WASHINGTON, D.C. (RFD NEWS) — Grain shippers are entering the new wheat marketing year with higher rail fuel surcharges, adding transportation pressure for farmers already facing weak hard red winter wheat production. USDA’s Grain Transportation Report says June mileage-based fuel surcharges reached their highest level since August 2022.
The weighted average surcharge increased to 54 cents per car-mile, up 13 cents from May and 41 cents from last June. July surcharges are expected to remain similar because most railroads use diesel prices from two months earlier.
Rail movement remains solid. Class I railroads originated 28,556 grain carloads during the week ending May 23, down 2 percent from the previous week but 18 percent above last year.
Hard red winter wheat rates changed only modestly for the new marketing year. BNSF lowered some shuttle rates to the Texas Gulf and Mexico, while Union Pacific kept most export rates steady and raised some eastbound lanes.
USDA projects hard red winter wheat production at its lowest level since 1957/58, but high carryover stocks could support transportation demand. In South Carolina, expanded elevator capacity may also improve local grain handling following the closure of a soybean processing plant.
