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Published May 19, 2014, 09:55 AM

Fertilizer supplier: Rail delays will leave lasting damage

WATERTOWN, S.D. — Railroads say they’re catching up train fertilizer shipments. That’s true, but some suppliers say their 2014 problems aren’t over, and they won’t be easily forgotten.

By: Mikkel Pates, Agweek

WATERTOWN, S.D. — Railroads say they’re catching up train fertilizer shipments. That’s true, but some suppliers say their 2014 problems aren’t over, and they won’t be easily forgotten.

Terry Nelson is manager of the fertilizer warehouse at the CHS Inc. facility south of Watertown, S.D. It’s a 36,000-ton facility in its second year of operation. The plant handles dry nitrogen, phosphorus, potash and AMS. The plant serves CHS Crop Nutrients wholesale customers and Watertown Cooperative Elevator customers in the area. The company is investing in a liquid fertilizer depot, which could be in place by mid-June.

The facility cost about $6 million and is part of a campus for the co-op’s agronomy division. The local co-op serves some 800 growers and has branches in Webster and Henry, S.D.

The joint facility has a loop track for 136 cars, but trains pull 85 or 110, Nelson says.

“The big issue is that [Burlington Northern Santa Fe] doesn’t have the power — the locomotives. They don’t have enough of them, and they don’t have the manpower to run them,” he says, adding that the railroads are putting their people to work in the oil fields, which lessens the manpower for other industries.

“Our problem is the cars that come — the smaller products you order like AMS, potash — they don’t come in the big trains, they come in 15-, 10-, and five-car increments, or single cars. Getting them has been the problem.”

Long trains improve

In its May 9 podcast report, BNSF said it has “loaded 73 percent of the promised unit train volume of fertilizer” and “we continue to be on pace with the unit train goal that we outlined during this critical delivery window.”

But the report showed no good news about late cars for smaller deliveries — 14,613 cars late, systemwide, and an average of 26.9 days late — higher than any point this winter.

South Dakota had 682 cars late, about the same as for the past month — half the level of the peak in late March. But the 31 days late average per late car is the second-worst since the reports were started.

In the report, Minnesota late cars were a record-high at 1,899, and 22 days late.

North Dakota still accounts for nearly half of the cars late, 7,110, and an average of 26.7 days late — the longest wait since the reports started in February. Jim Miller, vice president of ag for BNSF, says branch lines across the northern tier states had been removed from service because of spring thaw conditions.

Montana has 3,163 late cars, by 29.9 days. A Bainville, Mont., to Scobey, Mont., segment had been returned to service and a line from Rugby to Bottineau in North Dakota was expected up by May 16. Another segment from Bisbee to Cando in North Dakota was expected back up by May 19, assuming favorable weather.

Rationing product

Nelson says if his company can’t get AMS and potash in, it can’t blend products as the customers prefer. Watertown couldn’t get the supply in fast enough. Everybody’s been rationed product, he says.

“Since spring season started, we’ve allocated AMS and haven’t been able to take new orders.”

He says when those conditions persist, people look elsewhere for their fertilizer. “We put the investment out there to build this, so we can supply the product to the people,” Nelson says. “Because in this day and age — even with these new-technology plants — we still cannot keep up with the volumes that the producers are buying and using today.”

When farmers get rolling with planting in the Watertown area, the plant has at times moved 25,000 tons of product in a week.

Nelson says his area is about three-quarters completed with the spring fertilizer application.

“I’m just now getting my shipments that I should have had probably starting three weeks ago,” he says. “Here, I’ve lost sales where I can’t get the product in, so they have to truck it from the (Twin) Cities or elsewhere, where they’ve brought it in by barge, or they’ve had it in before the season started. Here, I was still filling winter-fill orders when the spring season started. I wasn’t full here myself.”

Short-term, BNSF says its emphasis is on fertilizer. Long-term, it’s buying power and acquiring manpower.

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