The Western Canadian Wheat Growers Association issued a strongly worded press release on Tuesday after striking picketers targeted Vancouver’s Cascadia grain terminal, co-owned by Viterra and Richardson International.

“A strike is one thing, but to intentionally target a port that is critical to the lives of grain farmers and to the entire Canadian economy is the height of reckless irresponsibility,” association president Gunter Jochum said.

Other commodity groups across the country had more measured responses to PSAC’s strike, which began April 19. On the day workers walked off the job, Keystone Agricultural Producers (KAP) president Jill Verwey weighed in with her organization’s concerns.

“KAP respects the rights of Canadian workers to collective action,” she said in an April 19 press release. “However, this strike could negatively impact grain shipments, resulting in backlogs and restricted cash flow for farmers, as well as increased demurrage costs for grain companies. Restrictions in cash flow could hamper a farmer’s ability to market their remaining 2022 crop as well as their ability to purchase inputs for the 2023 crop year.”

KAP expressed their concerns in writing to both the government of Canada and PSAC prior to the strike action and called on both to make sure adequate contingencies were in place to minimize negative impacts to the grain handling system.

The Agricultural Producers Association of Saskatchewan (APAS) also weighed in, arguing that the supply chain has yet to fully recover from the impacts of COVID-19 and that a prolonged strike could be a major blow to producers.

“Delayed inspections will cause backlogs at ports. Every day a ship must wait means demurrage charges to grain companies, and these costs always make their way to the farmer,” APAS president Ian Boxall said.

To date, shipping hasn’t been dramatically affected. According to Mark Hemmes, president of Quorum Corporation (Canada’s Grain Monitor), while picketing at Cascadia was an inconvenience, it was limited to that location, only lasted a few hours and the impact was not significant.

“It’s the only terminal on the south shore where the entrance to the terminal property is outside the port security gates,” Hemmes said.

Terminals in Thunder Bay and Prince Rupert are also within port security gates, he added, and while some picketers have port passes, he says it’s unlikely they would use them for picketing.

Inspection impacts

However, it’s not just picketing that’s at issue. Sixty-five per cent of Canadian Grain Commission (CGC) staff are on strike right now, and that includes most of the grain inspectors.

“There are some inspection staff that are not in a strike position, but those are limited to some managers in the regions and inspection specialists across the country,” said CGC spokesperson Rémi Gosselin. “So that means that the CGC’s provision of official inspection and certification of grain exports is significantly impacted.”

To minimize the impacts on grain producers, companies and grain exports in general, the CGC has developed contingency plans allowing inspection services to continue. “We’ve allowed grain companies to temporarily collect samples on our behalf and then provide those to us so that we can provide final inspections and certification on grain shipments so that exports meet importing countries requirements,” Gosselin said.

According to Hemmes, those provisions appear to be working.

“So far, the ship-loading stats don’t show anything in the way of delays to vessel departures or loading,” he said. “The CGC contingent that is managing the inspections seems to be keeping up, and between the terminals and the CGC, they have procedures in place that ensure inspection protocols are being maintained.”

However, Hemmes said it’s a heavy burden to bear for those doing the inspections. “Those managers are going to need a holiday when this is done,” he said.

Jochum said he’s pleased with the work the CGC has done to ensure grain continues to move, but he fears that if the strike is prolonged, cracks could begin to show.

Time for a third party?

The wheat growers’ association has long argued that the Canada Grain Act should authorize third-party weighing and inspection of vessels leaving Canadian waters. Jochum said this strike is a good time to revive the issue and could help insulate the supply chain from future disruptions.

The call for third-party inspectors to replace federal inspectors is a hotly debated topic. The issue was raised a number of times during the consultation surrounding the current Canada Grain Act review.

The What We Heard: Canada Grain Act Review Consultations report, released in 2021, said, “While it was unanimous that the CGC should continue to have a role in the setting of quality standards, approximately half of respondents that discussed outward inspection were in favour of the CGC accrediting and overseeing third-party inspection companies rather than performing inspections directly.”

The wheat growers say that third-party inspectors are already in place to meet the demands of overseas customers, and there is therefore no need to duplicate those services.

The other side of the coin notes that the CGC stamp of approval is part of why Canadian grain quality has an excellent reputation.

But Jochum is concerned that if overworked managers are unable to keep up in the face of a prolonged strike, that reputation could be tarnished anyway.

“The problem is they are swamped. They are working seven days a week,” he said. “If this strike goes on for any length of time, eventually someone is going to drop the ball along the way.”

— Don Norman reports for the Manitoba Co-operator from Winnipeg.

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The commission’s report issued Thursday showed a mere 800 tonnes of canola were shipped overseas. The week before, 128,300 tonnes were outbound.

“We’re really getting close to running out,” said Quorum Corp. president Mark Hemmes of the available canola. “They’re going to put the rest of (what’s available) into the crush.”

Hemmes estimated there were about 13.8 million tonnes of canola in supply for 2021-22. Of that, 4.7 million were exports of canola seed with another four million in canola meal and oil.

Canola exports were fairly decent in September and October 2021, he said, but by February of this year there was little left to move out.

“Everybody I talked to fully expected that by the time we got to April, there wasn’t going to be much left. That turned out to be true,” Hemmes said.

As of March 27, that 4.7 million tonnes of the Canadian oilseed was 51 per cent of exports the same time a year ago, according the CGC’s grain statistics weekly. At this point in the marketing year, domestic usage tallied a little below 6.1 million tonnes, sitting at 86.5 per cent of total domestic consumption at week 34 of 2020-21.

The 800 tonnes of canola exported last week was by far the marketing year low, handily beating out the previous low of 6,200 tonnes in week 3, according the CGC’s reports. The marketing year high was hit in week 15 at 304,900 tonnes.

Edmonton-based Quorum Corp. is an independent third party that tracks grain movements across the Canada, monitoring the system’s efficiency and reliability.

— Glen Hallick reports for MarketsFarm from Winnipeg.

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February’s cold snap resulted in grain movement across the region falling below its three-year average.

The most pressing issue has been a shortage of grain to load onto vessels at both Vancouver and Prince Rupert in British Columbia.

“The vessel lineups at both ports have been unusually high throughout this crop year. This is in part because of the heavy demand and partially because the demand has not slowed since last spring,” Hemmes said.

“Also, the railways — while they performed exceptionally well from October through to the end of January, the start was slow, and the system has had a difficult time recovering. These past two weeks have had an especially large impact on vessels as the grain was not available at port, but the vessels continue to arrive.”

The problem will be compounded because of more vessels due to arrive. As of Monday there were 35 vessels at Vancouver and seven at Prince Rupert waiting to be loaded, with a dozen more headed to Vancouver and five on their way to Prince Rupert, he said.

The shortage situation at both West Coast ports was intensified as Canadian National and Canadian Pacific Railways were required to slow their respective movements because of frigid weather that descended on the Prairies.

The number of cars allotted was cut by 31 per cent by CN and 60 per cent by CP, Hemmes said.

“In addition, we saw a decrease in the amount of grain that was delivered by producers in the country, 458,000 tonnes against an average of over 1.2 million tonnes weekly throughout most of this crop year.”

Other than the February cold snap, there haven’t any major delays to rail traffic this winter.

“There have been some derailments through the winter period but none that saw line outages any longer than 24 hours and they have recovered fairly quickly,” Hemmes said.

While Prince Rupert was forecast to get precipitation this week, any delays due to rain or snow haven’t been significant, he added.

— Glen Hallick reports for MarketsFarm from Winnipeg.

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The spokesperson said there not have been any big problems recently, only a few sporadic instances in rail shipments.

There has been an improvement of service since the beginning of the 2018-19 crop year, he said, as the railways added more capacity. There are some car supply problems, he added, but noted not all of these can be avoided.

The spokesperson said overall volumes of grain shipments were up 3.9 per cent at the end of October. In terms of ports, he said Prince Rupert is up 18 per cent and Vancouver is up by 4.4 per cent, but Thunder Bay is down by 4.9 per cent.

With talk of moving crude oil out of Alberta by rail to reduce the province’s glut, the spokesperson couldn’t say if that could have any impact on grain shipments. Grain, as with oil, must share capacity with other commodities such as coal, sulphur and potash as well as intermodal traffic, he said.

According to data in Quorum’s weekly performance update, for week 15 of the 2018-19 crop year, there were 8,750 cars unloaded at the three ports, 5,182 belonging to Canadian National Railway and 3,568 belonging to Canadian Pacific Railway. The year-to-date total stands at 117,359 cars.

So far this grain year, more than six million tonnes of grain have been shipped to Vancouver and almost 1.59 million tonnes to Prince Rupert. Thunder Bay has handled about 2.42 million tonnes.

Quorum’s report noted there were 28 vessels at Vancouver, with eight berthed and the others at anchor. There were five vessels at Prince Rupert.

— Glen Hallick writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting.

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Reports by Quorum Corp., which monitors Prairie grain handling, stated vessels at Vancouver were up 31 per cent from the previous week (17). The increase in ships raised sentiments that grain orders and exports may soon pick up.

At Prince Rupert, three vessels were waiting.

Total West Coast port unloads were 14 per cent higher than the four-week rolling average, but three per cent lower than last week.

As of Week 7, grain shipments leaving from the port of Vancouver were 11 per cent below last year at 2.324 million tonnes, down from 2.612 million, and 10 per cent below the five-year average of 2.577 million.

Prince Rupert was picking up some of the slack, operating at 38 per cent ahead of last year (664,900 tonnes, up from 482,000) and 11 per cent ahead of the five-year average (600,700 tonnes).

Overall, shipments through West Coast ports were three per cent less than a year ago and six per cent below the five-year average.

Thunder Bay shipments are down two per cent compared to last year and 25 per cent below the five-year average.

Meanwhile, country stocks in store (excluding stocks stored at export terminals) were below last year’s level at this time (3.727 million tonnes, down from 3.941 million tonnes) but ahead of the five-year average of 3.251 million tonnes. That’s based on Quorum’s Week 7 reports, ending Sept. 25.

Table: Country stocks in store, in thousands of tonnes, Week 7.

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Canada exported only 129,000 tonnes of canola during the latest reporting period, which compares with the previous five-week average of 194,800 tonnes.

Total canola exports during the crop-year-to-date of 5.908 million tonnes are in line with the previous year’s pace of 5.922 million.

Wheat exports during the week were also on the slower side, with 244,800 tonnes exported, about 100,000 tonnes off the previous five-week average.

A total of seven grain vessels were cleared in Vancouver during the week ended Tuesday, according to the latest Grain Monitoring Program report compiled by the Quorum Corporation. That was down from 10 vessels cleared the previous week, but still helped take the total lineup down to 25 vessels from 27.

Total unloads on the West Coast of 3,971 rail cars were down by 23 per cent from the previous four-week average and about 39 per cent below the same week a year ago, according to the weekly Quorum report.

— Phil Franz-Warkentin writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting.

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A total of 30 ships were waiting in Vancouver as of Sunday, which compares with the year-to-date average of 22, according to the report.

A recent Canadian Industrial Relations Board arbitration ruling contributed to the slowdown, as the decision has effectively stopped the loading of grain ships during adverse weather until new safety measures are implemented.

Weekly railcar unloads in Vancouver of 4,023 cars were down 16 per cent from the four-week average.

However, Prince Rupert unloads of 1,664 cars were up 30 per cent from the four-week average.

Total stocks at western port terminals increased to 1.3 million tonnes, which represents 76 per cent of working capacity.

In the countryside, stocks in country elevators of four million tonnes were up by about 120,000 tonnes from the previous week, representing 84 per cent of capacity. — Commodity News Service Canada

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Export terminals at Vancouver, Prince Rupert and Thunder Bay put through 35.945 million tonnes of grain last crop year, according to the Grain Monitor’s week 52 report, exceeding the 2014-15 record of 35.76 million.

The number doesn’t include domestic or shipments to the U.S.

The final number could change, but a new record is certain, Mark Hemmes, president of Quorum Corporation, the firm hired to monitor Western Canada’s grain handling and transportation system, said in an interview Friday.

“Overall I think it’s the biggest year we’ve seen in tonnes moved,” he said.

Vancouver, Prince Rupert and Thunder Bay terminals unloaded a record 399,203 cars shipped from country elevators versus 384,782 in 2014-15.

The Western Grain Elevators Association (WGEA) is pleased with the rail service its members, which include the West’s major grain companies, received, executive director Wade Sobkowich said in an interview last Wednesday.

“The railways need to remain on their game whereas before (when rail service suffered) we might have said they needed to get on their game,” he said.

Canadian National Railway (CN) did an excellent job moving grain to export all last crop year, while Canadian Pacific Railway (CP) struggled earlier, but picked up the pace the last half the year, he said.

“We would expect the railways to continue servicing the grain industry as they have been,” Sobkowich said. “They have been performing well and we are looking at a crop that it is smaller than it was last year so we have greater confidence that they are going to do that.

“In addition we have C-49, (federal legislation) which we expect to pass in the early fall, hopefully, and then shippers will have more tools to hold the railways to those service standards that they have already been achieving.”

The WGEA estimates Western Canada’s crop at 60 million tonnes, down from last year’s 76 million tonnes — the West’ second biggest crop, behind the 77 million-tonne record set in 2013.

Railway officials said last week they are ready to move the 2017 crop.

“CN is aware of the variance in crop size from the different organizations that forecast this,” Doug MacDonald, CN vice-president of bulk, wrote in an email. “From discussions with our customers, CN expects a similar number of orders on its network as the prior crop. We are ready to move it.”

CP has said it’s also ready.

“At CP, moving grain is embedded in our DNA and has been for more than a century,” the company’s chief marketing officer, John Brooks, said in a news release Monday.

This is the second grain movement record in the last three years and comes just four years after a massive backlog in grain shipped by rail that prompted the federal Conservative government to order the railways to meet weekly shipping targets or face fines.

That unprecedented action, which the railways criticized as draconian, but which was welcomed by farmers and grain companies, was followed up with the Fair Rail for Farmers Act, an early review of the Canadian Transportation Act and C-49, the Grain Modernization Act tabled earlier this year by the current Liberal government.

CN moved a record 21.8 million tonnes of grain in 2016-17 — seven per cent more than the prior three-year-average, beating the one-year record set in 2014-15 by two per cent. And that’s despite more -25 C days and more snow than 2015-16 or the three-year average and a slow start to grain movement due to a wet fall, CN said in a summary of the last crop year.

In addition CN set six new monthly shipping records between the peak months of September and March when grain prices are highest.

CN is calling for federal infrastructure investment for Vancouver’s congested North Shore.

“We gave our customers what they were looking for by significantly expanding our commercial product offering,” MacDonald said. “CN expanded commercial agreements that guarantee car supply in advance to our customers both large and small. This commercially-driven innovation includes reciprocal penalties which drive accountability for both shippers and CN, and allows our customers to make market-based decisions.”

Last crop year, customers secured about 70 per cent of CN’s car supply in advance under commercial agreements subject to car commitment guarantees, he added.

CN credited its record performance to a combination of factors, including investing $3 billion in infrastructure the last five years, having crews, cars and power ready, a fair and predictable car allocation policy, which saw CN communicate a maximum weekly supply chain capacity of 5,500 carloads during the fall and spring, and 4,000 carloads during the winter.

CP moved about the same amount of grain last crop year as in 2014-15 and two per cent more than the five-year average.

CP’s Dedicated Train Program (DTP) has improved grain movement and will be even more important this crop year, accounting for more than 75 per cent of CP’s grain service, Brooks said.

CP is working toward 8,500-foot long trains with a minimum of 134 cars of export grain in Canada, moving 20 per cent than traditional 112-car trains.

“Through infrastructure investment and collaboration with grain companies and port operators, this enhanced train model allows railways, elevators, and ports to increase throughput and better utilize resources,” CP said in a release.

“The end result is more grain transported to market more efficiently than ever before.”

Improved communications and infrastructure investments, contributed to a new grain movement record, Hemmes said.

“Richardson… is almost like a new terminal (in Vancouver),” he said. “Viterra has spent a ton of money on both Cascadia and Pacific.

“The money put into Alliance — and they are putting in more — is really starting to show positive results.

“Prince Rupert… just keeps getting better and moving more and moving it faster. Those kind of efficiencies are just as important as anything and probably more important than what the railways are doing because they are turning cars faster. The grain companies are getting better between co-ordinating between the country and the ports. So things are moving smoother that way. I would attribute it as much to capital investment by the grain companies and communication between all of the stakeholders.”

— Allan Dawson is a reporter for the Manitoba Co-operator at Miami, Man. Follow him at @AllanReporter on Twitter.

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The Port of Vancouver lineup included 26 vessels as of Tuesday, according to the latest weekly report from the federal Grain Monitoring Program administered by the Quorum Corporation. That compares with the current one-year average of 18 vessels.

“Even 18 is still high,” said Mark Hemmes, president of Quorum Corp., noting there are six berths and 14 anchorages at the port. “That says the grain industry is using up everything, and then some.”

Of the boats currently waiting at Vancouver, Hemmes described six as “really old,” with 12 there for over three weeks.

The current vessel lineup at Prince Rupert, Canada’s other West Coast port, sat Tuesday at six — also well above average.

Some of the boats likely arrived a few weeks early and are now waiting for grain, said Hemmes. On top of that, adverse weather prevented loading with heavy rains and snow even causing problems for people getting to work.

“They had a few days where they just couldn’t load vessels,” said Hemmes.

In addition, logistical issues on the south shore in the fall were fixed, but “now they’re playing catch-up,” said Hemmes.

On top of that, allocation problems in the countryside were causing some problems getting grain where it needs to be in the sequence that matches what the boats are looking for.

Even with the problems and resulting delays, “it’s not a panic, because grain is still moving fairly well,” said Hemmes.

Other ports along the West Coast in the U.S. and Canada face similar challenges this year, with heavy snowpack in the southern Rocky Mountains causing rail delays.

Only Canadian National Railway (CN), with the most northern route, was relatively unscathed, Hemmes said.

The large vessel line-up and rising demurrage costs would likely work their way back to basis levels in the Prairies, he said — a possible saving grace being very low ocean freight rates.

“The crisis in the dry bulk marine business really works to the advantage of anyone who ships bulk products out of North America,” he said.

“We’ve never seen rates as low as we’ve seen the last couple of years… It dulls the pain (of the loading delays) and provides huge opportunities for Canada.”

— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting. Follow Phil at @philfw on Twitter.

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The 2013-14 crop year, with its logistical challenges and, eventually, federal government intervention, are still fresh in the mind of many in the Canadian grain sector.

The 2013-14 record large crops grown in Western Canada were an anomaly, but production levels are still steadily growing and the “pressure is on the system to handle the rising production,” Bruce McFadden, director of research and analysis with Quorum Corp., told the Cereals North America conference here Tuesday.

Canada’s primary elevator storage capacity bottomed out at five million tonnes in 2005, but has been steadily increasing over the past decade to sit at roughly 6.5 million tonnes, which will help accommodate larger crops, according to data McFadden presented.

That added capacity will help if Canada runs into another burdensome supply situation, McFadden said, but added that while grain is moving relatively smoothly for the time being, “issues are inevitable.”

Asked where the next potential bottleneck in the system could be, McFadden pointed to a lack of communication and the need for all partners in the system to better understand what’s going on.

If the lines of communication are open and fluid, it will lessen the impact on whatever situation arises, he added.

Mark Dyck, director of logistics with G3 Canada Ltd., said the rail car supply relative to demand was now in balance, with both Canadian National and Canadian Pacific Railways (CN, CP) running close to current.

The grain companies were getting better at managing the pipeline now that it is a few years in with an open market for wheat, he added.

On top of improved communication, Dyck pointed to the sheer number of moving pieces when it comes to transporting grain. All those factors need to be looked at together to better improve the whole, he said.

— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

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