Rail strike may further slow movement of huge West Canada crop
A possible strike at Canada's biggest railway is compounding a vexing problem in the second-biggest wheat exporting country - how to move the western crop belt's abundant harvest to port with a strained transportation system.
A dispute between Canadian National Railway Co and its railroad workers raises the possibility of a strike or lockout as early as Oct. 29. Talks are scheduled to resume on Oct. 21, with both the union and railway hopeful of avoiding a work stoppage.
"Whenever there's a labor disruption, it has a huge impact on us," said Wade Sobkowich, executive director of the Western Grain Elevator Association, which represents grain handlers such as Richardson International Limited, Viterra and Cargill Ltd. "All grain shippers are concerned that we won't have sufficient rail capacity to move this large crop when we need to move it."
Agriculture and Agri-Food Canada estimates total crop production in Western Canada at a record-high 67.3 million tonnes and transport infrastructure is already struggling. Canada exports about two-thirds of its wheat and more than half of its canola.
Some farmers, waiting for congested country elevators to clear space, have piled grain on the ground, potentially risking contamination, while others are filling plastic silo bags that snake hundreds of feet across fields.
Some bursting-at-the-seams grain handlers, meanwhile, have resorted to storing crops in temporary "bunkers" that resemble hockey rinks with boards along the sides, pipes to dry the grain and tarps protecting it from rain and snow.
Railways are filling about half of the grain car orders within the same week, a situation that isn't unprecedented during the harvest, but not ideal for moving crops quickly, Sobkowich said, adding that elevators are about 95 percent full.
A bottleneck in Western Canada's crop pipeline has already expanded the discount in the cash price grain handlers pay farmers versus the wheat futures price, according to crop marketer CWB. It may also prevent some export sales as handlers look to avoid penalties for late delivery, Sobkowich said.
Most of Canada's crop production comes from its western provinces, where farmers and grain handlers rely heavily on Canadian National and Canadian Pacific Railway to move crops into export position on the Great Lakes or West Coast.
Effectively moving the big harvest will require all parties along the supply chain to work together, not just railways, said Canadian National spokesman Mark Hallman.
CN expects to have a C$100-million ($97 million) upgrade to its capacity on the Winnipeg-Edmonton corridor in place by the end of November, Chief Operating Officer Jim Vena said in September.
- New calculator can help soybean farmers with seed decisions
- U.S., Brazil close to ending cotton trade rift
- U.S.-Japan trade talks hit new farm exports snag
- Ag markets posted a general comeback Wednesday
- Midwest grain growers ‘Invest an acre to feed the world’
- Ag markets turned mixed around midsession Wednesday
- Activists fighting Golden Rice even more in 2014
- U.S. GMO labeling foes triple spending in first half of this year
- Source shows half of GMO research is independent
- White House issues veto threat on bill to block WOTUS rule
- East-West Seed signs marketing collaboration with Monsanto
- How much corn can the ethanol industry use?