Sunday, September 11, 2022

How a railroad strike could send food prices soaring


The nation’s supply of food could take a hit if railroad workers go on strike, driving up prices at the grocery store and limiting U.S. grain exports to countries facing famine.  

As soon as next week, 115,000 freight rail workers could walk out if they cannot reach a new contract with railroads, potentially shutting down the national rail network that transports 20 percent of all grain shipments. 

While unions say they want to avert a strike, and Congress has the power to block it, the U.S. food sector is rattled by the prospect of a national railroad shutdown in the middle of peak harvest season.   

...A railroad shutdown in mid-September would quickly overwhelm grain storage facilities, leaving farmers with few options to store their crops and boosting the chance of spoilage. Many grain processors would shut down, raising the price of bread and other common items, while farmers would be saddled with huge crop quantities and lower commodity prices.

...Freight railroads also carry roughly half of fertilizer, and farmers can’t afford delays, according to a Wednesday letter to congressional leaders from The Fertilizer Institute.“If farmers do not receive fertilizer, it results in lower crop yields, higher food prices, and more inflation for consumers,” Corey Rosenbusch, the group’s CEO, told lawmakers.

...Because roughly one-third of U.S. grain exports travel by rail, a work stoppage would also cut down on America’s ability to ship food to foreign nations, particularly those in East Africa and the Middle East that face a risk of famine following Russia’s invasion of Ukraine.  

A coalition of food and agricultural groups, including the American Farm Bureau Federation, urged lawmakers on Thursday to block a freight rail strike, warning that it would have “devastating consequences” for global food security.    


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