The hay is here, it’s moving it that’s the problem.
The Tyrchniewicz report found that the Manitoba and Saskatchewan forage industry has sufficient quality and quantities of forage for export markets, the spotty availability of up-to-date market intelligence and a lack of compressing, pelleting and cubing facilities hinders the export trade.
Portage la Prairie and Saskatoon could be ideal locations for future compressing operations, it added.
Markets in the Middle East and Asia are keen on Canadian forage exports, but the report cautions that unless significant savings in transportation costs are found, only those markets looking for the highest-quality forages should be pursued.
High transportation costs effectively price eastern Prairie forage products out of commodity-type markets. Darren Chapman, of Chapman Farms near Virden, who ships hay regularly to buyers in the United States by truck, echoed that sentiment.
“The growing interest in hay imports from countries such as Saudi Arabia, United Arab Emirates, Japan and China is a welcome development, but only if we can get it there in a cost-effective manner,” said Chapman.
The Manitoba and Saskatchewan Forage Councils are planning to continue working together on potential export opportunities for Prairie forage growers.
Manitoba forage marketers are working on a proposal for Western Economic Diversification Canada that will address high transportation costs by compacting forage, thus lowering transportation costs and improving price competitiveness in world markets.
Although Churchill isn’t an option for now, the study also identifies a number of rail system options to help reduce transportation costs, including out of Minot via the Burlington Northern. The potential there lies with Minot possibly doubling the size of containers it ships, from 20 to 40 feet. If that happened, it will become a cheaper route to move forages on to seaport, says Brent McCannell of the Manitoba Forage Council.
“Ultimately, this comes down to containers and the cost of getting access to containers,” he said, adding that MFC will be watching closely to see what develops at Minot.
The MFC is also talking to Centre Port in Winnipeg and is buoyed by its recent success handling logistics for a soybean sale to China.
There are also ways to reduce transportation costs by shipping more forage per container. Lack of processing is a big part of Prairie forage growers’ struggles of higher freight costs.
The Manitoba Forage Marketers are working on a proposal for Western Economic Diversification Canada to address high transportation costs by possibly purchasing a compressor to reduce standard-size large square bales into smaller packages, McCannell said.
“To be competitive we need to get more forages in a container and if we compress it we can do that.”