Montana barley growers won't be hit with December rail rate increase after all, farm groups and railroad officials said Friday.

BNSF Railway Co. had told barley producers that shipping rates on 26- and 52-car trains would be the same as single-car rates, effective Dec. 1. The reinstatement of earlier rates will save shippers $50 on 26-car shipments over single-car rates. Shippers will save between $75 and $150 per car on 52-car shipments, depending on the destination.

"This decision was based on discussion with representatives from several Montana farm groups and an understanding of the markets," said Gus Melonas, a BNSF spokesman in Seattle.

In late September the railroad announced a similar rate reduction for wheat shipped on 52-car trains.

The rate concessions for the 26 and 52-car trains could help ease concerns among producers about the added cost and inconvenience of hauling grain to larger 110-car shuttle loading facilities. Some producers feared rate differences could eventually force the elimination of smaller grain elevator operations. Shipping from a shuttle loading facility still costs about $200 per car less than at smaller facilities.

Farm groups welcomed the barley news.

"We have a long way to go on freight rate issues, but these rate spreads will help as we continue to develop barley markets," said Dan Kidd, a Big Sandy-area farmer.

Officials from the Montana Grain Growers and Montana Farmers Union said the lower rates could help boost barley production, especially as some acreage currently in the Conservation Reserve Program returns to production in coming years.

"Our barley growers need the additional competitiveness these rates offer," said Dave McClure, president of the Montana Farm Bureau Federation.

Shipping rates and a shortage of rail cars were key gripes at a recent meeting in Big Sandy, where farmers joined Gov. Brian Schweitzer to discuss issues with an official from the federal Surface Transportation Board.

This week, BNSF said it is committed to providing good service in agricultural states such as Montana. BNSF controls more than 90 percent of the rail system in the state.

Melonas said BNSF has added 3,000 rail cars to its system in the past year, in part to help grain shippers. The railroad also added 285 locomotives systemwide and will spend $54 million on rail improvements in Montana in 2005, he added.

"All of this leads to better service and BNSF is continuing to improve car cycle time and will continue to invest further into this important market," Melonas said.