Grain exports get off to slow start

According to the Grain Monitoring Program’s latest weekly performance report dated Sept.7, west coast exports of Canadian grain through Vancouver and Prince Rupert, B.C., during the first four weeks of the 2021-22 crop year were 47 percent behind last year’s pace and 32 percent below the previous three-year average. | File photo

Producer deliveries and export shipments of western Canadian grain are off to a relatively slow start in the 2021-22 crop year, according to data from the federal Grain Monitoring Program.

According to GMP’s latest weekly performance report dated Sept. 7, west coast exports of Canadian grain through Vancouver and Prince Rupert, B.C., during the first four weeks of the 2021-22 crop year were 47 percent behind last year’s pace and 32 percent below the previous three-year average.

The slow start is in spite of a relatively early start to this year’s harvest in Western Canada, strong global demand, and historically high prices for most agricultural commodities.

Crop-year-to-date grain exports at the Port of Vancouver through Crop Week 4 were listed at less than 1.4 million tonnes, compared to nearly 2.2 million tonnes during a similar period last year.

Vancouver’s three-year average is more than 1.8 million tonnes.

Year-to-date grain shipments are also well behind last year’s pace in Thunder Bay, Ont., and Prince Rupert, the GMP data shows.

Through Week 4, the amount of outbound grain shipped through Thunder Bay terminals was listed at 437,000 tonnes, compared to 756,000 tonnes last year and an average of 590,000 tonnes over the previous three years.

Prince Rupert and Churchill, Man., had yet to ship a single vessel of grain through the first four weeks of the new crop year.

Grain car unloads at west coast terminals were also 49 percent off last year’s pace and 34 percent lower than the three-year average.

Last month, Canadian National Railway and Canadian Pacific Railway both said they expected to move smaller-than-normal volumes of western grain in the 2021-22 crop year.

“There’s a lot of uncertainty as to what the final outcome of the crop is going to be, given the hot, dry conditions that Western Canada (has been) experiencing,” CN director of sales and marketing David Przednowek said in early August.

“We expect that grain movement, obviously, will be below the three-year average.”

Joan Hardy, vice-president of sales and marketing for grain and fertilizer at CP, said the company expects the 2021-22 prairie crop volume will be smaller than the past two years.

On Aug. 30, Statistics Canada released an updated production outlook that pegged the total western Canadian harvest in the range of 52 million tonnes, down from more than 77 million tonnes last year.

Total production of grains and oilseeds in Western Canada is expected to be at its lowest level since 2014.

Wade Sobkowich, executive director of the Western Grain Elevators Association, said the grain supply chain’s sluggish start this year can be attributed to several factors including low harvest volumes and uncertainties surrounding contract fulfilment.

Producer deliveries and export volumes are expected to increase significantly in the coming weeks, he added.

“If it’s slow, it’s only slow by a few weeks here,” Sobkowich said.

“We expect to have more rail car orders next week and more… the week after that, so it’s just starting to ramp up.”

Sobkowich said western farmers are still busy with harvest and are taking stock of how much grain they will have, a factor that is likely impacting the early pace of deliveries.

Many growers are still having discussions with grain buyers about how to deal with forward delivery contracts that are unlikely to be filled due to poor yields, he added.

“They’re also having discussions, in some cases, about fulfilling those delivery contracts — whether they can or whether they can’t — so that’s given everyone a bit of a pause to try and work things out before deliveries are made.”

As well, farmers with uncontracted grain may hold onto it, waiting for higher cash prices later.

“We have lower (harvest) volumes than what we’ve seen in the past eight years,” Sobkowich said.

“We’re talking about a crop size … (according to Statistics Canada) of about 52 million tonnes in Western Canada this year, versus 78 or 79 or whatever the number was last year,” he added.

“That’s a significant reduction in the amount of product available for grain companies to sell.”

Grain companies are also dealing with unexpected logistical issues and reassessing transportation requirements.

Rising ocean freight rates and vessel demurrage costs are causing further problems.

“All options are being considered now in terms of sourcing the product,” Sobkowich said.

“They (elevator companies) are going to try to source as much of that grain as possible to satisfy those contracts that they need to execute on for the fall period and the early winter.

“We have enough grain (in Western Canada) to fulfill the sales contracts that have been forward sold in to that period …. It’s just a matter of where it comes from.”

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