THUNDER BAY, ON ---- March 22, 2014 ---- It has been a while since I have been stopped at a rail crossing waiting for a 100 car unit grain train to pass. In a late night drive on Sunday I went by some of the Thunder Bay elevators to discover the lights on at most, but not too many vehicles parked in the employee lots, and even fewer grain cars in the unloading facilities. The exception was at Canada Malting.
Pictured left is a typical modern prairie grain terminal. Each one of these replaces a number of the traditional village based wood construction grain elevators that had become the hallmark of so many western towns. Instead of a short haul to the local elevator farmers now have upwards of 60 miles or more in some cases to get their crop from the field to the elevator. Because of this and the time it takes to make a round trip to the elevator during harvest, farmers have been investing in grain bins to increase their storage capacity on the farm. In that way they can spend their time harvesting when the weather is good, and the grain can be delivered later.
So why are we behind in clearing off last season’s bumper harvest? It seems the neighbourhood shakes every half hour or so as a freight train passes through the city. If you live in Current River area, the chances are these are unit container trains carrying the latest goods from China and Asia to our local Wall-mart stores. In addition mining companies use rail to transport ore and materials such as potash and gypsum across the country. It is not been too cold to stop or slow down the shipment of these trains all winter. Similarly it has not been too cold to stop the loading of unit oil trains from western Canada to markets across North America. With ships lined up at the west coast waiting for grain, and if the ice age ends in Thunder Bay harbour, we to will be receiving vessels for loading grain, why are the elevators more empty than full?
It seems as though there is enough rolling stock, what is missing are the locomotives and the space on the tracks to handle the bumper crop and all of the other new rail traffic. The rail companies alone have the ability to decide traffic flow, and whose cargo moves when. When it comes to getting your cargo moved it pays to be a big customer. A few short years ago we had a unified Canadian Wheat Board which was owned by the farmers; they could speak with a single authority to the rail companies and in those days grain shipments moved smoothly and farmers knew when they would get paid. Now that the CWB is a ghost of its former self the remaining grain companies do not have this bargaining strength with the rail companies. Furthermore they are not farmer owned and will work to improve their corporate bottom line before they will work to benefit farmers.
This is a photo from my brother's farm showing the oil tanks in his wheat field. Oil and wheat are competing for rail space.
Some farmers choose to sell their grain on the futures market. When the contract comes due there must be grain delivered to the terminal. If the grain cannot be transported then the farmer has no option but to purchase grain at market price and use that to fill the contract. There is no money in that proposal but it avoids being taken to court for breach of contract. Recently what is left of the CWB sent letters to its customer in Manitoba and Saskatchewan offering a semi-truck delivery service to Thunder Bay which has the capacity to handle their grain. In a recent article I have read that truck delivery to Thunder Bay has increased from about 10 trucks a season to 10 trucks a week. At least the CWB is still trying to look after the interest of its farmers.
Shipping by truck is expensive, but the long wait for train service has seen the price of the bumper crop drop and drop some more. Farmers only get paid when their crop is sold and how long can you go without a pay cheque?
Clearly our economy has grown, and the capacity of our rail infrastructure is going to need to grow as well to handle the diversified and increasing demands to transport our goods. Farmers will be forced to pay more for grain transport simply because they will have to compete with the other users on the rail system. We need more locomotives and more track space.
Small farmers have increased the number of grain bins on their farm. My brother can now store a full crop so he does not have to truck grain to the elevator during harvest. In this way they can market their grain at times of the year when prices are more favourable. What they need is reliable affordable transportation so they can fill their sales contracts.
Transportation issues are effecting Canada’s reputation as a reliable exported of grain. Transportation issues are causing problems at the bank for many Canadian farmers, in the rush to trash the CWB did anyone in the government visualize that this might result in the inability to move our grain efficiently. While there has been legislation to compel the railways to deliver, Alberta and Saskatchewan are complaining that the fines and the amount of grain to be moved are not high enough. While the government is focusing the issue on the railway companies, they are only doing what is expected of every blue blooded company; taking care of their shareholders best interests. It’s too late to put the tooth-past back in the tube, but let’s see if the government can act in the best interest of farmers and the Canadian economy and once more restore us to the status as a trusted supplier of agricultural products to the world.