Canada agreed that slow grain shipment by rail is having a serious effect on grain farmers’ income.
Keystone Agricultural Producers (KAP) president Doug Chorney, Agricultural
Producers Association of Saskatchewan (APAS) president Norm Hall and Alberta Federation of Agriculture (AFA) president Lynn Jacobson participated in a panel discussion on Jan. 29 at KAP’s annual general meeting in Winnipeg.
Chorney identified the insufficient number of grain cars being available for rail shipments, which has caused a backup in country elevators, as a challenge for grain farmers. This means farmers can’t deliver the bumper crop of grain most harvested last fall.
"That’s created cash flow problems," he said.
The backlog has also led to discounted grain prices that are taking even more of a bite from farmers’ wallets.
"Farmers are bearing the brunt of these costs each day. We’re shell-shocked by what’s happened," he said, adding some grain prices have dropped between 30 and 35% in the past four or five months.
Hall said some Saskatchewan farmers have crop input loans coming due soon and they might have to ask for extensions if they can’t sell their grain.
Hall said rail problems must be dealt with on a long-term basis through establishing service-level agreements to deal with grain movement across Canada.
Jacobson and Hall agreed that part of the difficulty in adding extra rail capacity is
being caused by a worker shortage, as CN and CP Rail have decreased their crews in recent years. As most railway jobs require training, the companies can’t quickly bump up their employee levels.
Hall said he’s noticed that most trains travelling through the Wynyard area are made up of tanker, auto and container cars. "The last count I heard was that the railways were 40,000 cars short."
Rail companies have long-term contracts to move oil, potash and coal, so using more cars to haul grain isn’t easily done.
Federal Agriculture Minister Gerry Ritz recently announced that the government is contributing $1.5 million, to be matched by agricultural groups and elevator companies, for a five-year study designed to improve rail performance.