Why Leading Ag Voices Are Urging the STB to Reject the UP-NS Merger

Dear BNSF Customer,

For decades, we've worked side by side with America's agricultural producers - through record harvests, drought years and every peak season in between. That partnership is why we want to make sure you're hearing the full picture as Union Pacific ramps up its outreach to the farm community around its proposed merger with Norfolk Southern.

This week, UP highlighted an example of single-line service from a merged UP/NS - a faster wheat move from Kansas to Pennsylvania. UP did this to argue the merger will strengthen rail service for farmers. We do not agree. We'd offer a simple reframe: improvements like faster service come from investment and railroad-to-railroad collaboration that already happens today, without handing one carrier control of more than half the nation's freight rail market. A faster lane on paper is not the same as real competition at your elevator.

The agricultural community itself is making that case in opposing the proposed merger. On Aug. 13, the National Grain and Feed Association asked the Surface Transportation Board to reject the application, with its board of directors concluding the merger "does not cross the bar required under the [STB's] 2001 procedures" - standards that require a merger to enhance competition, not merely preserve it. The American Farm Bureau Federation has likewise come out in opposition, warning the deal "would lead to greater consolidation and higher costs when farmers are already hard-pressed with economic headwinds beyond their control. Ultimately, those costs ripple far beyond the farm gate, impacting not only the price of food for Americans, but also likely pushing farm margins even lower."

These concerns aren't theoretical. Consider what market concentration looks like in the real world: less access to both demand and supply markets in times of volatility in commodities. For agricultural shippers, who often rely on rail as a critical transportation option, that level of concentration will likely mean fewer competitive choices and less flexibility over time.

UP also highlighted its decision to expand the Committed Gateway Pricing (CGP) program to certain bulk train movements. Yet even as expanded, the program would apply to less than 1% of rail traffic, remain available only during the STB's oversight period, and, according to the application, increase rates for many customers that use it. UP and NS note that the expansion doubles eligible traffic, but that increase is from roughly 0.4% to 0.9% of all rail shipments. A temporary program affecting a relatively small number of shipments does not address the broader, long-term competitive questions raised by a merger of this scale. In a recent filing opposing the merger, a group of Republican attorneys general representing some of America's largest agriculture-producing states reached the same conclusion about CGP, stating that "A proposal this narrow, this exclusion-laden, and this temporary cannot offset the harm of combining two railroads into a single entity that would control more than 50% of the U.S. Class I rail market - let alone enhance rail-to-rail competition."

BNSF's position remains focused on the central issue: the proposed merger will harm competition. The STB has repeatedly emphasized that a merger of this scale must do more than just preserve the status quo - it must strengthen competition and serve the public interest. We don't believe this application meets that standard for agriculture.

Your voice matters. With the STB's Sept. 4 deadline to file a Notice of Intent to Participate approaching, we encourage you to make sure the Board hears directly from the agricultural community - step-by-step guidance is at BNSF.com/PreserveRailCompetition.

As always, please don't hesitate to reach out to me or my team with questions. We deeply value our long partnership with the agricultural community, and we'll keep you informed as this process moves forward.

Sincerely,

Angela Caddell
Group Vice President, Agriculture & Energy Products