Producers waiting for grain to be shipped
Agriculture: Elevators 90 to 95 per cent full according to spokesman
Wednesday, Feb 05, 2014 06:00 am
Some farmers are wondering how they will finance their upcoming seeding as grain from a near bumper harvest continues to sit in bins and elevators waiting to be shipped to ports.
“I was a little slow getting my wheat contracted, so all the wheat we harvested is still on the farm,” said Mazeppa area farmer Jim Goodwin said. “The grain companies are telling me I won’t be able get it hauled until September.
“If that’s the case, there will be grain coming off the combine at that time, too. There will be glut of grain waiting to get in the elevator at that point as well.”
The result is Goodwin has to juggle his books when he seeds this spring.
“It is going to be pretty tight for us to pay the bills to get our crop seeded,” Goodwin said. “I will have to do some interesting financing to get the crop in the ground.”
Goodwin said the issue is the high grain yields from the 2013 harvest across western Canada coupled with the lack of freight cars available to ship grain to ports in Vancouver.
“I think one kind of begets the other,” Goodwin said. “The story we get is there is such a glut on the world and Canadian markets they can’t get rid of all the grain there is. What they can get rid of, is slow getting to the coast… You hear rumours that so many (train) engines are pulling cars with oil that there isn’t enough engines to haul grain cars.
“I think railways are doing their best, but there just is a lot of grain out there.”
Kevin Hrysak, spokesman for CP Rail, said grain is and will continue to be a high priority.
“Grain is Canadian Pacific’s single largest commodity and therefore very important to our railway and we are responding to our grain customers as efficiently and as quickly as possible,” Hrysak said. “The 2013-2014 crop year is at record demands and the result has been that CP has moved more grain in its history in response.”
He said CP is ready to work with the federal government and stakeholders in studying the supply-chain system in Canada.
He does not believe the moving of oil by rail has compromised the shipping of grain.
“CP has a responsibility to all of its customers in every line of business and this includes grain shippers,” Hrysak said. “With grain being very important, the result has been our railway is transporting all the grain the supply chain can handle at this time and we continue to work with shippers to have the resources in place to address this record crop year.”
Wade Sobkowich of the Western Grain Elevator Association in Winnipeg, agreed the large crop is an issue, but added the railways aren’t supplying the necessary cars to get the grain to port.
“We don’t have the railways providing surge capacity to meet that increased supply of product,” he said. “We have a huge crop, but we have the railways providing the same level of service they have in the past.”
Sobkowich puts much of the blame on the railways.
“It has to do with monopolies — if you are an elevator in the middle of Saskatchewan, you have no choice but to move your grain out on the railway that is servicing you,” he said.
He said as a result the railways have no incentive to increase surge capacity.
“They don’t have any incentive to put more locomotives out there, more crews out there, more railcars out there, because they know you will move the grain eventually,” Sobkowich said. “We can put sales on the books, and try to plan logistics to move that grain, but if the railways aren’t prepared to invest in surge capacity, we’re dead in the water.”
He believes the shipping of oil by rail has been at the expense of grain producers.
“I believe that is part of the problem,” he said. “They have shifted capacity to the oil and gas industry and that is capacity we could have used in the grain industry.”
He said at present, grain elevators across western Canada are nearly full.
“They are between 90 to 95 per cent full, which means they can’t really bring in farmers’ grain in a material way until they get relief,” Sobkowich said. “At the rate we are bringing farmers grain in, there is going to be a lot of farmers with a lot of grain left over on farm.”
Little Bow MLA Ian Donovan, the agriculture critic for the Wildrose Party, said he believes the back-up is a result of the large crop of 2013.
“Grain just isn’t moving, there are a lot of farmers who just can’t get it shipped,” said Donovan who represents the Goodwin’s Mazeppa area. “I have been in contact with CP Rail and they tell me they have a 15 per cent higher shipment over the five year average.
“They are dealing with just a large crop… We are trying to get the grain moving.”
He said the Wildrose is asking for financial institutes to be more accommodating to producers who haven’t been able to ship their product.”
He added the concern that too much oil and gas is being moved by rail is another reason to push for more pipelines so oil is not plugging up the railway network.