(NAFB) – A recent bidding war between Canada’s two major railroad has gotten the attention of the Soybean Transportation Coalition.

On March 22nd, Canadian Pacific Railroad announced a $25 billion deal to acquire the Kansas City Southern. Shortly thereafter, competitor Canadian National Railroad filed an unsolicited $30 billion bid to acquire the U.S. railroad.

On May 13, Kansas City Southern declared the CN proposal superior to the CP proposal and CP refuses to increase its bid.

If KCS were to merge with either railroad, it would form a single line haul linking Mexico to the United States and Canada. Mike Steenhoek with the Soy Transportation Coalition breaks down what this Y shaped network would look like if CN were to acquire KCS.

Steenhoek says if a merger between CP and KCS were to occur it would be comparable to what the CN railroad looks like now.

Soy demand outstrips Mexico’s domestic supply, and they rely on the United States for about 94 percent of whole soybeans. According to the U.S. Soybean Export Council, Mexico is the second largest soybean and whole soybean market for the U.S.

Roughly 55 to 60 percent of whole soybeans and almost 100 percent of soybean derivatives are shipped via rail to Mexico.

Steenhoek says the agriculture sector is expressing concerns on a merger but are reserving judgment at this moment.

Steenhoek says that it could be mid-summer before a decision is made.