Proposed Railroad Merger Has Agriculture All Railed Up
February 23, 2026 As the spring fertilizer application season kicks off in earnest, many ag retailers and their grower-customers have their eyes on how crop nutrients will be moving across the transportation chain from outlet to field. In 2026, however, a sizable number of marketplace observers are undoubtedly watching what happens across the entire transportation system for fertilizer. In particular, a proposed merger in the railroad industry is under scrutiny.
On July 29, 2025, Union Pacific Corp. and Norfolk Southern Corp. entered into an agreement to merge their two railroads in an $85 billion deal. With this consolidation of two of the largest railroad companies in the country, the new Union Pacific would create America’s first transcontinental railroad.
According to the companies, the merger would connect 10,000 existing lanes of interline service into more efficient single-line service, eliminating “car handoffs” between railroads. This would move freight more efficiently, they said, eliminating the need for an estimated 2,400 rail cars and container handlings, saving 60,000 car miles per day.
“As time and technology continue to transform how freight is delivered, our industry must keep pace and move forward, reaching underserved markets with new rail solutions and strengthening the U.S. supply chain,” said Union Pacific CEO Jim Vena, in a statement released at the time of the announced merger. “Customers deserve stronger, more connected freight rail, and our merger will make that happen.”
Norfolk Southern President and CEO Mark George released a similar statement. “This combination will bring together Union Pacific’s expansive Western reach and Norfolk Southern’s unparalleled access to Eastern manufacturing and population centers in an end-to-end combination,” said George. “It will create a cohesive freight rail solution with 50,000 route miles that connect 43 states and more than 100 ports.”
The Fertilizer Connection
However, despite all the positives spelled out by Union Pacific and Norfolk Southern regarding the proposed merger, many of the people that regularly utilize the two rail carriers for their businesses didn’t seem as convinced that this combination was a good thing. In particular, those in the fertilizer business were apprehensive about the deal.
“The fertilizer industry relies heavily on rail, and many shippers already operate with limited transportation options, increasing costs, and continued service challenges, all with a ‘take-it-or-leave-it’ approach from railroads,” said The Fertilizer Institute (TFI) President and CEO Corey Rosenbusch in a released statement. “Our priority is a rail system that provides reliable service and a balanced relationship between carriers and carload shippers, with accountability for systemic rail service failures and a rate review process that is efficient, timely, and economical. The potential for this merger makes needed rail policy reforms to reset the balance between railroads and carload shippers even more critical.”
According to TFI data, the importance of rail cars to the transportation of fertilizer cannot be understated. The association says that on average, more than 60% of fertilizer moves by rail year-round in the U.S. Most of the fertilizers transported by rail carriers in rail cars and rail tank cars come in three different forms: In a solid form called prills (for urea, ammonia nitrate, calcium nitrate, and potassium nitrate), in a liquid form (for urea ammonium nitrate, ammonium nitrate solution, ammonium polyphosphate solution, and aqua ammonia), and as a compressed gas (for such products as anhydrous ammonia). “A single rail car is equivalent to four or five truckloads,” said TFI.
In addition, much of the fertilizer that comes into the U.S. market for use is shipped via rail from Canada, which is a major supplier of such macronutrients such as potash. According to Canadian transportation experts, the country’s railroads ship an average of 69,000 tons of fertilizer per day.
Furthermore, fertilizer transport is a lucrative business for the rail carriers themselves. For example, according to its fourth quarter results for 2024, Union Pacific saw its profits increase 1% for that time frame. The company specifically cited the revenue generated by fertilizer transport for part of this gain.
Industry Concerns
Since the Union Pacific/Norfolk Southern agreement was announced, several groups have come out against the proposed merger. Perhaps most significantly, two unions representing railroad workers have opposed it.
This past December, The Brother-hood of Locomotive Engineers & Trainmen (BLET) and The Brotherhood of Maintenance of Way Employees, representing 53% of the unionized workforce at Union Pacific and Norfolk Southern, announced their opposition to the plan to merge the carriers.
“This debt-ridden tie-up won’t make rail more competitive with trucks as merger proponents claim,” said BLET National President Mark Wallace. “We believe this transcontinental railroad will make shipping by rail less attractive as the merged carrier passes off rail lines that serve small towns, factories, and farms to short line railroads while running miles-long slow-moving trains on the main line.”
Wallace added that it’s not just the rail workers unions that oppose the merger. He claimed that 40 chemical company CEOs have signed a letter saying the merger would limit freight transportation options. In addition, more than 60 trade associations and chambers of commerce have voiced their opposition to the merger.
One of these association voices was on display this past December. At the 2025 Agricultural Retailers Association (ARA) Annual Meeting and Conference, President and CEO Daren Coppock shared with attendees his views on the proposed Union Pacific/Norfolk Southern merger.
“Before I came to ARA, I was the CEO at the National Association of Wheat Growers,” said Coppock. “We had a rail representative come to us to explain [how] this merger they were proposing would provide so many savings to the rail companies that they, in turn, would pass those onto the shippers. I didn’t believe that line of BS then, and I don’t believe it now.
“From our standpoint, concentrated market power in the hands of fewer people for our products does not work out in favor of good business,” he continued. “Since two-thirds of our business products are moved by rail, this is a big deal for us.”
Coppock cited the drop in overall rail carriers over the past 40 years as evidence of this. In 1980, there were roughly 40 Class I railroads in the U.S. By the end of 2025, that had been reduced to only six. A Union Pacific/Norfolk Southern merger would bring this down to five.
Despite this opposition, Union Pacific and Norfolk Southern are proceeding with their merger plans. This past November, the companies announced that nearly 99% of their shareholders voted in favor of the merger. Approximately one month later, Union Pacific and Norfolk Southern formally applied for merger approval with the Surface Transportation Board (STB). If approved, the companies plan to spend the better part of 2026 fleshing out their formal merger, with the newly combined Union Pacific to begin operating as a single entity sometime in 2027.
Still, ARA’s Coppock remains skeptical.
“Farmers and ag retailers operate on razor-thin margins, so even a small, artificial cost increase can have a big impact,” he said. “When rail service is dominated by just a few players, they hold the power to set terms that work for them — not for the shippers and customers who depend on rail to move agricultural commodities, fertilizer, ag chemicals, fuel, and other essential supplies. That imbalance drives up costs and threatens the reliability of our entire supply chain.”
TFI’s Rosenbusch also released a statement directed at the STB.
“While we are still reviewing today’s STB filing, it is difficult to see how any coast-to-coast merger would improve this imbalance or meet the standard set out in the STB’s merger rules,” Rosenbusch said. “Today railroads hold all the cards, and larger railroads only give carriers a bigger deck. Now that Union Pacific and Norfolk Southern have submitted their merger application, we urge the Board to make the merger’s impact on carload shippers, including fertilizer and agriculture, a priority during the review process.”
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