Part 2: AFBF Says UP-NS Merger Could Harm Rural Shippers

Railroads already face ongoing service delays, raising concerns about how a major merger could impact reliability. This is part two of our three part series with American Farm Bureau Federation economist Danny Munch as he shares insight on the proposed Union Pacific and Norfolk, Southern merger.

“There's inelastic demand out there for railway issues. Most rural shippers are already captive shippers, so they don't have any other options to move product. That includes 95% of grain elevators. So if a railway increases their transportation costs, you have to absorb that increased cost, or you don't, or you're not able to move your product to market. And we've seen, you know, over two years ago, back with COVID related disruptions, labor shortage related disruptions, a few of our livestock operations were just days away from not having enough feed to support themselves. We saw in previous mergers close to $4 billion in negative impact to the economy and the first Union Pacific, Southern Pacific merger, where there were months of service disruptions and operational failures coming up tomorrow.

In our third and final part of this series, munch discusses national security risks and why supply chain redundancies matter.”

Once again. Danny Munch with the American Farm Bureau Federation. I'm Lorrie Boyer with today's Line on Agriculture report here on the Ag Information Network.