Prairie rail jams putting Canadian millers in shutdown mode

A rail backlog keeping Prairie wheat and oats from arriving at Canadian mills has already forced some millers to suspend operations, according to the millers’ organization.

In the Feb. 27 issue of the Manitoba Co-operator, Canadian National Millers Association (CNMA) president Gordon Harrison notes “prolonged interruptions of up to three to four weeks” in wheat and oat deliveries have forced “some mill locations… to cease production.”

Such shutdowns, he told the Co-operator, translate to “lost running time, lost business for producers and processors, lost wages to employees and potentially lost customers. The economic harm is mounting daily and is potentially irreparable.”

Grain moved to mills in the U.S. and Eastern Canada is deregulated and doesn’t fall under the revenue entitlement, also known as the revenue cap, which Canada’s railways have claimed is a disincentive to shipping grain.

Given that domestic milling demand is relatively consistent one year to the next, the fact the railways aren’t properly serving mills shows the problem isn’t just the record-large crop that came off Prairie fields in 2013, said Wade Sobkowich, executive director of the Western Grain Elevator Association.

“We have a 55,000-car shortfall and over half of that is a shortfall to the U.S. and domestic, which is non-regulated corridors,” he said. “The fact that millers are having a problem just punctuates the fact that the grain revenue entitlement has nothing to do with this.”

CLICK HERE to read Allan Dawson’s article from the Feb. 27 issue of the Manitoba Co-operator.

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