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
Acre shifts reflect margins, costs, and market opportunities.
Lower shipping costs alone will not restore export competitiveness.
Rising fuel costs will soon increase grain transportation expenses.
Processing disruptions could impact cattle markets if the strike continues.
At the White House’s “Celebration of Agriculture,” the Trump Administration announced a slate of policies to support farmers and ranchers, including biofuel mandates, SBA loan programs, and new labeling policies to boost domestic markets for ag products.
Expanded access could boost demand for U.S. exports.

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:

Improving dairy prices could support stronger milk checks later this year.
Smaller beekeepers may find opportunities despite ongoing colony health challenges.
Technology returns depend on management, not just adoption.
The sugar policy debate affects prices, trade, and farm stability.
Strong feedlot demand keeps beef-on-dairy calf premiums elevated.
Cattle producers face mounting pressure as U.S.-Mexico trade talks resume, but expanding drought, rising input costs, and policy work to improve the long-term industry outlook.