The 2015-16 crop year appears to be off to a smooth start, at least when it comes to grain transportation.
Grain deliveries to country elevators and export terminals are flowing smoothly, according to industry sources that monitor grain transportation.
Vessels lineups at Vancouver decreased in late August and empty car order fulfillment by Canada’s major railways continues to meet demand to western ports, according to the Grain Monitoring Program.
“So far this crop year, everything is moving really well and they’re keeping a pretty good, low inventory of product out at the coast,” said Quorum Corp president Mark Hemmes, whose company runs the program.
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“Right now, we don’t see any signs that it’s going to be a difficult year.”
In its weekly performance summary dated Sept. 1, the monitoring program said space at country elevators is good, producer deliveries have been steady and available space at west coast terminals is in a comfortable range.
“Deliveries in the country so far have been actually really good,” Hemmes said.
“We’re anywhere between 800,000 and 900,000 per week and grain companies, for the most part, are all getting the cars that they need. There have been some hiccups here and there but so far, so good.”
By all accounts, western Canadian farmers will be harvesting an average- sized crop this year.
That, combined with a significant year-over-year reduction in carryout stocks, is expected to translate into more moderate but still steady demand for rail shipping capacity.
In its most recent Stocks of Prinicipal Field Crops report, Statistics Canada estimated year-end carryout stocks of wheat, canola, barley, peas and oats at 11.7 million tonnes as of July 31, compared to 16.6 million tonnes 12 months earlier.
Wheat carryout, including durum, was estimated at 7.1 million tonnes, down 32 percent from 10.4 million tonnes at the start of the 2014-15 crop year.
Canola carryout was pegged at 2.3 million tonnes, an estimate that some observers suggested is too high.
The Statistics Canada numbers include grain in storage on farms and in the commercial grain handling system.
Shipping demand from the coal, fertilizer and crude oil industries is also down, meaning additional capacity should be available for other commodities, including grain.
Although the size of this year’s harvest is within the normal range, its geographic distribution could affect shipping patterns and car cycle times, Hemmes said.
Many growers in Manitoba and Saskatchewan are anticipating above average yields, while growers in Alberta are expecting a small drought-impaired harvest.
From a shipping perspective, it means more grain that is shipped to Vancouver en route to Asian markets is likely to be sourced from the eastern Prairies.
“For west coast movements, there’s probably going to be a longer length of haul,” said Hemmes.
“That’s one of the things that we’re going to be watching closely is to see how this distribution pattern will impact shipping.”
In its most recent weekly report, the Ag Transport Coalition, which includes most western Canadian grain shippers, said Canada’s two major railway companies supplied on time more than 85 percent of ordered hopper cars.
Total shipper demand for empty rail cars during Week 1 of the 2015-16 shipping season was listed at 6,963 cars, compared to 5,944 delivered.
Origin dwell time, which is the amount of time that loaded cars wait on a shipper’s siding to be moved, were listed at 24 hours for unit trains located on Canadian National Railway sidings and 44 hours on Canadian Pacific Railway sidings.
“For bulk grain shippers that load unit trains and multi-car blocks, dwell times are generally expected to be 24 hours or less,” the ATC report said.
That’s because shippers must load cars within a 24-hour window to avoid origin demurrage charges assessed by the railways, the coalition report said.
Wade Sobkowich, executive director of the Western Grain Elevators Association, said railways performance has improved in recent months but timeliness of car supply continues to be a nagging issue.
“Overall, the ability of railways to provide car supply in a timely way needs improvement,” he said.
Contact brian.cross@producer.com
