Labour disruptions have threatened grain movement many times in the past. The difference this time is that a speedy resolution seems unlikely. With the cloud being cast over fall grain deliveries, producers will want to assess their cash flow needs.
Rail movement was already slowing as the Aug. 22 strike/lockout deadline approached. Some grain buyers will move to a “no bid” posting. Others will drop prices to discourage sales and deliveries.
It will take many weeks and perhaps months to get the system running efficiently again once the disruption ends. Many producers count on harvest grain sales to pay expenses. Those are now in doubt.
Read Also
Proactive approach best bet with looming catastrophes
The Pan-Canadian Action Plan on African swine fever has been developed to avoid the worst case scenario — a total loss ofmarket access.
Grain movement could be curtailed for an extended period, and even if you can make sales, you may not like the discounted price. Prices were already showing significant softening and this will certainly add to the pressure.
Here are a couple of personal examples of how cash flow planning can be thrown in disarray.
In the fall of 2022, I contracted brown mustard for the 2023 growing season. The price was 74 cents a pound for the first 500 pounds an acre. I didn’t capture the best contract prices. They rose even further, but it’s still a good price.
The contracted price was slightly higher because the buyer had the full 2023-24 growing season to take delivery. Well, July 31 came and went and the bins were still sitting with production from 2023.
The buyer kept saying he’d take it by the end of the crop year, but it never happened, and there’s no indication when movement will occur. The price of brown mustard is now in the 30 cent a pound range, so a significant amount of money is riding on whether this contract can eventually be filled.
I do cut the buyer a bit of slack because sales of hybrid mustard have become more difficult. Even though a hybrid variety has been grown and sold for a number of years, some of the major Dijon mustard makers in Europe decided the hybrid variety has some quality differences, and they have returned to the old variety that’s been the mainstay for decades.
It would sure have been nice to have that anticipated cash, particularly with the equipment breakdown we’ve suffered. The hydraulic pump driver on the combine header stopped working in the midst of harvesting lentils.
It’s described as a medium duty Eaton pump in the parts book. We’ll just order another one, we thought. Turns out this pump is no longer available. The header manufacturer has been unable to access the critical part for some time.
The header is a 2009 model so it certainly isn’t new, but many farms run headers of similar or even older vintage. Our second, standby combine has the same brand of header, but a much simpler design from the late 1990s.
As this is being written, I’m hoping a repair kit can be found to fix the hydraulic pump. Failing that, the options for acquiring a functioning header carry a hefty price tag.
The aforementioned old secondary combine is now the primary hope for harvest progress, but an unexpected bill for header replacement could be looming.
It would be nice to have the money from last year’s mustard. It would also be good if crop sales for this year weren’t approaching a state of limbo due to a rail service stoppage.
Kevin Hursh is an agricultural journalist, consultant and farmer. He can be reached by e-mail at kevin@hursh.ca.
