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| BNSF just completed a shuttle auction whereby the industry “purchases” capacity for a defined period of time.
So today while network performance is poor …the market( consumers) of freight paid significantly for the access to rail cars and subsequently rail freight.
Generally, those “costs” paid by the elevator are expressed through the basis…in this case a lower basis at the farm gate.
On the end user side…The price of transportation and the destination basis move in the same direction..the inverse of the origin side…The price of securing empty and committed capacity at the origin do not increase destination values.
Facility margins will be wide….while end users pay for trains that are moving rather than sitting loaded at origin.
Producers without bins this fall will take the hardest hit as post harvest basis recovery should be pretty impressive. | |
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The markets job.
