USDA says feed inventories in the southeast may be insufficient to deal with major snowfalls this winter unless two railroads' operating performance is improved.

"Serv ice reliability continues to be an issue in the eastern United States, particularly on the lines of the former Conrail system, now operated by CSX Transportation and Norfolk Southern," USDA says. "Stronger demand for rail transportation and problems associated with flooding caused by Hurricane Floyd reduced grain train speeds in October. Dwell times in key terminals that connect the eastern Corn Belt and Southeast markets also continue to be up from their levels before the takeover..."

A "serious concern" for eastern Corn Belt grain and feed ingredient shippers and southeastern poultry and hog feeders is "the toll that winter could take on both NS and CSXT," USDA says. Without significant improvements in operating performance on both railroads in the next few weeks, it may be impossible to expand Southeast feed inventories sufficiently to deal with any major snowfalls that could block rail lines in critical passes through the eastern mountains.

Railroads in the western United States have been able to keep their systems "fluid and meet shipper transportation needs despite strong demand for several months," the report says. Burlington Northern Santa Fe has kept its past-due car orders substantially below year-earlier levels by keeping a high percentage of its fleet loaded and moving to destination and at the same time holding grain car cycle times at some of the lowest levels in weeks.

The entire report is available on the Internet at http://www.ams.usda.gov/tmd/mta/mta_special_reports.htm.