ARLINGTON, Va., July 31, 2024 — The National Grain and Feed Association (NGFA) and members of the Agricultural Transportation Working Group called on U.S. federal officials to address rail service capacity issues in Mexico that are hindering U.S. agricultural trade.
Demand for rail service coupled with insufficient investment in rail infrastructure has led to embargoes, congestion, and slowed servicing of U.S. agricultural products by Ferromex, a main rail carrier in Mexico, the groups said in a July 31 letter to Surface Transportation Board Chairman Robert Primus, Agriculture Secretary Tom Vilsack and U.S. Trade Representative Katherine Tai.
Agricultural shippers have encountered rail service constraints with Ferromex for almost a year due to the rail line’s need for rationing and the relatively lower rates for agricultural products, the groups noted.
“We urge you to speak with your colleagues in Mexico to encourage increased investment in the country’s rail network and to ensure U.S. agricultural products do not disproportionately bear the burden of rail service constraints,” the letter states.
Mexico is the largest export market for U.S. agricultural products with over $30 billion in U.S. agricultural products exported to Mexico in the past year.
“As our most natural trading partner, Mexico is a critical stakeholder for the U.S. agricultural supply chain,” the groups said. “However, the United States’ proximity advantage over agricultural competitors like Brazil and Russia is reduced by the rail capacity problem, leading to higher exports into Mexico from these competitors.”
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The NGFA, established in 1896, consists of grain, feed, processing, exporting and other grain-related companies that operate facilities handling U.S. grains and oilseeds. Its membership includes grain elevators; feed and feed ingredient manufacturers; biofuels companies; grain and oilseed processors and millers; exporters; livestock and poultry integrators; and associated firms that provide goods and services to the nation’s grain, feed and processing industry. The NGFA consists of 27 affiliated State and Regional Grain and Feed Associations, is co-located and has a strategic alliance with North American Export Grain Association, and a strategic alliance with Pet Food Institute.