At the midway point of the 2023–24 transportation year, grain shipments are moving at a good clip.
“In the last 12–18 months, we’ve seen some really good performance from both of the railroads,” said Mark Hemmes, president of Quorum Corporation, Canada’s grain monitor, at the Feb. 15 CropConnect conference in Winnipeg.
“The exception was the last four or five weeks, and that was largely driven by the huge cold spell that came in right after the New Year.”
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Why it matters: With grain flowing quickly, elevators will compete more aggressively to attract grain, potentially resulting in better prices for farmers.
Manitoba got a touch of that cold spell, but Saskatchewan and Alberta got the worst of it in a two- week period when temperatures dipped as low as -50 C.
Railways always have trouble moving volumes during cold weather, Hemmes noted, and this time was no exception.
The Ag Transport Coalition’s weekly performance report for Jan. 14-21 noted that, between CN and CP, only 59 per cent of ordered hopper cars were filled that week, down from 88 the week before. It was the worst result since December 2022 for CN and since February 2023 for CP, but was not a surprise.
“It is a well documented fact that when temperatures reach the levels seen in week 25 (Jan. 14-21) that railway performance declines, and more often than not declines dramatically,” the report read.
“While we cannot at this time quantify the impact that this level of performance has, or will have, on grain shippers’ supply chains, it is likely that it has had some negative ramifications.”
About 77 per cent of ordered cars were filled between the two railways in the week after the cold snap, before slipping to 68 per cent from Jan. 28 to Feb. 4. Filled orders sprang back to 77 per cent Feb. 4-11.
“It was a really good recovery,” Hemmes said. “We were thinking that it was going to take them a month to get back into shape. But it was maybe two or three weeks, and they were back up to running in pretty good fashion.”
State of the industry
Railways have improved their operations in the last few years, Hemmes said, but this year’s smooth sailing is largely attributable to a smaller crop.
According to Quorum’s January report, primary elevator shipments were 24.6 million tonnes in the first half of the 2023–24 crop year, 8.2 per cent less than in the previous year. Wheat and canola made up the bulk of that total, at 71.6 per cent.
“It’s a little easier on the railways, I think. That’s been really helpful to them to be able to move things as well as they have, even during that extreme cold weather,” said Hemmes.
Wade Sobkowich, executive director for the Western Grain Elevator Association, had a similar assessment.
“It’s been going relatively smoothly. At a high level, we’ve been getting the capacity, and sometimes more than the capacity, that we’ve needed.”
This is despite the fact that the overall hopper-car fleet declined slightly through the first half of the crop year. The fleet boasted an average of 21,867 cars, 0.6 per cent less than in 2022–23.
