Looming rail strike threatens Kansas, Missouri farmers. They’re on ‘pins and needles’

Kansas and Missouri Republicans are pushing for Congress to intervene to prevent a looming rail workers’ strike that threatens to disrupt the Kansas City region’s agricultural industry and snarl the flow of goods.

Senate Republicans attempted to pass a measure through the Democratic-controlled chamber Wednesday to block a strike as the country’s major railroads and the unions representing railroad workers have yet to finalize a contract ahead of a Friday strike deadline.

Sen. Bernie Sanders, a Vermont independent who caucuses with Democrats, objected, pushing the labor unions’ request for 15 days of sick leave while criticizing the profit margins of the rail companies.

The legislative skirmish came as Democratic President Joe Biden’s administration is playing a growing role in trying to resolve the labor dispute ahead of the deadline. Negotiators were meeting with U.S. Secretary of Labor Marty Walsh on Wednesday.

Fears are mounting that a strike that brings freight rail to a halt would immediately harm agriculture across the region, as well as the nation as a whole. Commodities such as corn and grain sorghum would quickly pile up if they can’t be shipped to processors. Livestock feedlots may have difficulty obtaining food for animals.

“Any interruption in rail service would be yet another blow to farmers, not only in the Midwest but across the country,” Missouri Farm Bureau President Garrett Hawkins said.

Many farmers have experienced supply chain disruptions over the past two years unlike anything they’ve ever previously experienced, Hawkins said, as the pandemic upended the economy. They’re now bracing for another major upheaval.

“Now, on the cusp of harvest — harvest actually underway for corn and soybeans or nearing harvest — to know that literally within hours we may have a strike that imperils rail service puts farmers and ranchers on pins and needles,” Hawkins said.

The Kansas City region plays a central role in the rail industry. Kansas City is the nation’s largest rail hub by tonnage, according to KC SmartPort. Freight rail traffic here is the second-busiest behind only Chicago.

Five of the Class I carriers — the largest rail companies — intersect in the region: BNSF, Union Pacific, Norfolk Southern, Canadian Pacific and Kansas City Southern, which is headquartered in the city and employs nearly 1,200 people locally.

Rep. Emanuel Cleaver, a Democrat who represents Kansas City, said the city plays a vital role in getting food to both Canada and Mexico.

“We don’t need any problems,” Cleaver said. “And I think the president and the administration should do anything short of taking over the railroads.”

On the passenger side, Amtrak will halt all long-distance trains beginning Thursday. Its workers wouldn’t be involved in a possible site, but Amtrak trains run along tracks owned by freight railroads.

While a strike would upend a host of industries and could lead to shortages of a host of products and materials, the potential consequences for agriculture appear especially pressing given the basic importance of food production. Inflation has already sent grocery costs soaring this year and any additional supply chain problems would almost certainly lead to more price hikes.

“We won’t feel it for the first week or two weeks, but it’s going to definitely hit us hard,” said George A. Zsidisin, director of the Supply Chain Risk And Resilience Research Institute at the University of Missouri-St. Louis.

A short strike lasting only a day or so likely wouldn’t have a major impact. But Zsidisin said he feels for those with limited resources who would be hit by rising grocery prices by a lengthy strike. Over the past year, they have already soared 13.5% — the biggest 12-month increase since 1979.

“It’s going to be a heck of a challenge,” Zsidisin said.

Asked about a contingency plan if the unions strike, White House Press Secretary Karine Jean-Pierre said Tuesday that the Biden administration has been working with other modes of transportation to see if they could step in if the supply chain is disrupted and that they were attempting to figure out which supply chains and commodities were most likely to face severe disruptions.

Biden has personally called both the unions and companies and the White House said the administration has been talking with both sides since the spring.

“A shutdown would have a tremendous impact on our supply chains, as you all know,” Jean-Pierre said. “It’s going to have a ripple effects into our overall economy, on American families. A shutdown is not acceptable. That is not something that we want.”

Lawmakers warn of supply chain disruption if strike goes forward

Congress has the ability to extend the deadline for the two sides to come to an agreement, which is currently set for Friday. They could also attempt to force the sides to accept a recommendation issued by the President’s Emergency Board, which was created in July to help resolve the dispute.

Sen. Roger Wicker, a Republican from Mississippi, and Sen. Richard Burr, a Republican from North Carolina, attempted to push through a resolution that would have forced both sides to accept the emergency board’s recommendations unless they could come to an agreement on their own by Friday.

“If the trains stop running, our economy grinds to a halt,” Wicker said. “And that’s the very reason that this law is in place.”

Wicker said 48 Republicans backed the resolution. Hawley said he was not part of their effort, even though he wanted to avoid a strike.

“I think we should all want to avoid a strike,” Sen. Josh Hawley, a Missouri Republican, said.

Rep. Sharice Davids, a Kansas Democrat and vice chair of the House Transportation Committee, didn’t answer questions when a reporter approached her in the U.S. Capitol on Wednesday. Instead, her office issued a statement through a spokeswoman that avoided saying whether Congress should intervene.

“Our supply chains have been under enormous stress and have contributed to rising prices, which is why I’ve made it a top priority to make them stronger,” the statement said. “We have to keep making progress on that front, and I’m hopeful we will see an agreement that maintains good-paying, union jobs before the cooling off period ends.”

Sen. Jerry Moran, a Kansas Republican, warned in a speech on the Senate floor on Tuesday that a strike would disrupt Kansas farmers. He voiced support for congressional intervention if the railroads and the unions can’t reach an agreement.

“In my state, the harvest is well underway, and farmers need to be able to ship their crops by train around the country and to our ports where the grain will be sent to feed a hungry world,” Moran said.

Retailers would also be affected in addition to agriculture, said Suman Mallik, a professor at the University of Kansas School of Business. Businesses will not have their inventories replenished, leading to shortages.

Prices would also rise because the trucking industry – the most immediately available alternative to rail – doesn’t have the capacity to absorb all the material and products that would need transportation.

“The people who need these goods, they’re competing for transportation capacity,” Mallik said.

The railroads have reached tentative agreements with most of their unions, including a ninth deal announced Tuesday, based on the recommendations of a Presidential Emergency Board that Biden appointed this summer that called for 24% raises and $5,000 in bonuses in a five-year deal that’s retroactive to 2020. The deal also includes one additional paid leave day a year and higher health insurance costs.

“It is critical that the remaining unions promptly reach agreements that provide pay increases to employees and prevent rail service disruptions,” the National Carriers’ Conference Committee, which is representing the railroads in negotiations, said in a statement on Tuesday.

However, the International Association of Machinists and Aerospace Workers (IAM) District 19 announced on Wednesday that its members had voted to reject the tentative agreement.

“IAM freight rail members are skilled professionals who have worked in difficult conditions through a pandemic to make sure essential products get to their destinations,” the union said in a statement. “We look forward to continuing that vital work with a fair contract that ensures our members and their families are treated with the respect they deserve for keeping America’s goods and resources moving through the pandemic.”

The Associated Press contributed reporting