Say what you will about COVID-19, but one thing is clear: The pandemic hasn’t had a negative impact on grain movement in Western Canada, or on export sales programs of some Canadian crops.
Export shipments of major Canadian grains including milling wheat, durum, canola and pulses have been steady since the COVID-19 pandemic knocked the wind out of other sectors of the Canadian economy.
Domestically, a slowdown in other sectors has freed up available rail capacity for grain shippers, said Mark Hemmes, a grain handling and transportation systems analyst with Quorum Corp.
Global demand for many crops that are grown in Canada has also surged.
Concerns over food security have prompted foreign governments to stockpile domestic grain reserves.
Other countries have put export restrictions in place, limiting how much domestic grain can be sold into overseas markets.
In Canada, major grain-exporting companies have taken advantage of the evolving situation and have been selling grains and oilseeds briskly, with the help of a responsive western Canadian rail system.
“We’ve had an almost unlimited supply of rail cars and power,” said John Heimbecker, chief executive of Winnipeg-based grain exporter Parrish & Heimbecker.
“We’re shipping off the map.”
“We’ve been shipping grain like there’s no tomorrow,” added Sean Finn, executive vice-president of corporate services with Canadian National Railway.
Statistics from the Canadian Grain Commission suggest that Canadian grain exports through the first 45 weeks of the 2019-20 crop year are still slightly behind last year’s pace.
As of mid-June, exports of all Canadian grains were listed at nearly 37.5 million tonnes, compared with almost 39 million tonnes a year earlier.
But the pace of export grain shipments has been outstanding since rail blockades came down earlier this year, said Hemmes.
“The only bright spot in this whole COVID thing is for the grain industry because it (the pandemic) has freed up all sorts of rail capacity and the railways are just pounding grain out to the coast,” he said.
“We had a little blip there at the beginning, when everyone started getting their sales in order, but right now, there’ so much vessel capacity and so much rail capacity … they’re selling like crazy.
“We’re going to move a lot of stuff and if things continue as through the months of June and July, this will be another record year… from a volume perspective.”
Steady shipments of Canadian canola into European biofuel markets have exceeded earlier expectations.
Movements of milling wheat from Prairie locations have been strong in both directions and demand for Canadian durum from European and North African buyers has been buoyed by supply concerns.
That’s a stark contrast to conditions a few month ago, when rail blockades had slowed export shipments of all grains.
The about-face was a welcome development for the Canadian industry, which entered the crop year with all-time record supplies of 82.8 million tonnes.
“In Week 28, the way things were tracking… it was shaping up to be the worst year we’ve had in the past six years, and we were looking at a phenomenal carry forward stock,” Hemmes said.
“But everything lined up.”
For all crop types, year-to-date grain shipments through Vancouver for the 2019-20 crop year are now tracking six percent above average.
Canola exports through the first 45 weeks of the 2019-20 crop year are listed at nearly 8.6 million tonnes, up eight percent from the same period a year earlier.
Crop-year-to-date durum exports are up 16 percent, pea exports are up 28 percent and lentil exports are up 70 percent over last year — or 253 percent over 2017-18.
Canadian exports of corn (-87 percent), soy (-28 percent) and barley (-10 percent) are all down from year-ago levels.
Hemmes is now anticipating year-ending stocks of all Canadian grains to be in the range of 9.4 million tonnes, in line with 2018-19 ending stocks
“Things are going pretty well right now,” said Wade Sobkowich, executive director of the Western Grain Elevators Association.
Both of Canada’s biggest railway carriers — CN and Canadian Pacific Railway — have been supplying 90 to 100 percent of the grain cars requested each week and have been operating at that level since rail blockades were lifted nearly four months ago.
“We’ve moved an incredible amount of grain in that period of time and the demand has been relatively strong for grain in the spring period,” Sobkowich said.
Rail capacity available to grain shippers is typically higher in the spring and summer months than it is at other times of year, Sobkowich said.
Grain shippers will be watching Canada’s post-COVID economic recovery closely.
As the larger economy recovers and demand for rail freight services increases, it will be critically important from a grain shipping perspective, to ensure that adequate resources — including train crews and locomotive power — are deployed in a timely manner, Sobkowich said.