Canola farmers remain concerned over rail shipping disruptions

Canola farmers are concerned that current rail shipping disruptions will have lasting impacts on Canada’s reputation as a reliable exporter of food products, with effects being felt all the way back to the farmgate.

“We rely heavily on export markets, with approximately 90 percent of our canola crop exported every year,” says Bernie McClean, Chair of Canadian Canola Growers Association (CCGA). “This crop year has been one of the worst on record and disruptions to our rail system are challenging our ability to respond to the needs of our export customers. We’re seeing ships lining up along the West Coast, unfulfilled rail car orders accumulating, and elevators in the prairies beginning to reach capacity.”

Reports from the Grain Monitor and the Ag Transport

Coalition show several worrisome trends:

• Over 50 grain vessels are waiting to be loaded off the West Coast. The average for this time of year is 25 vessels and the last time a backlog of this magnitude was seen was during the 2013-14 rail crisis. Demurrage charges will begin to mount.

• In excess of 20,000 rail car orders remain unfulfilled and the number continues to grow every day.

• There is evidence that working space in Western Canadian grain elevators is tightening, with some regions reaching near maximum capacity.

Without adequate rail service, the grain handling system quickly backs up, elevators fill up and stop accepting grain into their facilities and, in turn, farmers lose the ability to sell their canola and generate the necessary cash flow to manage their farm operations.

“For canola, we’ve had a major market disturbance, an extremely difficult growing season, a rail strike, and now further disruptions are hampering our ability to ship to export position,” says Rick White, President & CEO at CCGA. “The negative effects resulting from these disruptions to our railway network will take months to fully overcome and will have a direct effect on the competitiveness and profitability of Canadian farmers.”

“CCGA recently met with the Honourable MarieClaude Bibeau, Minister of Agriculture and AgriFood, to express our concerns over the current shipping disruption,” says McClean. “We have also sent a letter to Prime Minister Trudeau calling on the Government of Canada to take decisive action to stem the negative effects on farm profitability and Canadian competitiveness.”