Rail Merger Costly for Farmers, AFBF Says

The American Farm Bureau Federation said the proposed merger of the Union Pacific and Norfolk Southern railways would leave farmers with fewer transportation options and vulnerable to shipping cost increases at a time when balance sheets are squeezed to the breaking point.

AFBF economists analyzed the proposed merger and said the risks are clear.

“It would leave farmers more dependent on fewer railroads at a time when they already have almost no ability to walk away from higher costs or poor service,” said an AFBF Market Intel Report. “The merger doesn’t create new competition for agriculture.”

The financial trajectory, AFBF noted, of the merging carriers also warrants attention. Between 2014 and 2024, Union Pacific’s total carload volumes declined by approximately 13%, while revenue per unit increased by roughly 17%. Over the same period, combined UP–NS volumes have fallen by about 11%. Against that backdrop, projections that the merged system will quickly reverse course and grow volumes by double digits in just a few years deserve scrutiny.

The report also said the merger removes what little leverage remains by eliminating key routing and interchange options that currently help keep rates and service in check.

The $85 billion merger would create the first coast-to-coast Class I Railroad in U.S. history. The system would span roughly 50,000 route miles across 43 states, linking the dominant western and eastern rail networks into a single carrier.

Proponents describe the transaction as an “end-to-end” merger that would streamline operations, reduce interchange delays and improve service efficiency.

"For farmers and rural communities, this merger is not about bigger trains or faster routes," the AFBF report stated.  "It is about who has choices and who does not, and whether the risks of consolidation are borne by shareholders or by the people who depend on rail to get their crops to market."

Click Here for additional details from the Farm Bureau.

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