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By Alice McFarlane

Rail Blockade

Rail shipping disrupts canola

Feb 24, 2020 | 3:32 PM

Canola farmers are concerned that current rail shipping disruptions will have lasting impacts on Canada’s reputation.

Canadian Canola Growers Association (CCGA) Chair Bernie McClean, who farms near Glaslyn, said the delays are being felt all the way back to the farmgate.

“We rely heavily on export markets with approximately 90 per cent of our canola crop exported every year,” McClean said. “This crop year has been one of the worst on record and disruptions to our rail system are challenging our ability to respond to the needs of our export customers. We’re seeing ships lining up along the West Coast, unfulfilled rail car orders accumulating, and elevators in the Prairies beginning to reach capacity.”

McClean said the latest reports from the Grain Monitor and the Ag Transport Coalition show several worrisome trends.

“Over 50 grain vessels are waiting to be loaded off the West Coast. The average for this time of year is 25 vessels and the last time a backlog of this magnitude was seen was during the 2013-14 rail crisis. Demurrage charges will begin to mount,” he said.

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CCGA President and Chief Executive Officer Rick White said there are 60,000 rail car orders still outstanding which translates into 5.4 million tonnes of grain yet to be shipped.

“For canola, we’ve had a major market disturbance, an extremely difficult growing season, a rail strike, and now further disruptions are hampering our ability to ship to export position,” White said. “Country elevators are starting to get filled up so this is very, very serious. Even when the blockades come down, it causes havoc. In terms of fluidity of the system we’re damaging our reputation as a reliable seller of grains and oilseeds.”

The CN Rail strike in November caused problems for the transportation system. White said this situation is even worse.

“Farmers kind of took it on the chin with the labour strike. We’ve had some winter issues. We’ve had a few derailments and then these blockades go up. All these things have made it quite economically damaging to farmers’ bottom lines, because if they can’t move their grain we can’t get it sold and can’t be a reliable seller,” he said

Many farmers still have crop in the field and had hoped to get their grain shipped before this spring’s harvest. White said it was one less thing to worry about before seeding.

“They need to get their grain sold now that’s in their bins because there is still several million acres left out under snow and that has to go somewhere in the spring,” he said. “This situation is ongoing, and we understand that but at the same time it’s having an adverse effect now for farmers and will continue to for the next number of months.”

There is evidence that working space in Western Canadian grain elevators is tightening with some regions reaching near maximum capacity.

“Without adequate rail service, the grain handling system quickly backs up, elevators fill up and stop accepting grain into their facilities and, in turn, farmers lose the ability to sell their canola and generate the necessary cash flow to manage their farm operations,” White said.

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alice.mcfarlane@jpbg.ca

On Twitter: @AliceMcF