Dakota, Minnesota & Eastern, the largest regional rail operator in the country, has been attempting to break into the Powder River Basin (PRB) coal market, which is dominated by Burlington Northern Santa Fe
Canadian Pacific is not only eyeing the potential PRB coal-market expansion, but also Dakota's existing network. This will provide the firm with expanded access to bustling Midwestern agricultural and ethanol markets.
While the ethanol boom may not be a boon to the small-scale producers whose commodity spreads are getting squeezed, it's all gravy to the rail operators. It appears that large players like Archer Daniels Midland
And finally, as if we needed confirmation, the willingness of the railroads to pay handsomely for smaller railroad assets proves Warren Buffett's prescience. He's been buying BNSF, Union Pacific, and Norfolk Southern