A column by Gov. Dennis Daugaard:
This week Sen. John Thune and I had the honor of meeting with U.S. Secretary of Transportation Anthony Foxx, who traveled all the way to South Dakota to discuss transportation priorities here in our state. We participated in a roundtable in Rapid City with transportation stakeholders and then gave Secretary Foxx a tour of a section of the state-owned rail line near Chamberlain.
Among the things Sen. Thune and I discussed with Secretary Foxx was South Dakota’s rail situation – what some have called the “rail car shortage.”
South Dakota relies almost entirely on railroads to move agricultural products out of state. Because South Dakotans consume a modest amount of the grain produced here, the majority must be sold to out-of-state buyers. It’s no secret that over the past few months rail has not been able to keep up with the volume of commodities our farmers need to move to market.
Our rail issues are a result of many factors. The combined harvest of South Dakota wheat, soybeans and corn in 2013 – at 1.060 billion bushels – set a new record, and we are breaking that record in 2014. The 2013 corn to be shipped out of state was more than 200 percent above the 2012 corn shipping demand on the railroads. Adding to the problem is the fact that the Midwest experienced the coldest winter in 20 years, and some interchange locations in the Midwest experienced 200 percent more snowfall than average.
The result: USDA has suggested South Dakota may experience the largest grain storage shortage in the country – 197 million bushels more than we are capable of storing right now.
Along with Sen. Thune, I have worked closely with the Surface Transportation Board since rail service issues first became apparent last year. The STB has been instrumental in facilitating discussions with the rail companies which led the RCP&E to make a commitment last August to add three extra trains per week.
Even as we work toward improved service, we are also working to improve our state-owned rail. South Dakota is reconstructing the 40-mile stretch between Chamberlain and Presho by adding 1,000 tons of rock per mile; replacing 65-, 75- and 85-pound rail with 112-pound rail or better; and refurbishing or replacing bridges.
Thanks to the generosity of private donors and a federal TIGER grant, this project will be undertaken in 2015, and completed in 2017. South Dakota Wheat Growers has responded with a $40 million project to construct a grain terminal and agronomy center in Kennebec, with shuttle loading capacity. Other strategic investments can and should be made to increase our state’s shipping capacity.
Though we’ve used the tools at our disposal to do what we can to ameliorate our shipping problem, it will take time for our railroads to catch up. To meet this challenge farmers and elevators will need to plan strategically for the ever-growing harvests. Though the state has a role to play, government will not be working alone. Farmers, railroads, grain elevators and others in the business will also have lead roles.
I’m confident that, together, we will work our way through these bottlenecks, and provide South Dakota an even better, stronger, faster freight rail system for our state.
For an audio recording of the Governor’s weekly column, visit http://news.sd.gov/player.aspx.