WASHINGTON -- U.S. Agriculture Secretary Tom Vilsack met with Warren Buffett recently to urge the billionaire investor to make sure his Burlington Northern Santa Fe railroad is ready for an expected record corn and soy harvest this year.
Vilsack says Buffett, who heads the sprawling conglomerate Berkshire Hathaway, recognizes the challenge and indicates his company is taking steps. BNSF is a unit of Berkshire Hathaway.
"I said, 'Warren, you've got to make sure that your railroad understands what's going on here,'" Vilsack says of the 45-minute conversation. "There is pressure now, but as soon as this crop is harvested, there will be more pressure."
Speaking at a conference, sponsored by Growth Energy, a biofuel trade group, Vilsack said BNSF was making "significant" investments. "It's a long-term issue."
Backlogs along U.S. rail lines became a major concern for a number of commodities markets this year.
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In June, for example, U.S. officials ordered BNSF and Canadian Pacific Railway Co. to report their plans to clear a backlog of grain cars after months of service delays blamed on harsh winter weather and high freight demand.
BNSF, which was struggling from the Great Recession when Berkshire bought it for $26 billion in 2010, returned a $3.8 billion profit last year.
One major source of profit, oil by rail, has become controversial, with some commodities producers saying railroads, including BNSF, are prioritizing the shipments of crude at the expense of other cargo. BNSF has denied this.
Berkshire Hathaway did not immediately reply to a request for comment on Tuesday.
Vilsack praised BNSF for its work to improve service for farmers this year.
"If we had made as much progress with Canadian Pacific, we'd be in a little bit better place than we are today," he says.
Canadian Pacific says it is investing in infrastructure and hiring employees to meet growing demand.
"CP is disappointed with the Secretary's comments, as they do not reflect the facts that CP moved record amounts of grain in the Midwest [recently] and expects to be current with demand heading into the fall harvest."
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The statement says CP is changing its car supply system "to give clients more control, consistency and transparency in the process. This will also promote better alignment between the marketplace and railway service expectations."
