Canadian Pacific Railway grain revenues take hit in aftermath of 2021 drought

Canadian Pacific Railway Ltd.’s grain-hauling revenues took a hit in the fourth quarter of 2021, even as the company increased corn shipments from south of the border to address a livestock feed shortage in Western Canada.

The Calgary-based railway company saw freight revenue from grain tumble to $440 million in the quarter ended Dec. 31, 2021. That represents a 13 per cent decline from the same period in 2020, when grain represented CP’s top revenue source at $508 million.

CP says its total grain volumes transported were down 21 per cent in its most recent quarter, a decline the company attributes to this year’s widespread drought that affected crop outputs in Western Canada.

“The 40 per cent reduction in the Canadian crop is driving this decline in volumes,” said John Brooks, CP’s chief marketing officer. “The good news is, we’ve taken the decline in the Canadian grain crop and created an opportunity.”

Brooks added CP worked with shippers and receivers to create a new supply chain moving corn from south of the border to Canadian cattle feedlots suffering from a lack of livestock feed in the wake of the drought.

“We had an all-time record quarter and year for our U.S. grain franchise,” he said.

Last week, Western Canadian agriculture groups publicly criticized CP for slow train shipments which they said have exacerbated an unprecedented livestock feed shortage on the Prairies. In an emailed statement Thursday, federal Agriculture Minister Marie-Claude Bibeau confirmed she has since been in touch with the railway company over the issue.

“I recently expressed my concerns about the dangerously low feed supply for cattle across the Prairies to the CEO of Canadian Pacific Railway, who recognized the sense of urgency and assured me that this is top of mind for CP,” Bibeau said.

The Canadian Cattlemen’s Association said in an email Thursday that some of the awaited shipments of feed corn arrived over the weekend and more are expected in the coming days.

“We appreciate the high priority that CP has placed on addressing the shortage,” said CCA spokeswoman Michelle McMullen. “This has put us in much better shape, and we are not aware of anyone who is not able to get the feed they need this week. But the feed supply remains tight.”