Demand for forages strong in other countries, but Canadian forage growers face major hurdles getting their products to market
So close, but yet so far away.
Although Churchill is the nearest saltwater port for Prairie forage growers, a consultant’s analysis has ruled out its potential as a cheaper option shipping hay to other countries.
“We had hoped the Churchill port would be able to play an important part in the development of an overseas export market, but the study has proven otherwise,” said Brent McCannell, Manitoba Forage Council’s executive director.
Allen Tyrchniewicz, the author of the report, said that the port offers the lowest freight costs when on water, but that there are many challenges surrounding Churchill.
One of the biggest is the fact that compressed and baled forages are typically shipped in containers, and the port currently only handles container traffic within the Hudson Bay region, not overseas shipments.
“With the exception of a few very small container ships that move containers around to the communities around Hudson Bay, there are no ocean-going container ships that actually come in,” said Tyrchniewicz, adding that a minimum shipment for forages would require at least 10-20 containers.
With the United Arab Emirates contracting out for 400,000 tonnes of forages for the Middle Eastern country’s camel, horse and dairy herd, strong demand exists.
“That’s considerabley more than just a couple of containers,” he said.
Mark Cool, vice-president of terminal operations for OmniTRAX Canada, said that the port can handle containers, but enticing a container ship from a major importing nation like China to the port would require that a critical mass of volume must be achieved.
“If they got to the point where they had a full shipload of containers, that’s easily doable here,” he said. “It’s all about quantities. You need to get 500-600 containers in here that are destined for a certain point.”
For shippers offering small volumes, busier ports such as Vancouver are better able to accommodate their needs, he added.
Tyrchniewicz added that another problem is that shipping is a high-volume, low-cost game, and the companies involved are loath to see their “sea cans” idle for any amount of time. That’s why rates on very heavily used routes such as China to Europe are “ridiculously low” compared to other lanes.
With only a few dozen ships moving into the Port of Churchill every year, and virtually no inbound cargoes aside from a shipment of fertilizer from Russia a few years ago, Churchill is a hard sell for the big players. “When you graph that, Churchill doesn’t even show up because it’s such a small volume moved,” said Tyrchniewicz.
Livestock never takes a holiday from eating, so buyers such as the UAE need constant supplies year round. With Churchill’s shipping season only running from July to November, and high insurance costs at times when ice is an issue, the port faces serious challenges attracting such trade, he added.
With upgrades, improvements and/or some structural changes, Churchill could potentially become a shipping alternative in the future for forage producers in the eastern Prairies, depending on whether global warming extends the season, and if grain companies find the port advantageous for serving certain markets.
“Also, if the CWB finds that the grain companies are charging them too much to move product, maybe they will end up using the Port of Churchill more,” said Tyrchniewicz.
“One never knows. In transportation, you have to watch closely and don’t blink.”
Sinclair Harrison, president of the Hudson Bay Route Association, a group dedicated to promoting the Churchill port, was in the northern city last week for a two-day symposium to discuss the port’s future after the CWB monopoly ends this August.
Harrison, who also sits on the Churchill Gateway Development Corporation’s board, said that plans are in the works to look at other commodities, as well as expanding warehouse space. Improving the port’s capacity for handling container traffic came up in discussions, he added.
“There’s no reason that container ships couldn’t dock at the port here just like grain ships,” said Harrison.