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
Policy clarity will determine the trajectory of soybean crush demand, but producers in Kansas have shown that expanding local crush capacity strengthens basis and marketing options.
Corn and soybean shipments continue to move at a steady pace as spring trade flows develop.
Tony Adkins with Specialty Risk Insurance addresses current market challenges for farmers and ranchers and offers strategies to help producers navigate risk.
Acreage shifts could impact pricing and marketing plans.

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:

Cash flow management and lender communication are becoming critical survival tools for farmers as tightening margins increase risk and borrowing pressure.
Expanded global trade access boosts long-term export demand potential for U.S. ag products.
Border closures tied to the threat of New World Screwworm continue to stall Mexican fed cattle imports, tightening U.S. feeder cattle supplies over time — triggering feedlot closures that hinder herd rebuilding efforts, threaten the beef supply chain, and shrink production while consumer prices stay elevated.
Agriculture avoided major disruptions, but trade uncertainty remains elevated.
The debate now matters as much as the policy — market rules and regulatory clarity depend on whether Congress can finish the bill this year.
Domestic beef demand remains solid, with the strongest growth occurring through retail channels, according to consumers surveyed in the latest K-State Meat Demand Monitor.