Grain Hopper Shortage

Where did you read THAT?  Information from the Wall Street Journal, Railway Age, or one of the other industry sources?

The only time a freight car earns revenue for the company is when it is loaded and moving. Covered hoppers in grain service are a once-a-year proposition. The railroad absolutely must find other loads for those hoppers when the grain harvest is over or all the profit goes right out the window.

Owning a huge fleet of covered hoppers to service only the annual grain harvest would be a huge money-losing proposition. Not to mention the vast amount of yard track storage space those hoppers would require during the off-season.

Many grain elevators are full right now because the owners are waiting for a better price for the grain.

I have no comment on the hopper shortfall question because I'm not up to speed on that.

Well I would imagine that it's partly because volume is up, and it's a very busy time of year anyway. I know BNSF is short on power, intermodal cars, and crews for that matter.

Volumes are higher than they have been in several years.  

Many of the facilities only hold so many cars. Lets say we deliver 68 loaded cars to Horizon Milling which is max capacity. It will take them almost a week to unload them. Then we have to get power and a crew to go pull the empties before they can spot another 68 cars in there. Sometimes it may take a few days just to get those empties out of there. All that time, those cars are just sitting, whether loaded or empty. Meanwhile there is another train sitting in the yard waiting to be spotted after the empties get pulled, and there is another loaded train already on the way from the Midwest. That right there is 200+ cars for 1 facility, multiply that by XXXX and that is a ton of cars being worked.

Even if there were more grain cars out there, they would be sitting somewhere, waiting to be unloaded or loaded.

Thanks for the replies. My source was Fox News on WABC radio, which did a small segment on the issue a day or so ago.

Well, I was thinking it was time to go back to loading boxcars with cardboard door

inserts...but...probably the elevators are no longer able to handle that...and then, I

could ask...what elevators?  Many of them are mouldering ruins and the farmers have

gone to storing their grain in their own collections of metal grainbins, waiting for the

right market...

The grain hoppers stored out here on the UP have been pulled and gone for a couple months now.  We still have center beam flats and some well cars stored but I see today two light power moves on the line up headed east, guessing they have a FRED and are headed to the well cars sitting out on the desert.

Greg

This years corn crop was largest ever produced by this country.  That's bound to cause logistical problems.

It might be a new, higher capacity hopper shortage. There are still a large number of 4750 cu. ft. capy. sized covered hoppers built between 1972-1992 that are in service. They might not be clean on the outside, but they are still clean on the inside.

Andrew

1. I don't think that's true at all.  Elevators here load throughout the year.  The bigger ones (i.e. about 50% of them) do it several times a month.  There's a big rush starting in June for Texas wheat and that follows the harvest all the way up into Canada into August.  Then there's a big rush to haul soybeans starting in late September through November.  Corn harvest begins in early October on the southern end and has just wrapped up for the northern end in ND & MN.  I saw four grain trains today alone as the scramble to haul corn from the bunkers is now going full blast.  I have about 70,000 bushels of corn in a Missouri elevator myself and will probably sell in February.  There is a second big rush of grain shipping just before ice-out, when farmers are hauling grain from on-farm storage to their local elevator over soon to be thawing roads, about March.  Trains run all night long.  And that brings us back to late Spring, when farmers are dumping what they have left and the elevators are scheduling trains like crazy for the clean out, to make room for the incomming harvest.  Hauling grain is a year round thing, not just a couple of months around deer season.

2.  The elevators are always full this time of year because there is more grain than they can handle.  All the big operations have gone to having to use ground bunkers for the initial storage.  Farmers typically sell off in three or four "lots", to hedge their bets.  They sell some as soon as the crop comes in, to pay for diesel fuel and for machinery repairs.  They sell some more in late winter to pay for new seeds, fertilizer.  The longer you wait (up to a point) the better the price might be, but don't forget the Southern Hemisphere will be dumping their harvest on the world markets about the time our bunkers have run out and we're pulling from the elevators.

3.  I have not heard about any shortage, and that's something that would be headline news around here.  I bet I saw four or five hundred hopper cars just tonight, rolling around.  Most were BNSF, a few were GATX, a few more were owned by the grain cooperatives such as South Dakota Soybean Processors.

Kent in SD

Car shortages for grain haulage is an old problem. And understandable, based on the circumscribed demand period. At the recent Prototype Modelers Seminar in Naperville, IL this Fall, a presenter noted that one year in the '50's, 78% of Canadian National's boxcar fleet was in the United States and unavailable for moving Canadian wheat. Pres Gordon of the CNR wrote letters to the Presidents of all major US railroads beseeching them to return Canadian boxcars to Canada. In response, the Pennsylvania Railroad promptly and graciously dispatched 5 or 6 trains composed of 100 car empties to Chicago for forwarding on to Canada. Noted in this presentation was that the Assoc of American Railroads (the AAR) coordinated the movement and dispersal of freight equipment for just such problems.

        Expediting boxcars west has always been dramatically pictured in my mind by Great Northern's huge O8 Mikados wheeling "Dakota Box" trains, composed of some 100+ empties at 60 per!

This sounds like building a curch big enough for on Sunday a year:  Easter.  Noth worth the money for a church/parish to do.

Kent, thanks for your views on this topic. I know a lot of farmer friends in my area are saying their yields on corn this year were up by a factor of 2+ times this year over last year. But with all that corn comes the lower price so many in this area are building more storage capacity to be able to hold out for a higher proce. The local ethonal plants are also getting some of the extra corn as well. Some farmers had contracts with the ethonal plants and were meeting those commitnebts.

The some of the Big Grain producing Canadian Provinces own their fleets of the large 100 ton hopper cars. I was reading the other day where yhr Saskatchewan Proviance has had a 1000 hopper cars built. I have seen pictures of stored empty cars on the sidings in the various Canadian growing areas.

I also think some large operations will ship processed grain to buyers a bit early towards the end of the year for tax purposes. These WOW's... warehouse on wheels...

are not claimed by the mills or the buyers so it can cause a false shortage of hopper cars for a period of time.

As usual Rich is totally correct. There is a shortage of grain cars this year. Grain trains are running at a high priority on us. Glad to see grain make a nice comeback for all concerned. Does not matter if you are a farmer or grain elevator operator, business is good for all.

Gene

All of the older PS4427 hoppers built in 1966 & 1967, acquired from the ATSF merger and  NP cars, reached the end of their service life. Being phased out in 2005 by 2009 they were all retired. BNSF Railway Freight Cars Vol.Three.

I'm not a railroad expert nor a grain elevator operator.  I'm just a farmer; but the elevators in my area load grain hoppers all year round.  Not just at harvest.