Wheat Freight Costs Rise as Plains Crop Shrinks

Southern Plains wheat shippers face higher rail fuel surcharges as hard red winter wheat production falls toward a nearly 70-year low.

NASHVILLE, TENN. (RFD NEWS) — Southern Plains wheat shippers face higher rail fuel surcharges as hard red winter wheat production falls toward a nearly 70-year low. USDA’s Grain Transportation Report says BNSF and Union Pacific made only modest tariff changes for the 2026/27 marketing year, but fuel costs are rising sharply.

The biggest change is the fuel surcharge. USDA says BNSF’s June surcharge will rise to 46 cents per mile, up from 8 cents last June. Union Pacific’s surcharge will rise to 69 cents per mile, up from 30 cents.

That increase can add real cost to wheat movement. For Wichita-to-Houston shipments, USDA says higher fuel surcharges mean a $251-per-car increase for Union Pacific and a $387-per-car increase for BNSF.

The higher freight cost comes as USDA forecasts hard red winter wheat production at 515 million bushels, down 36 percent from last year and the smallest crop since 1957/58. Drought and a late-season freeze drove the decline.

Large old-crop ending stocks may still support transportation demand, but lower production and higher freight costs will shape movement.

Farm-Level Takeaway: Wheat shippers may face higher rail costs even as drought sharply reduces Southern Plains production.
Tony St. James, RFD News Markets Specialist
Related Stories
Seasonal boxed beef softness does not change the tight-supply outlook — leverage remains closer to the farm gate heading into 2026.
As the new year begins, both farmers and rural families are taking stock of their finances and planning ahead for 2026.
Strong export demand supports feed grain prices, but drought risk and seasonal patterns favor disciplined early-year marketing.
Sen. Deb Fischer reintroduces the HAULS Act to update hours-of-service exemptions and definitions affecting livestock and agricultural haulers. She joins us on Market Day Report to share more about her proposed legislation.

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:

Ethanol markets remain mixed — weaker production and blend rates are being partially balanced by stronger exports as winter demand patterns take shape.
Tariff relief may soften grocery prices, but it also intensifies competition for U.S. fruit, vegetable, and beef producers as cheaper imports regain market share.
Strong U.S. yields and steady demand leave most major crops well supplied, keeping price pressure in place unless usage strengthens or weather shifts outlooks.
Retail competition and improved supplies are helping offset food inflation, pushing Thanksgiving meal costs modestly lower despite higher prices for beef, eggs, and dairy.
While agriculture doesn’t predict every recession, the sector’s long history of turning down before the broader economy
The ACRE Act modestly reduces farmland borrowing costs now, with more savings possible once federal guidance clarifies which loans qualify.