A lot has been said over the last few weeks about what information grain plans provide and their purpose. We feel it is important for readers to understand why grain plans are important. We also think it is important to demystify what the numbers represent.
Canadian National Railway’s annual grain plan has two main objectives. First, the plan sets out CN’s assessment of how much grain it expects to move over the course of 2022-23. There is only so much grain to potentially move, and the goings-on in the market, including the commercial decisions that buyers and sellers make about participating in grain markets, will have a large say in what volume ends up moving.
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CN can move up to 36 million tonnes of grain and processed grain products via rail car, and even more when adding the movement of grain by container, with the right conditions in place. However, given historical trends and projected available supplies, movement of western Canadian grain on CN in 2022-23 is only forecast to reach 24.5 to 27 million tonnes.
So, CN has the capacity to move more. If the crop gets bigger and more grain needs to move and if each part of the supply chain works as intended, then the final tally will reflect that. If sellers decide to carry more grain over into next fall, then the total amount of grain shipped will shrink.
The grain plan also asks CN to outline its ability to move that anticipated volume of grain during the crop year, including guidance on how much grain CN can move every week, often called the weekly maximum end-to-end sustainable supply chain capacity. The crop can’t move all at once. Hitting that weekly maximum requires a supply chain working on all cylinders. If there is limited demand for grain movement like there is right now, or if the main line to Vancouver is out for a week or two, those maximum levels will not be reached.
The record amount of grain moved by any railroad was set by CN in 2020-21 with 29.8 million tonnes when crop production hit record levels. That year, CN had only anticipated 26 to 28 million tonnes of grain movement. There is always room to move more grain over the entire course of the crop year.
Grain plans are critical in helping plan appropriate resource levels for railroads and grain companies so long as their objective remains to move the maximum amount of grain over the course of the crop year.
David Przednowek is Canadian National Railway’s assistant vice-president of grain.
