In the last few years, strikes, landslides and clogged rail lines made it difficult and occasionally impossible to ship wheat to ports on Canada’s west coast.
But this year wheat is moving to port swiftly and easily, thanks primarily to a slowdown in rail traffic, said Mark Thibeault, the Canadian Wheat Board’s senior manager of supply optimization.
“The big change with the rail is that they are moving a lot less intermodal, a lot less automotive supplies and a lot less lumber. Everything is down,” said Thibeault.
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The availability of rail capacity this year, due to the economic slowdown, came at an opportune time for the CWB, he said.
“It’s a double relief in a way…. In other years we struggled with rail capacity (when) we had an average size crop to move. This year we have such a large crop and it’s fortunate to be getting this capacity.”
The increase in railway resources for grain shipments has, in turn, meant that the large crop is moving out of Canadian ports at a near record pace.
Statistics Canada says farmers produced 23 million tonnes of wheat in the 2008-09 crop year, up substantially from 16.4 million tonnes in 2007-08.
In February, 1.024 million tonnes of wheat cleared port in Vancouver and Prince Rupert, according to CWB statistics.
That amount is up significantly from 778,000 tonnes, the 10-year average for the west coast in February.
Rail shipments to eastern ports are also the largest in a decade and the CWB predicts that the rapid pace of wheat exports will continue during the spring.
“For March, we are expecting total exports of almost 1.3 million (tonnes) and about 1.2 million (tonnes) for April,” said CWB spokesperson Maureen Fitzhenry, in an e-mail to The Western Producer.
The large volume of exports prompted the CWB to issue an alert on its website asking producers to deliver No. 1 and No. 2 CWRS, along with No. 1 CWAD, to elevators this spring.
“We recognize that the spring is a difficult time to deliver, and that many producers are affected by road bans. However, where it is possible to deliver in March, April and May, we encourage you to do so.”
By the end of this crop year, Thibeault said wheat exports should be significantly higher than the last several years.
“In excess of 13 million tonnes of wheat exports for 08-09. The five year average, previous to that, is just over 11 million (tonnes),” he said.
Agriculture Canada predicts wheat exports will be even higher this year, at 14.3 million tonnes, thanks in part to much higher demand from Iran.
“Iran is the largest destination for Canadian wheat exports (this year),” said Stan Skrypetz, wheat market analyst for Agriculture Canada.
The latest figures from the Canadian Grain Commission show Iran imported 1.2 million tonnes of Canadian wheat from August till the end of January.
In stark comparison, Iran bought no wheat from Canada during the same period in 2007-08.
A drought hammered Iran’s wheat crop last year, Skrypetz said, reducing production to 10 million tonnes, down from a more typical figure of 14-15 million tonnes.
Weekly CGC data to March 15 shows wheat exports so far this crop year at 7.97 million tonnes, up almost nine percent from 7.32 million exported last year at the same point. The strong export pace in winter and spring is making up for a slow start to the export year.
“Coming into this crop year we were at record low inventories for wheat,” said Thibeault. “So we had to wait for new crop … before we could ramp up our export program.”
