By PJ Huffstutter
CHICAGO (Reuters) – Delays in rail transportation are disrupting export trade between the United States and Mexico and snarling agricultural supply chains as the fall harvest is underway, agricultural groups said on Friday.
A possible East Coast and Gulf port strike that could begin as early as Tuesday would exacerbate the problems, nearly 200 farm groups said in a letter sent to the White House on Friday.
While Mexico is the top U.S. corn export market, it has also been a key market this year for agricultural exporters seeking to offset weak purchases from China, a major buyer of the raw materials.
Mexican imports of U.S. agricultural products rose 27% in the first seven months of 2024 from a year earlier, government data showed. But rail capacity can't meet demand, said National Grain and Feed Association President Mike Seyfert.
Union Pacific Corp (NYSE:) and BNSF Railway, owned by Berkshire Hathaway, stopped issuing permits for grain shuttle trains to Mexico due to congestion and a growing backlog of loaded trains, according to the Union Pacific website and the U.S. Department of Agriculture. USA.
Ferromex, the Mexican railroad that trades with BNSF and Union Pacific, has also seized permits for grain trains at the Eagle Pass and El Paso, Texas, border crossings, the USDA said.
Union Pacific said it is working to facilitate smoother crossings and reduce congestion at the border. BNSF and Ferromex could not be reached for comment.
The situation has left some grain sellers scrambling to find new buyers for their crops and scrambling to recover empty railcars from Mexico for their shipments, Seyfert said.
“When you're trying to make room for what's expected to be a big corn crop and a big soybean crop, the last thing you need is to try to find new business if you can't deliver to your customer,” Seyfert said. .
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