Farmrail's 2025: A new contracting division already in house and a new short line on the way 

By Jeff Stagl, Managing Editor 

It’s only two months into 2025, but it’s already turning out to be a big year for Farmrail System Inc. The company launched a railroad contracting division in January and is poised to start up a third railroad subsidiary in April. 

Farmrail currently owns and manages Farmrail Corp., a lessee-operator for the Oklahoma Department of Transportation (ODOT) that operates an 82-mile line between Weatherford and Erick, and 89 miles of track between Westhom and Elmer in the state; and Grainbelt Corp., which operates 178 miles of track between Enid and Frederick, Oklahoma. The company also retains a joint-venture interest in Finger Lakes Railway Corp. in New York.   

If the Federal Railroad Administration (FRA) and Surface Transportation Board (STB) approve its lease agreement with ODOT and the Blackwell Industrial Authority (BIA), Farmrail soon will be managing Land Rush Rail Corp. (LRRC), its third short line. 

Late last year, Farmrail agreed to lease terms regarding a 37-mile line spanning portions of both Kansas and Oklahoma that’s been closed since February 2024 following an emergency order issued by the FRA due to safety concerns. The track is owned by the BIA and ODOT, with BIA owning the section between the Kansas/Oklahoma border and Wellington, Kansas, and ODOT retaining the section between the border and Blackwell, Oklahoma. 

To launch in April, Land Rush Rail Corp. will operate a 37-mile line spanning portions of Kansas and Oklahoma (shown in this map). Farmrail System Inc.

Farmrail will create LRRC to operate the line, which features a BNSF Railway Co. Interchange in Wellington. The short line will launch operations on April 2 if the STB approves the change in railroad operators and the FRA deems the track to be in operable condition, says Farmrail President and General Manager R. Eric Betke. If LRRC doesn’t start up on that date, a launch is anticipated soon afterward. 

Farmrail chose the name Land Rush Rail to honor the efforts of pioneers who pushed west from Kansas in the 1800s, says Betke. Now, Farmrail aims to push its operating boundary beyond Oklahoma. 

But there was a time last year when it didn’t seem plausible for the company to enter into a lease agreement for the line. After the FRA issued its order and ODOT severed its lease agreement with former line operator Blackwell Northern Gateway Railroad, Oklahoma transportation leaders sought a new operator. 

In midsummer, Farmrail officials were interested and performed due diligence by inspecting track conditions along the line. They weren’t impressed by what they found, including cross-level issues, which would have been costly to rectify. So, they declined to pursue a lease agreement. 

“We have a good relationship with ODOT. [But] the track had received no attention for a long time, and it shows,” says Betke. “We saw opportunities to grow traffic on the line, there’s the potential to triple it. But it was cost prohibitive.” 

The end result was disheartening for several reasons. On the plus side, the line’s location is attractive, there is a highly available workforce in the region and the local industrial authority is robust, says Betke. In addition, the Blackwell Industrial Park is located near the line. 

“Shippers [along the line] have been on the bench waiting for good and consistent rail service,” says Betke. “One company is planning an expansion to get into 24/7 production and another company is aiming to turn more traffic.” 

The new Farmrail Railroad Contractors division will perform maintenance-of-way work for Farmrail in Oklahoma, and for other railroads and customers in the greater region. Farmrail System Inc.

Luckily, Farmrail encountered a second — and more enticing — opportunity to become the line’s operator. In late fall, ODOT officials approached the company again with a compelling offer after terminating what turned out to be a very short-term lease arrangement. State officials again sought a reputable and experienced operator to resume safe operations along the line. 

“They said we can handle the operations and the state will take care of the track. That was the impediment before — the barrier was taking care of the track, which was a bigger nut than we wanted to crack,” says Betke. 

Now, efforts are underway to improve the track to the point the FRA can approve the line’s condition prior to resuming operations. Farmrail officials envision LRRC as a two-day-a-week operation. 

“We can satisfy shippers’ needs in two days. The idea is LRRC will be a self-sustaining operation,” says Betke. 

There was another idea hatched late last year at Farmrail while the line lease agreement was in play: creating a new railroad contracting division. Farmrail had used Cross Line Contractors LLC, which was based in Oklahoma City, many times for trackwork and other projects over the years.  

After Cross Line dissolved its partnership last year, Farmrail for a time considered taking over the business, but opted instead to create its own railroad contracting arm. 

So, Farmrail Railroad Contractors (FRC) was born in January. FRC currently has eight crew members, but its workforce soon will grow to 10, says Betke. 

The separate division is targeting a niche market, he says. FRC aims to perform maintenance-of-way work for other railroads and customers in the greater region, perhaps in such nearby states as Colorado, New Mexico and Texas. 

“Other short lines have engaged us to take on projects that are a natural fit for us,” says Betke. 

FRC also will complete trackwork and other projects for Farmrail. In summer — when temperatures reach the 100s in Oklahoma — FRC crews will go to New York to perform work in the Finger Lakes area, says Betke. 

“They will be working more comfortably in the 80s there,” he says.