In Trains We Trust

In Trains We Trust
August 20, 2008

With the end of the current business sessions of the 110th U.S. Congress on the horizon, farmers across America and their representatives are doing their utmost to bring pressure on U.S. lawmakers to grant one more vital bill.

The average consumer has surely noticed that prices of food, both domestic and imported, have been on the rise. There are various reasons for the price hikes. However, one factor that has been common to most markets is the effect of high fuel prices.

How does the price of a barrel of crude oil from the Middle East affect the price of hamburger rolls made from U.S. grown wheat?

In factoring the wholesale and eventual retail prices of food items, transportation is a key factor. Local grown tomatoes sold at a farmer's market will have a much lower price than produce that has been shipped halfway across the country. On the other hand, supplying fresh daily produce to all corners of the nation is a luxury not enjoyed by many countries on this globe. Luxury, though, has its price tag.

Truck transport was the most common mode of long haul transportation until recently. The flexibility of routes, combined with the affordability of the transport mode, made trucking the choice of many farmers and suppliers. However, as trucking companies have been re-thinking the economic viability of long haul transport, railroad freight has become a realistic option. In many cases, trucking combined with rail freight has proven to be a successful combination.

Farmers across America have been relying more on rail service to ship their crops to the designated markets. Washington, D.C., though, has been making the economic reality of rail freight difficult for the farmers. In order for food prices to remain reasonable, rail prices must be reasonable. Antitrust exemptions granted to the freight rail industry allow the rail companies to charge farmers exorbitantly high prices. Removal of these exemptions would force the rail companies to become competitive and, thus, would reduce the rates and provide better service, also a complaint of the farmers. The lower rates would be passed on to the consumer. As many farmers rely heavily on the railroads, they feel that they are being held captive with no place to turn, and no other options.

The American Farm Bureau Federation has been pressuring members of the House and Senate to eliminate the Freight Rail Antitrust Exemptions. Senate bill 772 and House bill 1650 are companion bills that would make the antitrust exemptions obsolete. Farmers, growers, and consumers hope that the bills soon find a favorable place in the nation's law books.

The Price of Living in Rural America

The Price of Living in Rural America
July 20, 2008

Throughout the US, a common topic of conversation is the rising price of fuel. One can't escape it. Soaring gas prices affect virtually every American in one way or another. The Constitution of the United States grants equal rights to all citizens of the nation. However, in the current battle against rising fuel costs, rural Americans feel that carrying the burden is far from equal for all Americans.

It is a fact of life that vehicles and travel are an intrinsic part of life in rural America. With many services and places of employment located many miles from homes, there remains no alternative except driving from place to place.

According to figures published by the Federal Highway Administration, rural Americans drive an average of 3,100 miles more per year than urban dwellers. In a recent May 2008 survey conducted by the Oil Price Information Service, an independent fuel analysis company, figures showed that residents of rural areas spend as much as 16 percent of their available monthly income at the fuel pump. Counterparts in major urban centers spend as little as 2 percent.

It is not uncommon these days to hold down a second job in rural areas, simply to pay the gas bill. Salaries have not risen at the same pace as fuel expenses. Therefore, absurd as it may seem, extra income is necessary to cover the expenses of going to work.

With many people living distances from neighbors, carpooling has become a viable option, although not without its challenges. Due to the distances, travel must begun much earlier than it would in the city, sometimes well before sunrise.

Some employers have made accommodations by extending workdays and allowing employees to work a four day work week, thus reducing travel by 20 percent. Some, if few, are participating in fuel expenses.

Many city dwellers have been trading cars and purchasing hybrids in order to reduce fuel consumption. However, in outlying areas, where many gravel roads are difficult to traverse, smaller, more fuel-efficient cars are not realistic.

Leisure time has certainly been affected. The Montana Department of Transportation released figures showing that weekend leisure travel was down 8 percent in June, compared to the same time last year.

Bulletin boards, electronic and other, are filled with listings of people looking to share rides for shopping and doctors visits. Quite often, a medical specialist may be located hundreds of miles from home. The travel cost may exceed the cost of the visit or treatment.

Some families have changed the way they eat, how they dress, or how they manage their homes. Expenses do have to be regulated. As travel cannot be eliminated, the expenses must be offset elsewhere.

The price of crude oil is affecting the way all Americans live.