Last fall’s record-breaking crop continues to cause transportation headaches for western Canadian farmers.
Mark Dyck, director of logistics with CWB, said as much as seven million tonnes of wheat and durum produced in Western Canada will not make it to market this year because of supply chain constraints.
“Basically, we think that carry-out on all wheat is going to go up from five million tonnes to 12 million tonnes year over year,” Dyck said.
“In other words, there’s seven million tonnes of wheat and durum that we will not be able to export because the system … can’t (handle) it. I think the grain companies could sell it. It’s just that I don’t think we can get it through the system.”
CWB estimates that Canadian farmers grew 73 million tonnes of the six major crops plus peas and lentils in 2013-14, up from 53 million tonnes a year earlier.
That means demand for rail capacity among Canada’s agricultural shippers has never been higher in Western Canada.
Farmers have been critical of railway performance, but Mark Hemmes, president of Quorum Corp., said railway performance, at least in terms of grain car unloads on the West Coast, is roughly on par with last year.
Hemmes said grain volumes transported to west coast ports through the first 21 weeks of the 2013-14 crop year are actually up one percent from the same time last year.
However, total grain and oilseed exports are down three percent from the same time last year, largely because of a significant reduction in grain traffic through Thunder Bay.
“Right now, everybody wants to move grain through the West Coast,” said Hemmes, whose company serves as the prairie grain transportation monitor.
“Everybody is arbitraging freight, so it really puts the seaway route at a significant disadvantage,” he said.
“But on the West Coast, total car unloads are roughly where they were last year at this time.… Is that good or bad? I’m not going to say.”
Many farmers are pointing to poor railway performance, suggesting they are doing a poor job of spotting rail cars, especially at facilities on less efficient branch lines.
Dyck and Hemmes said railways are only one element. Efficiency at terminal facilities is also facing increased scrutiny.
Dyck said the industry needs to look at upgrading loading systems so grain can be loaded onto ocean vessels more efficiently.
He said the number of ships anchored on the West Coast waiting to be loaded with grain is unusually high.
Canadian National Railway spokesperson Mark Hallman said in an email that this year’s large crop and, more recently, extreme winter weather, has put pressure on all parts of the grain handling system.
“The challenge of moving the crop is not a rail car capacity issue,” he said.
“The issue is that western Canadian farmers have grown the biggest grain crop in history, and the supply chain, including country elevators, rail, and port terminals, cannot move a whole year’s crop in three months,” Hallman said.