Railway strike averted, but Farm Bureau says staffing shortages on rail lines continue to hurt Nebraska ag

A tentative agreement between union workers and railroad companies reached earlier this week means Nebraska’s harvest may continue without a sudden slowdown.

Railway companies and rail union groups have been negotiating a new contract that can both keep workers on the rails and get workers better benefits, such as higher pay and relaxed attendance policies. Unions pushed back against some attendance policies that they called "abusive and punitive."

While the agreement means Nebraska's agriculture sector avoided the worst of the effects, they still see the impacts of the ongoing staffing crisis on rail lines first hand, said Nebraska Farm Bureau's president Mark McHargue. The Federal Railroad Administration estimated a rail strike would mean a $2 billion loss to the U.S. economy per day. Nebraska would undoubtedly be a chunk of that, McHargue said.

And even though a strike has been temporarily averted this week, the ag sector has been feeling the staffing shortfalls already.

"Rails have not been performing at a level that I think we could be," McHargue said. "With COVID, they just don't have the labor to run the trains, and we've already been impact to a degree by that."

McHargue said Nebraska ethanol plants shut down earlier this year because railcars were either moving too slowly or not at all.

"That was a stack-up, and with the cars that were getting filled — it was taking 11 days, 15 days to get a train back to pull those cars back out and allow room for other cars to come in," he said. "Just a slight slowdown can cause significant backup."

In a state that depends so much on agriculture, railway disruptions could have a severe impact on getting crops and ag products in and out. McHargue said around 10% of railway transportation is related to agriculture. With Nebraska being the third-largest ag producing state, a rail strike in the future — no matter how long — could bring operations like harvest to a halt.

"Soybeans are fairly sensitive to weather once they get ready for harvest, so if we have to leave that crop in the field, those beans will drop on the ground, and we can't actually get them harvested and sold," he said.

And it's not just crops. Farmers will need to put fertilizer down in the coming months. If the railway union agreement falls through in the fall, that would create more than just a delay for farmers, McHargue said.

"Any disruptions of that fertilizer coming in from places globally would probably create higher prices ultimately," he said.

Union members still need to vote to ratify the agreement before it's finalized. That could come in the next few weeks.