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Potential rail strike could have impacted Montana grain industry

Rail strike impacts
Posted at 9:08 AM, Sep 15, 2022
and last updated 2022-09-15 11:37:16-04

A potential rail strike could have had an impact on a major sector of Montana’s leading industry.

The White House announced early Thursday morning a tentative deal has been reached between railroad operators and labor unions to avoid a strike.

"Ultimately it means their grain is not going to make it to market," said Jason Laird, the interim executive vice president of the Montana Wheat and Barley Committee.

According to the organization, about 80% of Montana grain is shipped by train to the West Coast and sent overseas.

Most of the other 20% is sent by rail to mills in the United States.

Laird says excess grain sitting in an elevator could have an impact on prices. But right now, Montana doesn't have a surplus.

"The thing is we're coming off of two years of drought," said Laird. "So our supplies are not great to begin with. Not that drought is a good thing, but it's not like we're sitting on massive supplies of grain that need to leave the state."

If a work stoppage did happen, the shipping alternative presented more logistical and financial challenges.

"We don't have huge barges going down our river hear carrying grain out to the coast," said Laird. "Truck is about our only option. The problem with trucks is you're going to increase traffic significantly, obliviously there's congestion issues there. Then on top of it, the cost. It's just not cost effective to truck our grain all the way to the coast."

Laird says Montana grain would have been trucked to Idaho where it would be shipped by barge to the coast before heading to foreign markets.

"We're looking at a significant increase in terms of shipping costs to foreign customers," said Laird. "Frankly if they can get their grain cheaper somewhere else, that's something they're going to have to weigh out when it comes to purchasing those large quantities of grain."

Laird says grain that needs to be stored in grain elevators instead of rail cars is good for about two years, so there’s little concern about the grain spoiling.