More Sufficient Freight

March 23, 2016

In recognition of the approval that came this month from the Iowa Utilities Board, which voted to permit the Dakota Access pipeline to be constructed across their state, I'm linking to a white paper I wrote last year: "Insufficient Freight: An Assessment of U.S. Transporation Infrastructure and Its Effects on the Grain Industry."  

 

It was published by the American Farm Bureau Federation in July to address how the grain markets get affected when logistical bottlenecks make freight prices skyrocket. In theory, moving Bakken formation crude oil to the Midwest by pipeline rather than rail will help keep rail freight availability more resilient for the grain markets, which have no pipeline alternative. The spiffy maps above show the dark cloud of crappy corn basis that occurred when the railroads were congested -- and the hotspots of expensive corn that end users had to pay for when that freight couldn't get through. 

 

North Dakota, South Dakota, and Illinois (the other states through which the pipeline will run) all previously approved their petitions from Dakota Access, so now it's a go!

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Elaine Kub is the author of Mastering the Grain Markets: How Profits Are Really Made - 
a 360-degree look at all aspects of grain trading, which draws on her experiences as a futures broker, market analyst, grain merchandiser, and farmer. Before earning an engineering degree from the University of Nebraska - Lincoln and a Masters of Business Administration from the University of California San Diego, Kub grew up on a family farm in South Dakota, where she is still active in grain and livestock production. 

 

As well as sharing her ag market insights on television and various farm radio programs, Kub also focuses on quantitative analysis in a regular column for DTN The Progressive Farmer.

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