Some transportation groups are skeptical and some ag groups are seeking more information about the implications of a planned merger between rail rivals Union Pacific and Norfolk Southern.
DTN reported both companies’ boards of directors unanimously agreed to a deal July 29 in which Union Pacific will acquire Norfolk Southern for $85 billion, resulting in a combined enterprise worth $250 billion.
If approved by the federal Surface Transportation Board, the merger would create the first intercontinental railroad in the U.S., linking Norfolk Southern’s 19,500-mile network in 22 western states to Union Pacific’s nearly 33,000 miles in 23 western states.
Described as potentially the largest such buyout in American rail history, the acquisition would create a rail line that spans more than 50,000 miles over 43 states, linking more than 100 ports and touching nearly every corner of North America.
“This combination is transformational, enhancing the best freight transportation system in the world — it’s a win for the American economy, it’s a win for our customers and it’s a win for our people,” Union Pacific CEO Jim Vena said in a news release. “It builds on President Abraham Lincoln’s vision of a transcontinental railroad from nearly 165 years ago and advances our safety, service and operational excellence strategy. I am confident that this historic transition will enhance competition to benefit customers, communities and employees while delivering shareholder value.”
But while the two companies say a transcontinental railroad will be more efficient, increase competitiveness for workers and improve transit times by eliminating interchange delays, some ag and transportation groups are skeptical.
Mike Steenhoek, executive director of the Soybean Transportation Coalition, said in industry reports last week the merger could lead to a rise in rail rates and decrease market competition — neither of which are ideal for farmers.
“One of the things that history teaches us is that when there has been consolidation, when there have been mergers within the rail industry, that often results in a decreased competition for those agricultural shippers and can result in higher rail rates and a decrease in service,” Steenhoek noted. “Plus, if there is less competition, agriculture is often at the bottom of the food chain.”
Shortly after the Union Pacific-Norfolk Southern announcement, the National Grain and Feed Association (NGFA) announced it would begin an “extensive evaluation of the proposed merger to better understand its implications for our industry.”
The organization estimates that about 10% of all rail shipments annually — or 3.2 million rail cars of grains, oilseeds and other products — are agricultural, with 26% of grain requiring at least one rail movement.
“NGFA looks forward to hearing from Union Pacific and Norfolk Southern railroads and learning how they believe the merger will create resilient and reliable efficiencies and incentives in timeliness of service and deliveries — along with fair and reasonable rates to better serve our members,” NGFA President and CEO Mike Seyfert said in a prepared statement to media. “NGFA will also undertake extensive analysis and discussions with our members to determine the impact on cost and competitiveness for American agriculture.”
Similarly, a representative of the American Farm Bureau Federation said more time is necessary to determine the merger’s potential impact on the agricultural industry.
Some shipping groups have already voiced their concerns with the merger.
The American Chemistry Council, Freight Rail Customer Alliance and National Industrial Rail League said in early reports their members worry about the potential for reduced market competitiveness and increased monopoly of U.S. rail lines, the majority of which are dominated by four companies.
“The impact of a transcontinental merger between two of these railroads threatens to leave American manufacturers, farmers and energy producers with even fewer competitive options to ship by rail,” a statement from the American Chemistry Council said.
An application from Union Pacific and Norfolk Southern is pending before the Surface Transportation board.
The two companies expect to file an application before the federal regulatory board within six months; the board then has 16 months to review it.
In a news release, Union Pacific said the two companies hope to see the acquisition — which is also pending approval from the companies’ shareholders — finalized in 2027.
This story was distributed through a cooperative project between Illinois Farm Bureau and the Illinois Press Association. For more food and farming news, visit FarmWeekNow.com.
This article appears in SBJ August 2025.