The potential $85 billion merger between Union Pacific and Norfolk Southern is sparking concern among agricultural shippers, as it threatens to further limit their transportation options. Railroads play a vital role in transporting bulk commodities like grain and fertilizer, and this consolidation could intensify the challenges faced by farmers reliant on a single railroad for service.

With the elimination of independent carriers, farmers and ranchers may experience a substantial reduction in bargaining power. This situation leaves them more susceptible to escalating transportation costs, which they cannot easily offset. Recent data indicates agriculture is increasingly carrying the weight of railroads' cost recovery, with revenues from farm-related rail transport soaring over the last 20years.

Additionally, major rail mergers can introduce heightened systemic risks, particularly for time-sensitive agricultural products. A decrease in independent networks amplifies the impact of service disruptions, raising concerns over food supply and national resilience.

The merger would establish the first coast-to-coast Class I railroad in U.S. history, linking 50,000 route miles across 43 states. While advocates argue that this consolidation may improve operational efficiency and service reliability, critics underscore that increased market concentration could lead to unfavorable pricing and service conditions for agricultural shippers who already have limited alternatives. The implications of this merger could fundamentally reshape the agricultural landscape in rural America.

The American Farm Bureau Federation opposes the merger between Union Pacific and Norfolk Southern.

Editor’s Note: To read more about the risks for rural supply chains, visit fb.org/market-intel.