Rail Strike Concerns: If the rails stop running, so do ethanol refineries

The Renewable Fuels Association is warning of fallout from the potential rail strike.

Almost 200 ag groups are urging Congress to act quickly to prevent a rail strike that could shut down service late next week, and it comes after two unions already rejected a proposed deal.

How could this affect the ethanol industry?

If the nation’s trains stop running, ethanol refineries also stop running, and it is something the Renewable Fuels Association says will affect jobs all across the United States.

“70-80 percent of the ethanol we produce in the U.S. is shipped by rail, and this isn’t just about jobs in the rail sector, it’s about jobs across the entire economy, and certainly in the ethanol industry. We support 400,000 jobs and 30 percent of what we produce in this country moves on rail at some point,” said Geoff Cooper.

The RFA alongside hundreds of ag-related groups are asking Congress to act if there is no agreement by the November 19th deadline. Other leaders in Washington are also weighing all options when it comes to keeping the freight lines open.

“Well, I think the tune is already changing, and the Labor Secretary in the last day or two has said, ‘Look, if the railroads and unions can’t reach a new deal to avert a strike, then Congress is going to have to step in. But, I do think with the election out of the way, I think there’s every reason to believe that Congress would act.”

Unions and owners are debating over the deal as the Mississippi River and other inland waterways are experiencing near-record lows, something that has put a damper on this year’s harvest.

“Limitations on barge traffic, that is also affecting our industry’s ability to move product to the marketplace and that’s both ethanol and distiller’s grain, our feed co-product. Then you look at the trucking industry and the challenges that they’re facing, with a labor shortage and just not nearly as many trucks on the highways, as prior to the pandemic.”

The fertilizer industry is already sounding the alarm, saying this week, farm inputs such as ammonia shipments could be embargoed as early as November 14, the day Congress returns to Capitol Hill.

Two of the largest rail unions began voting on the deal earlier this month and are expected to wrap up on November 21st, two days after the deadline.