CNS Canada — Prairie farmers are struggling to generate cash flow for their operations due to the lack of rail cars that are available to pick up their grain.
“Spring is coming up, farmers need cash flow and we don’t get cash flow if your grain is sitting in a bin waiting for a train to show up,” said Todd Lewis, president of the Agricultural Producers Association of Saskatchewan.
According to the Ag Transport Coalition, Canadian National Railway (CN) delivered just 17 per cent of the rail cars that shippers ordered during the week of Feb. 12. CN and Canadian Pacific Railway together fulfilled 38 per cent of demand during the same week.
Many Saskatchewan producers have had disappointing rail service the whole crop season and have been forced to look for bridge financing to pay the bills, Lewis said.
In an emailed response, CN said it had the second highest volume of grain movement for the month of January on record. The company added it can move 4,000 cars of Canadian grain per week. Through this winter, CN said it was averaging 3,973; in February, its average was 3,016.
Grain Growers of Canada president Jeff Nielsen said he wants to see better mechanisms in place to hold the railways accountable.
The passing of Bill C-49, the Transportation Modernization Act, which would allow grain shippers to impose reciprocal penalties, would be a good start, he said.
“We haul the grain and get it into place and then the train doesn’t show up,” he said. “It backlogs the grain handler when they’re expecting to have a train on time so they can ship it out and meet their grain demands on the West Coast.”
The timing is especially poor because now is when producers need to start getting their inputs in place, Lewis said.
“Even if you can find a spot to sell it, you might not be able to deliver it for a number of weeks because of the lack of capacity of the railroads; elevators are full in the countryside,” he explained.
Many farmers forward contract their grain, he added, which means it has to be picked up in a timely fashion.
He expected the situation will improve by April or May, but points out that is when farmers are busy trying to get a crop into the ground.
“Winter time is the most efficient time to move it.”
- Dave Sims writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting.
