Strong Grain Demand Pushes Freight Costs Higher Nationwide

Strong export demand is supportive, but higher freight costs may pressure basis and grain movement margins.

LUBBOCK, TEXAS (RFD NEWS) — Farmers have plenty of grain to move, and export demand remains strong, but transportation costs are rising across rail, barge, and ocean freight. USDA’s Grain Transportation Report says last fall’s record corn harvest helped push first-quarter corn exports to their highest level since 2021.

The biggest supply pressure is corn. USDA says December 1 corn stocks were about 1.6 billion bushels above the three-year average, with larger supplies concentrated across the western Corn Belt, including Kansas, Nebraska, South Dakota, Minnesota, and Iowa.

Farm-Level Takeaway: Strong export demand is supportive, but higher freight costs may pressure basis and grain movement margins.
Tony St. James, RFD News Markets Specialist

That grain still has to reach buyers. Rail grain carloads hit record year-to-date levels, while Mississippi River barge traffic recovered after winter disruptions. Ocean vessel loadings in the U.S. Gulf also ran ahead of last year.

The pressure point is fuel. USDA says diesel prices climbed sharply after oil market disruptions, raising rail fuel surcharges, towing costs, and ocean freight expenses.

Strong exports are helping move corn and wheat, but higher freight costs can still affect basis and local bids.

Related Stories
Patrick De Haan with GasBuddy joined us to discuss diesel price volatility and what farmers can expect as geopolitical tensions continue to impact energy markets.
Tight supply and logistics issues may raise input costs.
Export funding aims to strengthen global demand for U.S. commodities.
Dairy markets are improving, but large supplies still cap the upside.

Tony St. James joined the RFD-TV talent team in August 2024, bringing a wealth of experience and a fresh perspective to RFD-TV and Rural Radio Channel 147 Sirius XM. In addition to his role as Market Specialist (collaborating with Scott “The Cow Guy” Shellady to provide radio and TV audiences with the latest updates on ag commodity markets), he hosts “Rural America Live” and serves as talent for trade shows.

LATEST STORIES BY THIS AUTHOR:

President Donald Trump signed an executive order this week to accelerate domestic production of phosphorus and glyphosate, signaling that farm input availability is now treated as a national security risk.
The global rice surplus outweighs tighter U.S. supplies, pressuring prices.
A weaker dollar supports export demand and may strengthen crop prices.
Smaller supplies could support cotton prices despite weak demand.
Federal aid helps, but producers will bear most of the losses. Balance sheets may look stable, but margins remain fragile without policy support.
RFD NEWS Markets Specialist Tony St. James reviews the USDA’s Farms and Land in Farms 2025 Summary.