CN-Iowa Northern combination: Agricultural producers will benefit from cost efficiency

Des Moines Register, Heather Hampton Knodle

A crucial piece of the supply chain and one of the most cost-effective modes of transportation, an efficient rail system is a make-it-or-break-it dynamic to being profitable in any production industry, namely agriculture. Across the Midwest, farmers like me focus on turning out the agricultural products that feed our country. Among these states, Iowa ranks first in producing grain, along with several other agricultural goods. The freight rail network in the region plays a crucial role in transporting corn, soybeans, biofuels, and manufactured goods from the state to markets around the world.

In December 2023, Canadian National Railway Company (CN) finalized an agreement to combine with Iowa Northern Railway (IANR). The added efficiencies of this combination will have a positive ripple effect for farmers and ranchers across the state. The acquisition will bring additional single-line service to the region, ultimately increasing speed to market, reducing inventory carrying costs and time delays from switching between carriers, and will minimize potential plant shortages. From the producer to the elevator to the buyer, reducing these inefficiencies that can hamstring the supply chain is immensely beneficial.

Canadian National Railway was already one of the leading transportation carriers connecting Iowa Northern Railway, meaning there is no disruption through this acquisition. Essentially, it streamlines the supply chain, minimizing the commodity trading hands and maximizing the opportunity to improve the market. With agricultural production costs at an all-time high, these efficiency boosts would be welcomed by Iowa farmers and the industry as a whole.

Access to a broader rail network for shippers comes with this combination, which means a broader buyer base, or greater reach to customers, for agricultural products. This combined company will provide access to CN’s 18,600 miles of rail network that extends from eastern to western Canada into the southern U.S. That linkage into Iowa’s established distribution centers, and the communities that they serve, amplifies, and benefits the product and the producer, and thus the local economy.

Ultimately, CN combining with Iowa Northern is a win for farmers and rural communities. It comes with no disruption to the line, an improvement in handling costs, higher speed of product placement and time efficiencies, as well as reach to expanded markets and network.

Though the railroad combination is subject to review by the U.S. Surface Transportation Board, which is expected to conclude in 2024, the federal regulators did just deem it a “minor transaction.” That is the appropriate classification, and review process should be swift so that Iowa agricultural producers and rural communities can reap the benefits of this deal and the long-term opportunities that will come from it.

Heather Hampton Knodle is a grain and cattle farmer from Illinois who has served in national leadership roles within the agriculture, precision technology, and waterways sectors.