Churchill could have a future as a grain-exporting port, but only if it is owned and operated by a grain company that owns a prairie elevator.
Any other owner for the terminal will be permanently crippled. It will struggle to entice grain cars to roll down one of the most challenging rail lines on earth to a port that’s open only three or four months a year and points in the wrong direction.
That seems obvious to me and is obvious to most players in the Canadian and world grain trades. The only way to make the grain terminal at sub-arctic Churchill work is to find somebody who wants to export grain through it.
That somebody also needs to own grain-loading facilities and make their own overseas sales. Otherwise, nobody who owns grain will have any interest in sending it north.
So the challenge to governments, northern Manitoba groups and those farm organizations that care about Churchill is this: find that somebody.
It won’t be easy.
The big elevator company operators already have enormous capacity at Vancouver, Thunder Bay and Prince Rupert. They have shown little interest in owning facilities far north that can’t export year round.
In fact, Richardson International has just doubled its terminal storage capacity at Vancouver, at a cost of $140 million. That’s something all farmers should celebrate. The stronger the pull at Vancouver, the more grain should be pouring off the Prairies to high-paying Asian buyers.
Big players like Richardson can ship millions of tonnes of grain out of Vancouver and its other facilities. Why would they want to operate a small, old facility that points toward Europe and Africa, not Asia?
If farmers want to see Churchill survive as a grain port, they’d better help find somebody who could benefit from owning the terminal there.
It has to be somebody who owns grain collection facilities on the Prairies, because grain companies want to make money from buying grain in the country and from loading it out at port. Owning the Churchill terminal, the rail line and Prairie elevators in the collection area might make sense to somebody with specialized marketing needs.
Who could that be? How about a special crops exporter, whose markets are in Europe, the Mediterranean and Middle East?
Perhaps a durum exporter focused on North Africa could make it work for them. Maybe a combination of the two could produce some sort of viable role as a grain-exporting outlet.
The good news for farmers is that they don’t need to have Churchill.
In a year like 2013-14, it managed to handle about 600,000 tonnes, but that’s only one-tenth the present capacity of Richardson’s Vancouver facility alone.
In terms of a prairie crop of 70 million tonnes or more, it’s not a big deal.
It has been nice having Churchill as an exporting option, as a hedge against farmers’ reliance on vulnerable rail lines flowing east and west, but it isn’t a necessity.
It only makes sense for somebody who has a vested interest in collecting prairie grain, shipping it down those wobbly tracks and loading it out of frosty Churchill.
If you care about keeping Churchill a grain port, find that somebody.