Proposed Rail Merger Could Leave U.S. Farmers on Sidelines

OPINION

As the former Chairman of the House Agriculture Committee, I'm deeply concerned about the proposed merger between Union Pacific and Norfolk Southern.

Combining two of the nation's largest freight railroads would effectively create a coast-to-coast monopoly — reducing competition, raising prices, and putting our farmers at a serious disadvantage getting their products to consumers.

On paper, mergers like this always come wrapped in nice words such as "efficiency," "streamlining," and "cost savings."

In many industries, that can be true, but not in this case. This merger would mean fewer bids for grain transport, slower turnaround times, and reduced service reliability — the opposite of what agricultural producers need.

Take my home state of Texas as an example.

There are more than 230,000 farms in Texas, more than in any other state.

These farms depend on rail to move their corn, cotton, and wheat to market, and to receive fertilizer and other critical supplies.

As Farm Policy News recently reported, farm groups and grain elevators warn that this merger would decrease service reliability and raise shipping costs for producers who already face thin margins and limited rail options. That's not just bad news for farmers — it’s bad for rural economies across the Lone Star State.

The freight rail sector is already dominated by a handful of Class I railroads. More consolidation will only make existing problems worse — service disruptions, delays, and rate increases that ripple through every part of the supply chain.

Should this merger be approved, the combined company would be more than 50% larger than its nearest competitor — and would clearly be in a position to stifle further competition.

We’ve seen this pattern before: when market power concentrates, shippers lose leverage and consumers pay more.

The evidence backs this up.

While overall freight rates have fallen since deregulation in 1980, specific mega-mergers like Union Pacific's acquisition of Southern Pacific led to higher prices when competition disappeared. The Government Accountability Office (GAO) and the Surface Transportation Board (STB) both found that consolidation often reduces costs system-wide but allows dominant carriers to charge more to "captive" customers with few alternatives.

That's exactly why the STB raised its merger-approval standard — to ensure any future deal enhances, not erodes, competition.

Even other rail carriers are sounding the alarm. BNSF, another major Class I railroad, has presented data showing that a Union Pacific–Norfolk Southern merger would drive up shipping costs, reduce competition, and ultimately harm the broader U.S. economy. When direct competitors acknowledge that consolidation goes too far, regulators should listen.

Railroads don’t need to merge to operate efficiently.

Existing intermodal service agreements between major carriers already show that collaboration and route coordination can improve freight movement without eliminating competition.

Cooperation strengthens the system; consolidation weakens it.

Transportation costs account for nearly four percent of the cost of food.

When those costs rise, every family pays more at the grocery store — and small farmers in Texas are at risk of shutting their barn doors for good.

At a time when the administration is rightly focused on strengthening domestic manufacturing and food security, another rail mega-merger would move us in the wrong direction. If shipping costs rise and service falters, U.S. agriculture will lose ground to foreign competitors.

The Surface Transportation Board must apply common sense in its evaluation of this proposed mega-merger, and the Department of Justice (DOJ) needs to utilize every tool in their tool belt to ensure that this merger complies with traditional antitrust standards, which are designed to protect competition, not corporations.

America's food supply chain depends on open markets, reliable service, and fair prices. Let’s stand with our farmers and ensure they have a fair, competitive rail system — not one controlled by two giants that put shareholders ahead of shippers.

Former U.S. Rep. Mike Conaway is a former Chair of the House Agriculture Committee. He represented Texas's 11th Congressional District from 2005 to 2021.