Massive Railroad Merger Could Leave Montana Farmers and Ranchers Over a Barrel

An $85 billion railroad merger could quietly become one of the worst things to happen to Montana agriculture in a generation — and most people haven’t heard about it yet. The proposed combination of Union Pacific and Norfolk Southern is drawing alarm from anyone who depends on rail to move grain, cattle feed, or other farm products to market, and if you’re farming or ranching in this state, you’d better be paying attention.

Here’s the reality for folks on the Hi-Line or anywhere else in Big Sky Country: when you’re shipping wheat out of Havre or moving feed across eastern Montana, you don’t have a lot of options. Roughly 95% of grain elevators nationwide are served by just one railroad. That means if rates go up or service goes sideways, producers are stuck with whatever the railroad dishes out. No negotiating. No shopping around. Just pay it.

What This Mega-Merger Means

This isn’t just another corporate reshuffling. If approved, the Union Pacific-Norfolk Southern deal would create the first coast-to-coast railroad monopoly in American history — 50,000 miles of track across 43 states. The combined company would control roughly 44% of all rail freight movements and more than a third of grain shipments nationwide.

For Montana farmers and ranchers, that consolidation could eliminate the few shipping alternatives that still exist. Right now, producers can sometimes route grain through different interchange points — Chicago, St. Louis — which creates at least a sliver of competitive pressure. This merger would wipe out many of those choices. Gone.

The Squeeze on Rural America

The railroad industry has been consolidating for decades. Since deregulation in 1980, we’ve gone from more than 40 major railroads down to just six. Four carriers now control nearly 90% of all rail freight revenue — a level of market concentration that would trigger antitrust scrutiny in virtually any other industry in this country.

If you’re producing grain or livestock in areas far from navigable rivers or major interstates, rail isn’t just the cheapest option — it’s often the only realistic one. Try trucking a full harvest out of eastern Montana to a West Coast export terminal and you’ll understand real fast why railroad dominance is such a big deal. The math doesn’t work. It never did.

The Numbers Don’t Lie

Last year alone, American railroads moved massive quantities of agricultural products that underpin the rural economy. We’re talking more than 80 million tons of corn, 26 million tons of soybeans, and nearly 26 million tons of wheat. That’s not a rounding error — that’s the backbone of American farm country moving on steel rails.

A significant chunk of that grain originates in Montana before heading to processing plants or export terminals on the coast. When railroads have unchecked pricing power over those shipments, it comes straight out of what farmers receive at the elevator. It’s that direct.

Farmers Can’t Just Shop Around

Most businesses can push back when prices rise — find a competitor, renegotiate, wait it out. Agricultural producers don’t have that luxury. Economists call it “inelastic demand,” but out here we just call it being stuck. When you’ve got grain to move and one railroad serves your area, you pay whatever rate they set. You can’t decide not to ship your harvest.

Surface Transportation Board data shows the problem is getting worse. Since 2004, the share of agricultural rail revenue from “non-competitive” movements — where railroads hold significant pricing power — has jumped from around 30% to more than 50% in recent years. Honestly, that trajectory alone should have regulators losing sleep. Throw a coast-to-coast monopoly on top of it and you’ve got a serious problem brewing.

Montana’s Unique Vulnerability

Montana’s geography makes the state especially exposed to railroad consolidation. Much of the state’s agricultural production happens far from navigable waterways — the Missouri and Yellowstone aren’t exactly barge country in the middle of wheat harvest — which makes rail the dominant option by default. In regions where railroads historically carry 85% to 95% of grain output, producers have almost no leverage when it comes to rates or service standards.

When transportation costs climb, farmers can’t pass those increases downstream to buyers. They absorb it — lower prices at the elevator, thinner margins, harder decisions come spring. Meanwhile, railroads operate under regulations that already allow them to set rates well above their variable costs, particularly where competition is limited. That gap only widens when you hand one company a monopoly.

Beyond Just Higher Costs

The pricing problem is real, but it’s not the whole story. Fewer railroad companies means less redundancy in the transportation network. When disruptions hit — and in Montana, they will, whether it’s a February blizzard shutting down a pass or a labor dispute stalling freight across the region — producers need alternatives. Right now they have precious few. After this merger, they’d have even fewer.

For time-sensitive shipments — livestock feed in the dead of winter, perishables moving to market — reliability matters as much as price. In my experience watching how these consolidations play out, a railroad with no competitive pressure has very little incentive to invest in service improvements or keep capacity adequate during peak shipping seasons. Why would they? The customer isn’t going anywhere.

The Road Ahead

This merger will face federal regulatory scrutiny, but the track record for blocking railroad consolidation isn’t encouraging for agricultural interests. Montana farmers and ranchers have fought this kind of battle before — and the deck has rarely been stacked in their favor. If you think this doesn’t affect you because you’re not in the grain business, think again. Higher transportation costs ripple through the entire rural economy, from the co-op in Shelby to the feed store in Miles City. The time to push back is now, before the deal is done and the leverage is gone.