CHICAGO, Sept 27 (Reuters) - Rail backlogs are

disrupting export trade between the United States and Mexico and

snarling agricultural supply chains as the fall harvest is under

way, agriculture groups said on Friday.

A potential East and Gulf Coast port strike that could begin

on Tuesday would exacerbate the problems, nearly 200 agriculture

groups said in a letter sent to the White House on Friday.

While Mexico is the top U.S. corn export market, it's also

been a key outlet this year for agricultural exporters looking

to compensate for sluggish buying from China, a top commodity

buyer.

Mexico's imports of U.S. agricultural products increased 27%

in the first seven months of 2024 over the prior year,

government data showed. But rail capacity cannot keep up with

the demand, said National Grain and Feed Association President

Mike Seyfert.

Union Pacific Corp ( UNP ) and Berkshire Hathaway ( BRK/A )-owned BNSF

Railway have stopped issuing permits for grain shuttle

trains to Mexico because of congestion and a growing backlog of

loaded trains, according to Union Pacific's ( UNP ) website and the U.S.

Department of Agriculture.

Ferromex, the Mexican railroad that interchanges with BNSF

and Union Pacific ( UNP ), also has embargoed permits for grain trains

at border crossings at Eagle Pass and El Paso, Texas, USDA said.

Union Pacific ( UNP ) said it is working to facilitate smoother

crossings and reduce congestion at the border. BNSF and Ferromex

could not be reached for comment.

The situation has left some grain sellers scrambling to find

new buyers for their crops and struggling to get empty rail cars

back from Mexico for shipments, Seyfert said.

"When you're trying to make space for what is predicted to

be a large corn crop and a large soy crop, the last thing you

need is to try to find new business if you can't deliver to your

customer," Seyfert said.