(Jamie) We’re back with Kyle and Lindsey to discuss the Union Pacific Railroad’s partnership with agriculture.
(Kyle) Hi, this is Kyle Bauer. I have the opportunity to visit with Lindsey Douglas. She’s with Union Pacific Railroad. Lindsey, Union Pacific has had a long history in Kansas moving high volumes of farm commodities and it’s really no different today. (Lindsey) That’s correct, the AG market is our huge exports out of the state of Kansas, and Union Pacific moves a whole lot of grain out of Kansas. (Kyle) Is there a particular direction UP likes to haul farm commodities, north-south-east-west? (Lindsey) We can typically make anything work, so wherever the demand is, we will take the grain there. We have a lot of infrastructure in Texas and down into Mexico. We control all six ports of entry into Mexico. We also have access to the west coast ports and into Louisiana. (Kyle) And of course, export of sorghum is a big part of the market that has been set on sorghum, but you probably run almost all the commodities into Mexico. (Lindsey) Yes, we have seen a huge opportunity kind of crop up out of Mexico with their change in ethanol, and wanting ethanol in their gasoline. We see a huge potential for sorghum in Mexico, and are eager to start moving some of that South. (Kyle) There’s a lot of change in Kansas on intermodal, we’re continuing to build facilities with intermodal. Where does UP come down on that? (Lindsey) Yes, Union Pacific has an intermodal facility just across the state line in Kansas City, Missouri. We also know that there’s another intermodal facility in Kansas. We do a lot of intermodal business and we’ve got capacity to move more. As we’ve heard at this conference, there’s a lot of potential for moving grain via intermodal containers to points abroad, and I think that that is something that Union Pacific would love to partner with the industry on. (Kyle) Railroads make transportation so much more efficient than highways and just from the fact that so many truckloads would go on the train in general. Is there a certain niche that fits rail really well? (Lindsey) I would say when you have enough commodity to fill an entire unit train that really gets the commodity in the destination much faster. We can move that through very efficiently on our network. That cost-benefit there with having a full unit train is very beneficial, not only to our customers, but to Union Pacific as well. (Kyle) A couple of years ago, we were short of capacity in the railroads with moving oil out of the Bakkens and send a big crop up north, moving coal. It isn’t necessarily that situation today? (Lindsey) No, we have seen a reduction in coal movements. I think all the railroads have felt that. Union Pacific has as well. We have the Powder River Basin in Wyoming that we move a lot of coal out of. We have seen that reduce, both with the weather being kind of mild in the winter and the summer, and not as big a need, as well as some regulatory restrictions in that area. (Kyle) We’re visiting with Lindsey Douglas and she’s with Union Pacific Railroad. This is Kyle Bauer reporting.
(Jamie) Come back after the break to see how one rancher’s business has changed over time.