A lot less western Canadian grain is being trucked over the U.S. border this year.
But the U.S. market still plays an important role in offering farmers better prices, says a southern Manitoba marketer and adviser.
“Elevators here don’t want to lose that handle,” said Brian Voth of Ste. Agathe, Man.
“They know if they don’t have a competitive bid guys have this option of going over the border.”
The North Dakota Wheat Commission believes that about one-third less Canadian grain has been trucked into the U.S. this crop year, at least until the end of January.
In 2014-15 about 760,000 tonnes had been trucked-in by the end of January, but this year it was probably slightly less than 500,000.
“Compared to last year they’re down quite a bit,” said Erica Olson of the NDWC.
During the 2013-14 grain transportation crisis in Western Canada many farmers and grain marketers tried to escape the plugged elevator system and low prices by hauling to elevators in the northern U.S.
However, the U.S. elevator system has emerged as more of an alternative or emergency outlet for western Canadian grain, rather than a preferred option.
Voth said there are headaches involved in hauling grain into the U.S., even though some elevators there are as close to prairie farmers as those in the Canadian system.
“The vast majority of guys are still going to bring their grain here, between the border and Winnipeg, and not look at those southern bids because they don’t want to do the paperwork to get across the border, and the grain companies know that,” said Voth.
But Voth estimates about 25 percent of farmers are willing to haul to the U.S. if Canadian bids get out of line and so Canadian elevators near the border have a strong incentive to keep their prices competitive.
That has kept more grain home this winter.
“Their bids (at U.S. elevators) just have not been as competitive relative to the buyers on the Canadian side,” said Voth.
“The prices up there have been fairly similar,” she said.
When the U.S. dollar soared compared to the Canadian dollar earlier in the winter there was a momentary price spike at U.S. elevators compared to Canadian ones, at least when the currencies were converted, Voth said.
However, that anomaly evened out quickly, before many farmers could take advantage of it.
“This winter it was a rarity to find a price on the south side of the border better than here,” said Voth.