American farmers already face squeezed margins and rising costs. A proposed merger between Union Pacific and Norfolk Southern is adding another layer of concern about industry concentration that could make things worse.
Bill Leigh, vice president elect of the National Corn Growers Association and a north-central Illinois farmer, calls the deal another example of consolidation hitting agriculture hard. He notes that when the Surface Transportation Board began its work, the United States had about 30 Class I railroads. Today that number stands at six.
Leigh worries the combination will drive up transportation costs. The merger involves between $15 billion and $20 billion in cash. “Somewhere they’re going to want to recoup that,” he says. “Who’s going to pay for it? And it’s probably the consumer.”
That pressure lands on farmers at a difficult time. Leigh points out that row-crop producers are in their third or fourth year of losses, yet input costs have not fallen. “Our cycle is completely out of touch,” he says. “Farmers don’t make money, usually prices come down on inputs, and we’re not seeing that.”
He welcomes federal investigations into fertilizer market consolidation and urges the same careful scrutiny before any decision on the rail deal. Without it, fewer rail options could mean higher shipping rates, reduced competition, and even tighter margins for growers already struggling to stay profitable.
For farmers who rely on efficient, affordable rail to move grain and other commodities, further consolidation risks turning a vital transportation network into another cost center that works against them.