Note: This story has been updated to clarify the tons in thousands.
SIOUX FALLS, S.D. (KELO) — South Dakota ships at least 12 million tons of products from the state by rail annually. That would stop if railway workers strike in the future.
The total in 2019 of inbound, outbound, through, and intrastate freight moved in the state was 115 million tons in one million carloads, according to the South Dakota 2022 State Rail Plan.
“I’m watching it pretty closely,” said Kevin Kjorsvik, the commodities manager for Ringneck Ethanol Energy Plant in Onida. “We are heavily reliant on ethanol leaving the state by rail,” Kjorsvik said.
If rail shipping stops, the ethanol plant can fill to its potential but once it’s filled, “it’s shutdown time,” Kjorsvik said.
Tom Kersting, the chief executive officer of South Dakota Soybean Processors, said the company’s two plants could run for a few days if a strike happened but then, “you’d have to cease everything.”
South Dakota Soybean Processors has a plant in Volga and a smaller plant in Miller.
The U.S. House voted today (Nov. 30) to avert a strike and provide rail workers with paid sick time of seven days. President Biden on Monday called on Congress to intervene in the impasse in a possible labor agreement. The Senate would also need to take a similar action.
Erin Smith, a spokesman for POET, which has 33 bioethanol locations, said in an email statement, “POET and other bioethanol producers are among many industries that rely heavily on rail for transport, and for that reason we hope a path forward is swiftly agreed upon to prevent a strike and keep our nation moving.”
If the soybean processor or ethanol processor would need to shut down during a rail strike, that would impact the business’s finances, the employees and the farmers who provide grain to the plants. Also, farmers use feed made from ethanol and soybean processing. If the plants are not processing there is no feed supply.
Of the products that originate in the state, farm products are the top commodity shipped from the state at 7,764, tons (in thousands) or about 7.7 million. The figure is from the 2022 South Dakota Department of Transportation State Rail Plan and is a 2019 figure.
The figures used by the 2022 SDDOT rail plan come from the 2019 STB Carload Waybill Sample the Federal Highway Administration (FHWA) Freight Analysis Framework. The plan is listed as a draft but the SDDOT said on Nov. 30 it had passed the draft level.
Products that come from the state that are also shipped out-of-state include clay, concrete, glass or stone, chemicals or allied products and others.
South Dakota Soybean Processors produces soybean oil used in the food, feed, industrial, and renewable fuel, according to its website.
Kersting said about 10 to 15 cars of soybean meal are produced each day in Volga. Another roughly five cars a day of soybean oil are shipped, but the number can be less, he said.
The plant in Miller is smaller and produces about two rail cars of product a day, Kersting said.
A railcar holds about 100 tons of product.
About 2,793 tons (in thousands) or about 2.7 million tons of ethanol were shipped from South Dakota in 2019, according to the SDDOT.
“On average we ship out two shuttle trains a month,” Kjorsvik said. “Every third month, we have a third train.”
The shuttle trains have 96 cars each.
The South Dakota railroad system is made up of multiple shortline railroads and several national railways.
The systems are connected as many shortline railroads will link, or deliver, to a national, larger railroad.
If employees of the smaller railways in South Dakota are not on strike but the unions from the larger railroads are, the shipping process still stops.
The shortline that serves Ringneck links to a BNSF switch site, Kjorsvik said. “If BNSF isn’t running, those (shortlines) can’t,” he said.
The top destination for farm products in general is Washington. Crops such as corn and soybeans go to Washington and are destined for overseas export markets, according to the SDDOT. Washington is also the top destination for ethanol.
More products are shipped by rail from the state than into the state, but a strike would still make an impact.
The state had a 3,734 tons in thousands or about 3.7 million tons of inbound freight in 2019, according to the SDDOT.
Coal from Wyoming is the largest inbound product. The state received 1,821 tons in thousands or 1.8 million tons of coal in 2019.