The Canadian Wheat Board is on track to meet its export target of 19.3 million tonnes of wheat, durum and barley this year thanks to unusually good rail service, farmers here were told last week.
“In my 10 or 11 years at the wheat board this is probably their (railways) best year next to last year (with respect to grain movement),” said Mark Dyck, the CWB’s senior manager of rail logistics.
He told about 20 farmers here March 8 at a CWB farmer forum meeting the board plans to ship an average of 4,450 cars a week of wheat to export ports in April, May and June. That’s up from 3,800 or so cars shipped weekly in January, February and March.
The CWB’s 19.3 million export target is up about one million tonnes from last year. That will require total shipments of 215,000 rail cars or an average of 4,120 a week, Dyck said.
Weekly car movements this crop year have been ahead of the same period in 2008-09.
The CWB wants to ship 1,700 cars a week to Vancouver 1,200 to Prince Rupert, 1,200 to Thunder Bay, 300 to the United States and 50 to Mexico. (Mexico also receives CWB grain via ship.)
Fifty-five per cent of the grain Manitoba farmers committed to the CWB has come into the system. Saskatchewan and Alberta deliveries are at 48 and 51 per cent, respectively.
As of week 16 of the current crop year 5,911 producer cars had been shipped, up slightly from the same period a year ago.
Last year a modern record of 12,457 producer cars were shipped. Dyck said the 2009-10 total is expected to be a bit higher.
A number of factors affect grain
“The railways have started to ‘right-size.’ They’ve parked engines and are trying to manage their costs.”
– MARK DYCK
shipments, Dyck said. Usually insufficient railway capacity is the main constraint. But not last crop year. Railway traffic fell due to the economic recession and as a result the railways moved more grain. Even this year total traffic for Canadian National and Canadian Pacific railways is off 15 and 17 per cent, respectively.
That’s worked to farmers’ advantage, but Dyck predicts that will be short lived as the economy improves.
When working full out, the CPR moved 36 trains a day through the mountains to Vancouver, but before the recession, that wasn’t enough to meet the demand.
“This will be an ongoing issue for farmers,” Dyck said. “As the economy picks up, capacity to the West Coast will be an ongoing issue. It’s a hard one to solve. It will take a major infrastructure build.”
While the railways are moving more grain because there’s fewer products to transport, it’s important that the railways spot grain cars in a timely way and fill them in order, Dyck said. In February 2008 fewer than 20 per cent of the car orders were spotted in the week they were ordered for, he said.
“We have limited capacity at the port and we need the grain to arrive in order.”
In an effort to improve grain movement the CWB is in daily contact with grain companies and the Canadian Grain Commission to get a handle on grades, protein and moisture levels.
The CWB and the railways meet weekly and are trying to improve relations. The CWB and CP each keep a scorecard on the others’ performance.
Another logistical factor is grain quality. The CWB again has a program for shipping fusariumdamaged wheat, but blending it off is getting harder because of changes in the disease, Dyck said. There used to be a one-to-one relationship between fusarium-damaged kernels and level of DON (deoxynivalenol) toxin in infected wheat, but now it’s more like two to one. Dyck said there’s still 35,000 tonnes of fusarium-damaged wheat in the St. Lawrence system from last year to be blended off.
Ocean freight rates peaked at almost $100,000 a day for a Panamax vessel in the summer of 2008. They fell to around $1,000 a day earlier this year but have since risen to around $3,000.
When bulk ocean rates peaked, it was cheaper to ship grain in containers and that’s what the CWB did, Dyck said. One crop year the CWB moved 200,000 tonnes in “cans” making it the largest container shipper in Canada.
Now containers cost four to five times as much as bulk shipping. Despite that the CWB is still exporting some grain in containers – usually a new product or servicing a mill that can’t handle huge cargoes or can’t afford them, Dyck said. [email protected]