MEMPHIS, TENN. (RFD NEWS) — Higher rail auction premiums and surging fuel costs are raising transportation risks for grain shippers — tightening margins for producers tied to export-driven markets.
BNSF held its first auction for 2026/27 crop-year shuttle contracts on March 11, selling 35 shuttles for about $49 million. Winning bids ranged from $1.3 million to $1.5 million and averaged roughly $1.4 million, equal to about $424 per car per trip, assuming typical utilization. BNSF plans to offer 140 shuttles again this year, with another auction scheduled for March 18.
For producers, fuel costs remain a major concern. The U.S. diesel price jumped to $4.859 per gallon for the week ending March 9 — the largest weekly increase on record — driven by higher global crude prices and tightening supplies.
Across global shipping, bunker fuel prices surged sharply, pushing ocean freight rates higher. Grain shipping costs to Japan rose on both Gulf and Pacific Northwest routes, reflecting higher vessel operating costs and tightening supply chains.
Looking ahead, strong grain demand and steady rail volumes — up 5 percent year over year — suggest logistics costs will remain a key factor shaping marketing margins.
Lewis Williamson with HTS Commodities joined us on Tuesday’s Market Day Report to discuss spring fieldwork as it advances across the country.
In his interview with RFD News, Williamson said mixed weather and input price trends are still top of mind for farmers as planting preparation ramp up.
“Corn planners are sitting on go,” Williamson said. “I look at the temperature this weekend and things are really going to warm up. I expect by this first of next week we will certainly see corn being put in the ground as far north as Memphis. It’s an exciting time for the producer.”
Williamson also noted that Urea prices continue to be a concern amid ongoing conflicts with Iran as well as oil stocks reaching a disappointing high.
