meet Oklahoma’s needs. While the railroads continue to be defensive about their performance, or lack thereof, the reality is that the lack of rail cars is becoming critical in Oklahoma. What the Oklahoma producers need right now is massive effort to place more rail cars in front of the elevators that are getting plugged.” Winters said.

“Large portions of Oklahoma’s winter wheat producing areas are served by a single railroad with no rail-to-rail competition. These are referred to as captive rail areas and the problems appear to be the most severe in those areas.”

“Eighty percent (80 percent) of Oklahoma’s winter wheat leaves the state and half of that is exported and moves by rail to export positions in the Gulf of Mexico.”, according to Tom Glazier a wheat producer near Loyal and Chairman of the Oklahoma Wheat Commission (OWC).

“The price for Oklahoma wheat is at near record highs, but without adequate rail service, wheat producers and elevators cannot get their wheat to market in a timely manner. Several elevator operators have told us that one railroad is telling them to expect railroad cars by mid-month and the other railroad is suggesting to not expect cars in the foreseeable future.”

“One of the major concerns expressed by elevator companies is that the railroads are not doing an adequate job of moving loaded rail cars downstream in the pipeline and thus empty rail cars cannot be moved into loading position causing multiple elevators to remain plugged right in the middle of harvest. The railroads are indicating they have rail cars in storage, but we are not seeing empties arriving nor are they pulling the loaded cars out of the way to allow new empties to arrive and serve our needs.”

“Right now, and for the next several months, the U.S. is supplying world wheat needs and Oklahoma is not being allowed to fully participate in this higher priced market due to lack of rail service.”

“The railroads appear to be sending out folks to assess the situation, but for the elevators that are experiencing rail car shortages all over the state—times are getting desperate right now, stated Mark Hodges, executive director of the Oklahoma Wheat Commission.

“Looking forward, as the Kansas and Colorado wheat harvest get into full swing in the coming weeks, the problems with lack of rail service in Oklahoma need to be solved in the next few days. The Oklahoma Wheat Commission and Oklahoma Wheat Growers Association continue to explore ways to bring long term solutions to these rail service problems. These efforts include participation in dialogue with the railroads as well as participating in proceedings at the Surface Transportation Board and through growers efforts, working together other rail captive shippers in Congress to enhance service and competition such as H.R. 2125 (Rail Competition and Service Improvement Act of 2007) and S. 953 (Rail Competition and Service Improvement Act of 2007).”