Will it help bring more overseas cash to rural areas? It might, but it depends on the crop. And it depends on the farmer.

The train-loading equipment planned for the Montevideo station will make it possible for farmers to load 20-foot or 40-foot shipping containers full of corn, soybeans or other crops onto trains, something that they can only do in Minneapolis or St. Paul today. (Farmers who sell their crops on the export market typically load up at their farm and then truck their harvested crop to a rail yard in Minneapolis.)

It's the idea of Craig Damstrom, president and CEO of Edina-based North Star Rail Intermodal and a former trade official with the state Department of Agriculture.

Shipping by truck is more expensive, so the trains might save a farmer up to $10 a ton in transportation costs, according to Damstrom. A rail system also would make it easier for farmers to keep their corn or soybeans separate from other shipments, an important consideration for organic, non-genetically modified and other specialty crops.

"From Montevideo, if they want to go all the way to Tokyo or Taiwan, we will give them a price," said Damstrom.

He said his previous work developing markets for Minnesota farmers in Mexico, Cuba and elsewhere revealed the opportunity for a transportation company that could help farmers export their crops more cheaply. North Star has 10 investors, including himself.

The company has focused its plan on so-called short-line railroads that reach into rural areas like Montevideo, which is 130 miles west of Minneapolis.

The nation's trade imbalance means that there are thousands of empty shipping containers going back to Asia, Damstrom said. "These containers are coming in full and two-thirds are going back empty," he said.

A system that would allow farmers to quickly fill those containers and get them back into the shipping channels could make it more economical for shipping companies to take Midwest agricultural goods overseas, he said. Trucks also face weight limitations that may leave some containers only partially filled; the railroad doesn't have the same restrictions, Damstrom added.

Some of the containers will come directly from farms and some from ethanol plants unloading byproducts from the distillation of ethanol. The rail station is expected to open for business next month.

The state exported 610 million bushels of corn annually between 2002 and 2006, about 56 percent of the crop. That should fall to 530 million bushels annually, or about 39 percent of a 1.36 billion-bushel crop, by 2012, according to the Minnesota Corn Growers Association. Much of the difference will be because of higher demand for corn for ethanol.

It's a four- to five-hour ride from Montevideo on the rail line. The track handles about two trains a day, said Mark Wegner, executive vice president and chief operating officer for the Twin Cities and Western Railroad Co. The business expected from North Star Rail Intermodal would add about 50 percent more traffic to the Montevideo-to-Minneapolis section of the track, he said.

The trains will arrive at Shoreham Yards, a rail yard owned by the Canadian Pacific Railway between Central and University Avenues and 27th Avenue NE. and St. Anthony Parkway.

Source: Minneapolis Star Tribune