Freight Rates Under Pressure

Increased production has led to an increased need for transportation, which has led to rising costs and lower commodity prices. “We’ve seen over the last month some meaningful adjustments in transportation costs to move grain and that has helped increase local prices; that in turn has helped increase the amount of grain that’s in the system,” said Mike Kvistad, agribusiness consultant. “The question then is can freight adjust meaningfully lower from current values? In the short term, I think the answer to that is no.” A low price environment has been sustained for a matter of years “and they’re not seeing the same reductions on the cost side of their business.”