Wheat shippers chastise BNSF for rate shifts

Wheat shippers chastise BNSF for rate shifts    North Dakota’s wheat shippers are concerned that recent price adjustments made by the Burlington Northern Santa Fe Railway on grain movements from select eastern elevators in the Upper Midwest states to Pacific Northwest ports will injure U.S. hard red spring wheat exports to Asia.
   The BNSF price adjustments, also known in the region as an “inverse rate,” has made it less expensive for certain grain handling facilities in eastern North Dakota and Minnesota to ship wheat to Pacific Northwest ports, such as Portland, Ore., than for elevators shipping from a shorter distance in western North Dakota and Montana.
   Larry Lee, chairman of the North Dakota Wheat Commission, asked the railroad in a letter “to reconsider this inequitable rail pricing and allow market forces to dictate which direction wheat will flow, not a BNSF boardroom decision.”
   He added: “It is our understanding that the pricing scheme went into effect in early March and some shifts in movements have already taken place. Customers in the Asian region are now getting shipments that are likely to express performance characteristics unfamiliar to them.”
   The North Dakota Wheat Commission pointed out that much of the end-use quality in wheat is related to the specific variety, climate and other environmental conditions of a particular growing region. BNSF’s inverse rate “blunts positive market signals in western parts of the region and threatens to rob all hard red spring wheat producers and shippers of hard-earned markets,” said Jim Peterson, the commission’s marketing director.
   The commission voiced similar concerns to the railroad in 2001. “A period of damage control was needed with some overseas customers to explain some inconsistencies in functional quality,” Peterson said. “Once the inverse rate was dropped, customer quality complaints diminished.”
   The commission is particularly concerned about maintaining good relations with China, which has become a major buyer of U.S. hard red spring wheat shipped through Pacific Northwest ports.
   “A lot is at stake in the coming months with 11 million bushels of hard red spring wheat scheduled for shipment to China before the end of May and another 16 million bushels on the books for June 2004 forward,” the commission said.