How a railroad strike could hurt Minnesota farmers - and everyone else

MINNEAPOLIS -- Rail unions are pumping the brakes on critical contract negotiations which now threaten thousands of Minnesota farmers - and everyone's wallets.

"It's all about economics," said Seth Naeve, an agronomist and soybean production specialist. "In the old days, farmers just dealt with drought and high and low prices, but now there are so many other factors involved that are outside their control, and that's a challenge."

Among those man-made challenges is a brewing labor dispute between major freight rail companies and the unions of railroad engineers and conductors.

Split votes among the nation's 12 unions have jeopardized an already fragile truce between negotiators that earlier this year needed federal intervention to help stave off a crippling strike. Now, the strike could happen anyway.

In Minnesota, freight rail is the key transportation for the state's major commodity exports like soybeans, corn and wheat.  

"We're in this bulk commodity business where we make this relatively cheap crop to distribute around the world," Naeve said. "This has caught us off guard for sure, but I think we're living in such erratic times. Since COVID, everything is in flux."

Compounding the issue is a twofold burden on other modes of transportation: the low levels of the Mississippi River mean smaller ships and lighter hauls, and truck driver shortages mean lower capacity on the roads.

"If we displace a lot of the grain onto the trucks that takes trucking power and infrastructure from other movements," Naeve said.

Dan Glessing, president of the Minnesota Farm Bureau, told WCCO that a further disruption in the supply chain will lead to immediate consequences for consumers, since Minnesota also relies on rail freight to import the items manufactured and refined from the very commodities shipped abroad.

"It's as simple as supply and demand," Glessing said. "The consumer products we see on store shelves, they get there somehow by freight."