South Dakota just pulled the plug on another piece of its railroad past. The State Rail Board terminated Dakota Southern Railway‘s lease of the Platte Line in July 2025, seventeen months ahead of schedule. The reason? Missed payments. The operator owed $179,134 on a lease payment due May 1, 2025, and apparently couldn’t cough it up.
The State Rail Board terminated Dakota Southern Railway’s Platte Line lease seventeen months early after the operator missed a $179,134 payment.
This isn’t some shiny new rail project falling apart. We’re talking about the 80.8-mile Milwaukee Road line, a relic from the 1870s when trains were literally the only way farmers could get anything to market. The route between Kadoka and Mitchell, including the Napa Junction to Platte segment, once served rural South Dakota communities that depended entirely on rail shipping for survival.
By 1980, over 60% of the state’s rail network had vanished. Trucks and highways killed the branch lines—more economical, more flexible, and frankly, the Milwaukee Road couldn’t compete. The state actually bought this line to prevent total abandonment back in the 1980s, establishing the South Dakota Railway Authority in 1980 to save what infrastructure it could. Governor Bill Janklow orchestrated the track purchase as part of this preservation effort.
Here’s where it gets messy. The state tried leasing to private operators, hoping someone could make these routes work. Sometimes it did. Often it didn’t. The Platte Line bounced between periods of service and inactivity like a bad relationship. Parts of it were railbanked in June 2020, with 33 miles between Tyndall and Ravinia fundamentally mothballed. Rails and ties were slated for salvage.
Small towns suffered when rail service disappeared. Studies documented measurable economic decline in communities post-abandonment. Grain elevators closed. Suppliers left. Farmers paid more to truck their crops. Larger communities adapted better, but rural areas? They got hammered. Rail lines had been crucial for survival of early South Dakota towns, with 285 new communities platted during the late 1800s.
Now Dakota Southern is out, and South Dakota is stuck holding an 80.8-mile line nobody apparently wants to operate profitably. The state spent decades trying to preserve rail infrastructure through ownership and coordination with private businesses. That said, the Milwaukee Road line is up for grabs again, a monument to what appears to be the motor carrier industry’s complete victory over branch line railroads.
