Railroad Fuel Surcharges on U.S. Grain Double

Fuel surcharges on U.S. grain shipments have more than doubled over the past year, reaching 48 cents a mile per rail car in September. Data from the United States Department of Agriculture shows these surcharges now represent 11% of total rail transportation costs for corn and soybeans, an increase from 5% a year ago.

Record diesel prices exceeding $6 a gallon, driven by the escalating war with Iran, are fueling the spike. This has resulted in a weaker basis for farmers, who receive lower prices for their crops as grain elevators pass transportation costs back to growers. ADM Milling Limited has passed along these costs and subsequently increased its 2026 profit forecast.

Railroads including BNSF, CSX, and Union Pacific argue that surcharges are necessary to ensure rates reflect operating costs. However, the Surface Transportation Board reported that railroads collected $2.93 billion in fuel surcharges during the second quarter. Farm groups and state attorneys general have expressed concern that a potential merger between Union Pacific and Norfolk Southern would further increase market power and reduce cash prices for grains.