Mont. political, ag leaders react to BNSF purchase

Montana political and agricultural leaders hope Berkshire Hathaway's planned purchase of the Burlington Northern Santa Fe railroad will lead to lower shipping costs in Montana, but they doubt much will change.

Gov. Brian Schweitzer, a farmer and rancher, said Tuesday he had spoken to both Warren Buffett, chairman of Berkshire Hathaway, and Matthew Rose, BNSF's chairman, president and CEO.

"I said to both of them that I look forward to working with both in the future to improve service and shipping costs for our farmers, our miners and our merchants," Schweitzer said.

U.S. Sens. Jon Tester and Max Baucus said they also are concerned about shipping rates for Montana farmers and other businesses.

"Montana agriculture would be in pretty rough shape without the railroad, and vice versa," said Tester, an organic grain farmer. "No matter who owns the rails, we need to work together to bring down shipping rates for Montana farmers, ranchers and businesses."

Baucus said he spoke with Buffett on Tuesday.

"Warren Buffett is known for investing in the future of America, and you can be sure I'll be keeping a close eye to make sure Montana producers get a fair shake on shipping rates," Baucus said.

Jake Cummings, executive vice president of the Montana Farm Bureau Federation and Big Sandy farmer Lochiel Edwards said they don't think the purchase will change much.

Edwards was a key negotiator when the Montana Farm Bureau Federation and the Montana Grain Growers approved a contract to mediate shipping disputes with BNSF. The agreement, signed in January, allows farmers to have complaints about rail rates heard without filing an expensive case with the Surface Transportation Board.

"We've been assured that this deal will not affect the day-to-day operations of the company and we don't have enough information at this point to doubt that," Cummins said.

Montana Farmers Union president Alan Merrill doesn't expect things to change, either, but he doesn't think that's a good thing.

"Montana's farmers have been in a captive shipper situation for years, with BNSF controlling more than 90 percent of the rail miles in Montana," Merrill said. "This purchase will not diminish that market dominance or its detrimental effect on Montana's farmers. In fact, the purchase could lead to more consolidation and concentration of the rail industry."

BNSF employs 2,000 workers in Montana with an annual payroll of $118 million.

Buffett's offer to buy BNSF valued the company at $34 billion. Berkshire Hathaway already owned 22 percent of the company and the offer would purchase the rest of the stock for $100 a share. Stock was trading in the $97 range after the announcement, up from Monday's closing price of just over $76.