The 2018-19 crop year, ended July 31, was record setting for Western Canada’s grain-handling and transportation system.
While industry officials are pleased, they agree the system needs to move even more because farmers keep producing more.
“At the rate we are going today… by the time we get to 2030 we’re going to be looking at a grain supply annually of over a hundred million tonnes,” Mark Hemmes, Canada’s grain monitor, and president of Quorum Corporation, told the 24th Fields on Wheels conference in Winnipeg Nov. 1. “In order to do that we’re going to have to think about doing things differently. We’re going to have to have greater investments. We’re going to have to talk about innovative ways to be able to move that grain.”
At least four major records were set in 2018-19.
“It was a pretty good year,” Hemmes said in an interview Nov. 7.
Shipments, which equate to exports, from Western Canada’s three ports — Vancouver, Prince Rupert and Thunder Bay — rose 6.4 per cent to a record 37.1 million tonnes, up from 34.9 million in 2017-18, and the previous record of 36.8 set in 2016-17, Quorum’s statistics show.
Preliminary figures from the Canadian Grain Commission show Canada exported a record 44.6 million tonnes, up from almost 42 million in the 2017-18 crop year.
Canada’s two railways moved a record 54.3 million tonnes of grain, while primary elevator grain throughput, up 7.4 per cent, hit a record 48.8 million tonnes.
Total grain supply (production and carry-over) was a record 81.9 million tonnes, up less than one per cent from the previous crop year.
Why it matters: Higher yields will help farmers succeed but most of that increased production must find its way to export customers in a timely, reliable and affordable way to keep Canadian farmers competitive.
Manitoba also set some modern grain-shipping records through Thunder Bay in 2018-19.
Setting records is good, but not the whole story, according to Wade Sobkowich, executive director of the Western Grain Elevator Association, which represents Canada’s major grain companies.
“It shows we’ve come a long way as a supply chain,” he said in an interview Nov. 7. “Do we have difficulties? Sure we do, but we are trying to work those out as an industry.
“This is something the industry has accomplished that it has never accomplished before in spite of some of the difficulties that are chronic and still exist… but it’s very positive that we saw these types of volumes and we know the system can handle it, on a longer time horizon of a (full) year.”
Despite the records, railway performance in 2018-19 was similar to the year previous, Hemmes said.
“We’re still a little bit concerned with the rail performance numbers, car cycles were a little higher than what we’ve seen,” averaging 15.7 days, he said.
Loaded transit time was up almost nine per cent to 6.6 days.
Overall car order fulfilment rates were unchanged.
Out of car time was up almost three per cent.
And vessel time in port increased almost three per cent, compared to the year previous.
“The railways moved more,” Hemmes said. “Did they move that much more, more efficiently? Not necessarily, but you can’t criticize them too harshly because they moved it.”
Despite all the records, there were grain-shipping issues last crop year, including delays with getting grain to Vancouver last fall prompting the Canadian Transportation Agency (CTA) to investigate. Both CN Rail, CP Rail and Burlington Northern Santa Fe were accused of rationing service to the port. The CTA ruled CN breached its service obligations to shippers.
Despite problems grain-shipping and export records were set.
While that’s a good thing, Sobkowich said grain companies still want the railways to move more grain between October and March, when grain prices and demand are usually at their highest.
“That’s key for us,” he said. “When we have those peak time periods we are still asking ourselves the question: Can we get the rail cars?”
Not only is winter the peak period to ship grain, but it’s the most challenging. Cold temperatures force the railways to shorten trains because it’s harder to pressurize air brakes. Heavy snow and avalanches can block or derail trains.
“If we can come up with cold weather solutions for moving more grain in the winter we can achieve even more as an industry,” Sobkowich said.
Both CN and CP set grain-shipping records last crop year too (see ‘CN and CP Rail…’ at bottom), thanks in part to increased investments in locomotives, staff hiring, network expansion and the purchase of shorter, higher-capacity rail cars.
“Investment at every level is helping to propel the opportunity to deliver a stronger grain program,” David Przednowek, CN’s director of sales and marketing said in an interview Nov. 7.
Of the 21 new high-throughput elevators announced to be built on CN lines, 17 have loop tracks, he said.
“So we’re getting into this next level of infrastructure,” Przednowek said. “There’s the (100-car) unit train and then the 134 or even 150 (cars) loops. The modernization of the elevator network is important. Producers’ ability to handle grain has changed a lot over the past five years. Everything is scaling up and getting bigger and that also contributes to stronger grain movement.”
CP Rail is gearing up to run 8,500-foot trains of 134 cars, which increases grain carrying capacity 40 per cent, Joan Hardy, CP’s vice-president of sales and marketing for grain and fertilizer told the Field on Wheels conference Nov. 1.
The transition will take time, Hemmes said in an interview later.
“There are 399 facilities (elevators) in the country, 17 of them are loop tracks,” Hemmes said. “You’ve got literally hundreds of millions of dollars invested in concrete elevators all across the Prairies that are not loop tracks and are not going to become loop tracks.
“They’re going to be there another 50 years.
“The transition from 10-car blocks to 100-car trains took 30 years.”
Meanwhile, by 2030 the grain system will routinely have 100 million tonnes of grain a year to ship instead of the current 75 milion to 82 million.
“With a lot of the new cropping approaches and the science that is being put into it we’re probably, easily, going to see that kind of volume.
“In addition, with tens of millions of dollars that are now being invested in research for better seeds, with higher yields, is it really unattainable to see two and three per cent a year annual growth (in production) between now and 2030?
“There’s no doubt, barring a third world war, the demand is going to be there for that product.”
CN and CP Rail grain movement records in 2018-19 crop year
CN records in 2018-19
- CN moved a record 27.8 million tonnes of bulk grain and processed grain product from Western Canada in hopper cars, tanks and boxcars during the 2018-19 crop year. That was up 5.8 per cent or 1.5 tonnes compared to the previous record set in 2016-17 of 26.3 million tonnes.
- It was almost 10 per cent or 2.5 million tonnes more than the 25.3 million tonnes moved in the 2017-18 crop year.
- CN recorded its best-ever single month for grain movement in November 2018 at 2.71 million tonnes and then surpassed in April 2019 moving 2.72 million tonnes. CN also recorded its highest shipment volumes for December and January last crop year at 2.5 million and 2.23 million tonnes, respectively.
- In 2018 CN recorded its second- best-ever shipment volumes for the individual months of August (1.94 million), September (2.41 million), and October (2.59 million) tonnes.
Source: CN Rail’s 2018-19 Grain Year-End Recap
CP records in 2018-19
- CP moved a record 26.8 million tonnes (MMT) of Canadian grain and grain products, up almost three per cent from the prior record in 2017-18 and almost four per cent more than the three-year average.
- In May 2019 CP moved a record volume of grain products, not including whole grains, both from a carload and a volume perspective.
- In April 2019, CP moved a record 2.6 million tonnes of Canadian grain and grain products.
- For the first time CP recorded three consecutive months (Sept. – Nov. 2018) shipping 15,000-plus carloads of western Canadian grain and grain products to the Port of Vancouver.
- CP also moved approximately 660,000 tonnes of Canadian grain in its domestic intermodal service, for a grand total greater than 27.4 million tonnes of Canadian grain moved in 2018-19.
Source: CP Rail news release