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UP gears up to meet 2014 corn shipments

By Staff | May 11, 2014

UNION PACIFIC RAILROAD locomotives pull a unit train of grain cars from an elevator in Minnesota. The company reported an upturn in moving corn shipment volumes in 2013 compared to drought-plagued 2012, and is gearing up facilities and infrastructure anticipating another record corn crop in 2014.

(UP) The 2012 drought, which was especially severe throughout Union Pacific’s served territories, adversely impacted grain shipments through the first nine months of 2013.

The 2013 fall crop harvest provided relief, with corn production nearly 30 percent above 2012 levels.

Grain shipments increased 41 percent in the fourth quarter, driven by a 93 percent increase in exports.

Despite the growth in the fourth quarter, grain shipments were down 4 percent for the full year compared to 2012.

Export wheat shipped to the Gulf and Pacific Northwest increased in the second half of 2013, partially offsetting the overall decline in other grain shipments.

Harvest outlook

Record domestic crop production in 2013 is expected to drive volume growth opportunities for agricultural products in the first half of 2014 against drought-impacted volumes in 2012.

Exports should see strength from more competitive U.S. commodity prices.

The improved cost-competitiveness of corn versus substitute feed grains for animal feed rations is also expected to drive growth in domestic volumes.

While the U.S. Department of Agriculture is projecting another record crop in 2014, actual production will depend on weather conditions throughout the growing season.

Second half grain volumes, and to a lesser extent grain products, will depend on harvest yields in the United States and throughout the world.

Capital improvements

Union Pacific will invest $3.9 billion in its network and operations in 2014.

From 2007-2013, Union Pacific invested more than $21.6 billion in its network and operations to support America’s transportation infrastructure.

Of the $3.9 billion, UP plans to commit $1.7 billion for infrastructure replacement and to invest $680 million for capacity and facility enhancements.

The railroad is also investing $845 million to purchase locomotives and other railroad equipment and $450 million would be targeted for federally-mandated positive train control.

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