US-Mexico rail delays hit agriculture sector ahead of possible port strike By Reuters

By PJ Huffstutter

CHICAGO (Reuters) – Railroad derailments are disrupting export trade between the United States and Mexico and hampering agricultural supply chains as the fall harvest gets underway, farm groups said on Friday.

A possible East Coast and Gulf port strike that could begin Tuesday would exacerbate the problems, nearly 200 farm groups said in a letter sent to the White House on Friday.

While Mexico is the largest export market for U.S. corn, it has also been a key outlet this year for agricultural exporters looking to offset sluggish purchases from China, a top buyer of the commodity.

Mexico’s imports of U.S. agricultural products rose 27 percent in the first seven months of 2024 from a year earlier, government data show. But rail capacity can’t keep up with demand, said National Grain and Forage Association President Mike Seyfert.

Union Pacific Corp (NYSE: ) and Berkshire Hathaway-owned BNSF Railway have stopped issuing permits for grain shuttle trains to Mexico due to congestion and an increasing number of loaded trains, according to Union Pacific’s website and the U.S. Department of Agriculture US.

Ferromex, the Mexican railroad that exchanges with BNSF and Union Pacific, also has embargoed permits for grain trains at border crossings at Eagle Pass and El Paso, Texas, 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 retrieve empty railcars from Mexico for shipments, Seyfert said.

“When you’re trying to make room for what’s predicted to be a big corn crop and a big soybean crop, the last thing you need is trying to find new business if you can’t deliver to the customer,” Seyfert said. .