By LINDA McGURK
Indiana Correspondent

COULTERVILLE, Ill. — While farmers are keeping a close eye on volatile financial markets and shaky commodities prices, regulatory developments in Washington, D.C., that could jeopardize the productivity of U.S. farmers seem to be largely flying below the radar.

The Surface Transportation Board (STB), a government agency that resolves railroad rates and services disputes, is currently considering a request by the railroad industry to cease shipments of anhydrous ammonia by rail. Farm groups fear the move will affect the price and availability of a nitrogen source that’s essential to Midwestern agriculture. But news about the railroads’ action has yet to reach farmers in the middle of fall harvest.

“I think it’s one of those issues that has not hit the ag community yet. People are not aware of it, so I think we need to educate the public and bring to light that there may be a problem coming,” said Dean Campbell, a Coulterville, Ill., grain producer and district director for the Illinois Soybean Assoc.

The common carrier obligation was enacted in 1906 and states that railroads can’t be selective in which commodities to ship based upon self-interest. But citing safety and liability issues, the Assoc. of American Railroads has petitioned STB to be relieved from the requirement to ship toxic-by-inhalation materials, such as anhydrous ammonia.

“My concern is how we’re going to get the product moved around,” said Campbell. “If the railroads don’t have to carry it, then the trucking industry and the barge lines will follow suit. That only leaves us with the pipelines. It (anhydrous) may become unavailable.”

Campbell, who’s also the chair of the Soy Transportation Coalition, understands the railroads’ concern for the liability associated with transporting hazardous materials. But he worries that a change in the common carrier obligation would make growers more reliant on liquid or solid fertilizers with a lower concentration of nitrogen, such as urea.

“That would become an economic issue in a hurry and it will all show up in the cost of food,” he said.

Tim Burrack, a corn grower in Arlington, Iowa, said some farmers are aware of the issue, others are not.

“But, the important thing is, we can’t let it happen. We can’t afford to let the railroads get out of hauling anhydrous ammonia. It’s too important to the corn industry,” he said.

A member of the Iowa Corn Growers Assoc. Exports and Grain Trade Committee, Burrack said the organization is trying to get the point across to regulators.

“I understand (the railroads’) concern, but hopefully we can create some sort of limited liability agreement,” he said.

If shipments were to cease, Burrack said it would be “impossible” to get anhydrous to certain areas. “The people who live near a pipeline will be able to get it and those who don’t, won’t.”

During STB’s hearings in Washington, representatives from The Fertilizer Institute (TFI), the Illinois Fertilizer and Chemical Assoc., The McGregor Co. and Terra Industries testified before board members on behalf of the agriculture sector, alongside the National Corn Growers Assoc.

“It’s probably one of our top-five issues of the day,” said Cress Hizer, president of the Agribusiness Council of Indiana, a state affiliate of TFI.

“As we’re struggling with the economy, this is not getting much attention, but it should.”

Hizer said Indiana may be slightly better positioned than other states if the railroads stop shipping anhydrous ammonia, thanks to its extensive pipeline system.

But he added that the logistics of converting the 52,000 carloads of anhydrous shipped by rail nationally every year to truck shipments would be “nearly impossible.”

Mona Bond, CEO of the Agribusiness Assoc. of Iowa, said growers, even if they buy anhydrous from a third party, will be affected indirectly if anhydrous transports by rail are discontinued.

“From a Midwestern perspective, we have to have anhydrous coming in and ethanol going out. (In Iowa) anhydrous is our number one fertilizer,” she said. “Any time you’re short in supply or can’t move the product, the price will escalate. It’s really a supply and demand issue.”

Hizer suspected the upcoming election is delaying a lot of the policy discussions in Washington, D.C., but said the agribusiness representatives from TFI and other organizations are staying on top of it.

“We’re trying to educate growers,” he said, and “we encourage (them) to talk to their lawmakers and elected officials.”