Trains, Elevators To Be Scarce
Once Grain Harvest Is Underway

WICHITA, Kan. —(AP)— With back-to-back record wheat harvests filling Kansas grain elevators, farmers probably will be dumping more than twice as much corn and other fall crops on the ground this October as they did last year, an industry group said.

The Kansas Feed and Grain Association, the trade group representing grain elevators, predicted the state will have a shortage of 75 million bushels of storage space after this fall's harvest. Last fall, only 31 million bushels were dumped on the ground.

News of the predicted space shortage comes as thousands of empty railroad cars sit idly on sidings, including more than 2000 Burlington Northern-Santa Fe rail cars in the Midwest.

Burlington Northern-Santa Fe sent an open letter to elevators this week urging them to move their inventories now. The railroad warned that neither the nation's rail system nor the Texas Gulf port can handle more volume during the peak fall harvest.

The letter from Burlington vice president Steve Bobb said there is no doubt that grain will be put on the ground this fall.

"It is not only conceivable, but likely, that grain currently in storage will start moving to markets just as new wheat and corn harvests begin, and that the nation's transportation system will be tasked with moving, for all intents and purposes, two harvests at one time," Bobb told grain shippers. "This would seriously strain our railroad network, as we simply do not have the capacity to handle this volume."

The letter was mailed last week to 150 large grain shippers in the nation's grain producing states.

"We appreciate the advice from BNSF to move grain early, but there are many problems with that," Tom Tunnell, president of Kansas Feed and Grain Association, said. "Their perspective is just move the grain and make space for fall harvest. There is just a lot more involved to doing that."

One problem is that the price paid for wheat at the elevator is at or less than the rate for which the government will give farmers a loan. More farmers are taking out loans, so the wheat essentially is used as collateral and cannot be moved.

On Tuesday, Kansas Gov. Bill Graves declared a state-of-disaster emergency, clearing the way for a temporary relaxation of regulations imposed on grain elevators. The declaration will allow grain warehouses to move that loan-encumbered grain to other licensed and bonded facilities.

The problem with Graves' declaration is that most grain elevators across Kansas are already full, with the possible exception of some in eastern Kansas where little wheat is grown.

"Virtually the whole state of Kansas is filled up with wheat," Tunnell said. "We need to move grain out of the state to consumptive markets."

Nearby states have some grain storage space available: Oklahoma has 100 million bushels and Texas has 150 million bushels worth of space, Tunnell said.

"Where the railroads could help is if they could design some rail car tariffs to make it favorable to utilize that space south of our borders," Tunnell said.

Graves has appointed a group to study the storage transportation problem. Tunnel said grain shippers will push for government incentives to open up mothballed storage space, such as property tax abatements and low interest loans to build new commercial storage.