As a critical link in the world’s agricultural supply chain, Union Pacific invests considerable time and resources preparing for the fall harvest. U.S. corn and wheat stocks are significantly larger than a year ago, and Union Pacific is leveraging lessons learned from the 2023 harvest when it moved grain cars faster, farther, and more efficiently.
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“We focused on having resources at the ready: locomotives, rail cars and train crews,” said Nick Smith, general director – Unit Train Service Solution. “We also improved our harvest planning process by taking a detailed, cross-functional approach that resulted in a highly efficient and resilient service product when our customers needed it most.”
In the last three months of 2023, the railroad picked up loaded grain cars from customers’ facilities 55% faster than the year before and transported grain farther each day, increasing the average daily distance grain trains traveled by 38% compared to the same quarter in 2022.
The railroad transports about 1.3 billion bushels of grain annually, with exports accounting for 30% to 40% of those shipments. Union Pacific serves most of the U.S. major grain markets, connecting the Midwest and Western production areas to export terminals in the Pacific Northwest and Gulf Coast, as well as Mexico. The railroad also serves significant domestic markets, including grain processors, animal feeders and ethanol producers in the Midwest and West.
To meet these obligations, Union Pacific spends months planning and preparing for the harvest. The team tracks global commodity markets, meets frequently with customers to gauge market demand and harvest outlooks, and must make annual adjustments for supply-and-demand variables driven by weather, growing conditions, government policies and world grain production.
“Timely, accurate customer forecasts allow us to manage resources in key export corridors and provide an excellent service product for our customers,” Ryan Raess, general director – Marketing & Sales. “The Operating team deserves a lot of credit for engaging early in the planning process and providing excellent service throughout the harvest season.”
Additionally, Union Pacific is investing in resources, including covered hopper rail cars, increasing its fleet 20% in the last three years. The 260-million-dollar investment is focused on improving efficiency, capacity and reliability for customers, and allows more harvested products to fit inside the streamlined rail car.
In January, the U.S. Department of Agriculture reported corn stocks were up 13% and wheat stocks were up 8% compared to the previous year, representing 1.5 billion additional bushels in storage. Union Pacific is ready to support the potential increase in rail demand that may arise from growth in U.S. grain supply, including 2024 harvest demand.
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