Transportation, marketing, and storage expenses for farmers are projected to hit a record $14 billion in 2026, according to a recent report by the American Farm Bureau Federation.

Farmers and small businesses are already being squeezed. Every additional dollar in shipping costs is a dollar that doesn’t come back to a farm family, a small manufacturer, or a local community.

Last week, rail company Union Pacific submitted a revised application to acquire its competitor, Norfolk Southern. That merger will make things worse. It will give additional noncompetitive control to a monster railroad that already controls  almost half of all rail traffic in the U.S. Also, public threats have been made to anyone who would dare oppose this bad deal. 

At a recent Southwest Association of Rail Shippers conference, Union Pacific CEO Jim Vena reportedly said that he’ll “raise rates for customers that don’t publicly support the merger.” Vena may claim he was joking, but for his customers and stakeholders, this is no laughing matter. When powerful CEO’s make public threats, those threats must be taken seriously.

That is not the language of a company confident in the merits of its case. It is, instead, a warning shot. And it deserves to be treated as one. This is unacceptable behavior that will only get worse if the company is allowed to operate a coast-to-coast monopoly. 

Four companies already control roughly 90% of U.S. freight rail traffic, and rates have climbed more than 40% in inflation-adjusted terms over the past two decades. Now, a combined Union Pacific and Norfolk Southern behemoth would control the lion’s share of rail shipments and more than a third of all grain rail movements nationwide.

This merger would greatly accelerate the problems farmers are already facing. Based on 100-plus years of painful experience and broken promises, Nebraska and National Farmers Union’s grassroots member driven policy on additional railroad mergers states: “We oppose any merger between major railroad carriers.”

This bullying extends well beyond farmers and includes key industries such as manufacturing, energy, and many others who depend on rail. For these industries, there is no exit ramp. They can’t choose a competing rail line if rates go up and have little leverage to negotiate. They are left in a no-win situation that keeps tilting further against them, and Union Pacific just told them, openly, that opposing this deal will cost them even more.

That threat should change the political equation entirely for state policymakers. For example, in our home state of Nebraska, the legislature recently advanced taxpayer subsidies for Union Pacific, tied to their future investment in the state. But why should Nebraskans subsidize a company that is openly leveraging its market power to punish opposition and signal higher prices ahead?

Economic development is supposed to mean lower costs, broader opportunity, and stronger local industries. It is not supposed to mean handing public resources to a monopoly-in-the-making that has already told farmers and shippers what comes next if they speak up.

If Union Pacific believes this merger serves Nebraska’s interests, it should make that case without threats and without taxpayer backing. Nebraska’s leaders and leaders across the country should demand a straight answer: how does rewarding this kind of behavior serve the people of their state?

Americans are struggling with high prices. They deserve policies that promote affordability, not propping up bad deals that make things worse for America’s struggling farmers and small businesses.

By Mike Gage, President-Secretary/Treasurer, Nebraska State AFL-CIO and, John K. Hansen, President, Nebraska Farmers Union

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