Grain stoppage impacts area producers
by Phil Ambroziak
Farmers in the Northwest are expecting to soon feel the effects of Saskatchewan’s grain movement backlog.
Ashley Russell, who grows wheat, canola, barley and oats on his land east of Meadow Lake, said cash flows could be impacted as early as this spring if something isn’t done to move the overabundant crop and to allow producers to sell their grain for a reasonable profit.
“There was just so much wheat grown last year and the railways only have a certain capacity when it comes to moving it to the coast,” Russell said. “There is often delays for one reason or another, but I’ve never seen it this bad. The elevators have pulled their bids and it looks like we won’t be able to sell it until at least September. This is a big concern for a lot of farmers.”
As per tradition, the transportation of grain was being conducted by both CP Rail and CN Rail when the record amount of crop caused movement to start slowing down back in October. Farmers continued to bring crop to grain companies, however, as ships waited in port to receive the grain. Now farmers are forced to wait for payment as prices for grain slip because of the lack of movement.
“There are programs available to help producers financially,” Russell said. “Some guys may have lucked out and sold the grain right off the combine last fall at a price thought to be not very good at the time, but most of them likely hung on to it thinking prices would go back up. Right now, I’m waiting and it looks like at least one third of my wheat is going to be held over.”
Russell feels worried now for what will await him this fall.
“Even if next year’s crop is normal, by carrying this much over, it’s going to be the same situation all over again,” he noted. “We’ll have a whole new crop on top of what’s left unless we get a drought or something that could affect production. But, the main cause of all this is there just aren’t enough trains, or the rail companies feel they’re making enough money running other products. It’s frustrating.”
Dave Cubbon, a local agronomist, agreed with Russell’s outlook.
“The transportation system is what needs to perform,” Cubbon said. “We have the largest crop in western Canada’s history and we need to figure out a way to move it or this is going to happen again.”
Cubbon also said proper communication by all parties is an important factor in terms of reaching a solution.
“The unfortunate thing is the farmers have no one group leading them,” he said. “The grain companies have a vested interest, the railways have a vested interest – they make money by moving commodities and they don’t care which ones, but the farmers aren’t organized well enough to carry their cause forward.”
Cubbon went on to state there’s been a lot of finger-pointing going on and very little discussion on how to effectively address the matter. However, efforts to initiate just such a discussion were made recently by the provincial government. Last week, Premier Brad Wall appointed a group of MLAs to work on behalf of Saskatchewan producers to deal with the backlog.
“This grain movement backlog is a very serious situation for the entire province and it is a high priority for our government,” Wall said. “The delays in moving grain have led to lower prices for our producers at the farmgate and are harming our reputation as a reliable supplier of agriculture products throughout the world.”
The delegation was to meet with representatives of the major grain companies to discuss the challenges they are facing in moving grain and potential solutions. In addition, they were also expected to raise the issue of producer contracts, lower grain prices (as a result of the historically wide basis levels) and encourage all of the grain companies to pursue level of service contracts with the railways through the Federal Fair Rail Freight Service Act.
Meetings will also continue with the rail companies to discuss ongoing capacity issues and challenges. The delegation will urge the railways to implement short-term measures to clear up the current backlog of grain, including adding crews, cars and locomotive capacity as necessary. In addition, railways will also be encouraged to implement long-term plans for the future as it is anticipated large crops will become the new norm. This includes taking measures to ensure surge capacity and improved planning for weather challenges.