Geography, Weather, Delivery Infrastructure

"The Japanese have switched to purchase wheat from the U.S. Algeria is a long-standing customer [but] they don't think we can deliver. What's at stake is the brand of the country in terms of reliability.
"We've seen railways undertaking a great deal of rationalization in terms of layoffs, in terms of taking locomotives off the tracks and in terms of car allocation. There are not enough cars, locomotives of engineers."
"[Agreements] are enabled by federal legislation but there is not one single agreement. It's a voluntary thing. We need the railroads and the shippers to come together and sign the agreement."
"We are a party (Conservatives) that doesn't like over-regulation, but we have a duopoly here that is part of why our reliability brand around the world is in jeopardy. Our farmers can't get their product to market."
"I'm grateful the leader of the third party supports Keystone [pipeline]. But I don't know how you can support Keystone and be against Gateway."
"How do you advocate for Keystone XL, a pipeline carrying bitumen to the ocean across the U.S., if you oppose Gateway, a pipeline carrying bitumen to the ocean across Canada? I don't think a story about the Sun and the wind is going to cut that."
Brad Wall, Premier of Saskatchewan

Nobleford Elevator - Alberta, Canada - Image provided by: Will Kellogg

Canada, in fact, badly needs pipelines to move its oil to market. In the absence of pipelines the increase in rail traffic dedicated to moving oil and oil products throughout the country is diverting rail cars from other uses, and the movement of grain is one of them. Canadian National and Canadian Pacific railways were referred to as the "weak link" in the supply chain, by Agriculture Minister Gerry Ritz. They're not there where they're needed, when they're needed.

Canada currently has 4.6-million tons of oats, wheat, barley and canola sitting in storage. It's all waiting to be shipped out for export. It's sitting there. Waiting. Because it isn't moving out to the markets eager to claim it for a good price, farmers have suffered with grain prices slumping 20% to 30% since the fall. The winter of 2013-14 has been extraordinarily cold. According to Environment Canada, December and January in Manitoba were the coldest since 1949.

Davidson, Saskatchewan Canada - Image provided by: Will Kellogg

There have been 32 days below -25C in Winnipeg since December first, and 21 days below -30C, representing twice the normal temperature lows for winter. Rail operators respond to these environmental conditions by the use of shorter trains for safety reasons in braking. This year's crop was close to 20 million tones over the average, coming in at 76-million tons for the year's total crop yield.

A challenge that the railways couldn't meet: "No supply chain can realistically be geared up to handle so much product, with so little lead time", according to Canadian National. Apart from the increase in train transport of oil, a revenue cap is seen as a disincentive for railroads to focus on the shipping of grain. Once the cold weather abates, the railroads claim their performance will improve markedly. New hopper cars are coming on stream to boost capacity.

Rosedale Alberta, Canada - Image provided by: Will Kellogg

CN claims it will have a record 5,500 cars weekly at country elevators by early April, an increase from more recent numbers of 3,500. Saskatchewan's Premier Wall favours an aggressive move by the federal government to introduce regulatory or legislative injunctions to move the grain. Reciprocal penalties for whichever side fails to honour its side of the deal for shipping companies and railroads might clarify the situation, he feels.

Picture of the newer styled grain elevators in the town of Morse in Saskatchewan, Canada.

 

This man clearly has potential to leap from one level of government to head another. His sense of humour could also lead him on to success. "There's a Brad Wall who is a senior vice-president for Krispy Kreme Doughnuts, who gets paid $1-million to test doughnuts. Now I know how 30% of the province of Saskatchewan feels. I hate Brad Wall too."