“We are seeing feed prices start to creep up. I think it’s because of the rail disruptions and stuff like that,” Leclerc commented. ”There definitely are some market opportunities to take advantage of right now.”

There was a brief period of chaos among Canada’s two largest railways after they locked out approximately 9,300 union members. In turn the union issued strike notices, but the Canada Industrial Relations Board imposed binding arbitration to resolve the labour dispute.

Leclerc said November-December pricing is 30 cents per bushel more than prices for September-October.

“Who knows what the markets will bring next week,” she pondered.

She quoted feed barley for September-October at C$4.80/bu. delivered in the Edmonton area, with that for November-December at C$5/bu.

As for feed wheat, Leclerc placed it at C$7 per bushel picked up in the yard in the Red Deer/Edmonton area, with number one wheat at C$7/bu. delivered.

“The feed wheat markets is a little more aggressive than the number one market,” she said.

When it came to the province’s grain harvest, Leclerc stated “We are seeing a lot of pockets of lightweight grain in Alberta. The monster crop everyone was anticipating seems to be very patchy.”

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The implications for grain movement are unknown, but unloads are already down at the port of Vancouver.

The railway suspended service Tuesday due to two wildfires burning in the area and implemented its firefighting train, Trident, early that morning.

The next day it resumed operations after developing an operational plan with the Unified Incident Command Centre and added a second firefighting train, Neptune. However, later that day CN again suspended operation as a wall of fire swept through the town.

The company’s Friday update said trains had resumed.

“After inspecting its infrastructure on Thursday afternoon, CN collaborated with the Unified Incident Command centre to revise and implement its operational plan, allowing goods to safely resume movements Friday morning through Jasper,” the statement said.

“CN remains in regular contact with unified command and all parties involved, and monitoring weather and fire movements.”

The company also pledged to work with the community as it rebuilds.

Late Friday, Western Grain Elevator Association general manager Wade Sobkowich said the line was open but smoke and concern for track condition resulted in slow going.

He said trains usually travel about 55 m.p.h. on that line but were down to between 20 and 25 m.p.h.

CN usually moves 40 trains daily on the line, but that has been reduced to between 10 and 12 at that speed, he said.
“These are total trains, grain and other commodities as well,” Sobkowich said.

“CN has about 120 trains stopped in various places throughout their network as a result of the Jasper fire so far.”

He said grain unloads at Vancouver were down about 50 per cent since traffic resumed, and grain handlers are concerned.

Sobkowich also said new labour laws that govern work and rest times came into affect in May, and the railway will be facing labour limitations as well.

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Workers represented by the Teamsters union last week voted overwhelmingly to strike as early as May 22.

Late on Thursday, federal Labour Minister Seamus O’Regan said he had asked the Canada Industrial Relations Board to look at whether the strike might have safety implications. Until the board has issued a decision, the strike cannot start.

In an emailed statement, the Teamsters union said it was reviewing O’Regan’s move and would “obviously comply with any order” from the board.

O’Regan acted after stakeholders expressed concern about the effect of a stoppage on healthcare infrastructure, in particular shipments of propane, which is used as a back-up generator fuel for rural hospitals, said the official, who requested anonymity given the sensitivity of the situation.

There is no set timeline for the board to issue a decision.

Farm groups have said a strike would cause mass disruption to the agricultural sector and the Canadian economy.

“As farmers, our operations are closely tied to rail transport, both inbound to access crop inputs and outbound to deliver grain to export position,” said Grain Growers of Canada chair Andre Harpe.

“A rail strike now is the last thing we need. We’re at a critical point in the seeding season, and any delay in shipping can directly affect our bottom line and cause substantial economic losses across the agricultural sector.”

The organization said about 94 per cent of Canadian grain moves by rail. Job action would mean elevators could not accept grain, leading to delayed payments and financial hardship.

—Reporting for Reuters by David Ljunggren; with files from Karen Briere

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“We are delighted to have reached an agreement with Iowa Northern Railway. We look forward to the opportunities our combined network will provide customers, farmers, and our partners to respond to the needs of their existing and new markets,” said Tracy Robinson, CN’s president and CEO in a news release.

Iowa Northern Railway operates about 275 track miles (443 km) in Iowa, the release said. It serves upper Midwest agricultural and industrial markets.

CN did not disclose the terms of the transaction. The agreement awaits regulatory review by the U.S. Surface Transportation Board.

That decision is expected sometime next year, CN said.

–Geralyn Wichers is associate digital editor of AGCanada.com. She writes from southeastern Manitoba.

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Bill C-47, the government’s budget implementation bill — which was first read April 20 in the House of Commons and got third reading in the Senate and royal assent on June 22 — includes amendments to section 127 of the Canada Transportation Act, extending rail interswitching radius within the Prairies to 160 km, up from 30 currently.

Interswitching rules commit one rail carrier to pick up cars from a shipper, then deliver them to another railway for the line haul — that is, if the point of origin or destination of a “continuous movement of traffic” within the Prairie provinces is also within the given radius of an interchange between two companies’ rail lines.

In other words, as the Western Grain Elevator Association — which declared its support for the provision in a release Tuesday — said, it “gives shippers in all sectors who are physically located on a single rail line, the ability to automatically seek competing service and rates from an alternate carrier.”

The 18-month pilot expansion “is expected to bring about an increased level of competition among railway service providers, and represents an incremental gain for supply chains and the Canadian economy more broadly,” the WGEA said.

The budget bill calls for the interswitching pilot to come into effect on the 90th day after the bill received royal assent — that is, Sept. 20.

The previous Conservative government had set up a temporary extension of the interswitching radius to 160 km in 2014, but that extension was sunsetted in 2016.

The Railway Association of Canada, which represents almost 60 railways including Canadian National Railway and CPKC, in March ripped the current Liberal government’s plan as a resurrection of a “failed policy” that was “misguided and harmful to Canada’s supply chains.”

A number of farmer groups disagreed, launching a campaign this spring called “Flip The Switch,” calling for the budget provision to be boosted even further to a five-year pilot and a 500-km interswitching distance.

The Flip The Switch campaign partners, in a separate statement Thursday, said they “look forward to working with the government over the next 18 months to develop a path that leads to the extension of the distance and the permanent integration of this policy into Canada’s transportation framework.”

For its part, the WGEA said Tuesday that when the 18-month pilot is done, it plans to ask the federal government to make the expansion permanent, “regardless of how often physical interchanges occur.”

The association said it would also ask for an increase to the radius, so as “to give all shippers at least one other competitive shipping option.”

The interswitching provision “recognizes that competitive tension is one of the basic tenets of a well-functioning marketplace,” WGEA executive director Wade Sobkowich said.

“Shippers prefer to use the rail carrier that services their facility first and foremost, however, the provision offers an alternative when service or freight rates are less than adequate.” –– Glacier FarmMedia Network

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Winnipeg-based Richardson on Monday announced expanded rail car spots for its elevators at Lacombe, Carseland, Provost and Olds, Alta.; Estevan, Whitewood and Nokomis, Sask.; and its Dundonald elevator about 20 km north of Portage la Prairie, Man.

At Whitewood, about 110 km south of Yorkton, the expansion work will also include upgraded storage capacity, bringing it up to about 44,800 tonnes from its current 31,140. A company spokesperson said the upgrades will also boost that site’s loading speed to 134 cars in 16 hours.

The expansion work is due to start later this summer for completion by the end of next year, Richardson said.

The expansions, CPKC said, will allow future trains from these sites to run under the railway’s 8,500-foot (2.6-kilometre) High Efficiency Product (HEP) model.

CPKC’s standard unit train for grain, which today runs up to 7,000 feet (2.1 km), is the model Richardson today ships from 27 CPKC-served elevators in Canada and one in the northern U.S.

In 2018, before its merger with Kansas City Southern, CP unveiled new high-efficiency grain hopper cars for the HEP model, featuring a five per cent shorter frame capable of carrying 10 per cent greater weight and 15 per cent more volume than previous-generation hopper cars. In all, CP said at the time, the 8,500-foot HEP train model is expected to allow a train to handle about 44 percent more grain.

Richardson’s newest elevator, commissioned earlier this year at Carmichael, Sask., about 65 km southwest of Swift Current, marks the grain handler’s first 8,500-foot HEP-compatible site, with a loop track to handle up to 175 high cube-style rail cars.

Richardson president Darwin Sobkow said in a release Monday the expansions at the eight Prairie elevators “will increase capacity and efficiency, enabling Richardson to further benefit from CPKC’s single-line network reaching Canada, the U.S. and Mexico.”

CPKC executive vice-president John Brooks said in the same release Monday that “Richardson’s ability to run longer trains will mean more grain shipped per train, tighter cycles and more Richardson trains moving across our expanded, single-line network throughout the season.”

The move follows the completion in April of CPKC’s merger, which officially ties CP’s track to Kansas City’s lines in the U.S. and Mexico.

That single-line rail network will also make for a “seamless pipeline” between Richardson’s Prairie elevators in “durum-rich areas in Saskatchewan” and its U.S. durum flour milling operation, Italgrani, at St. Louis, CPKC said Monday.

“Furthermore, the combined network and markets in the southern U.S. and Mexico are opening new doors to Richardson for their grains, oilseeds and processed products.” — Glacier FarmMedia Network

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Turkey, Ukraine, Russia and the United Nations have been holding talks on ways to extend the deal brokered in July allowing the safe export of Ukrainian grain via the Black Sea. The deal is due to expire Thursday.

Of about 20 senior Ukrainian and international traders and analysts polled by Reuters at the GrainCom conference in Geneva, a vast majority said they expected a renewal of the deal, though possibly with some delay.

Nearly all the delegates polled said a much lower harvest expected this year had alleviated the pressure to export through Black Sea ports, and that alternative routes including rail, truck and exports via the Danube river would be able compensate.

Those routes are, however, generally much more expensive than shipping via the Black Sea.

Nikolay Gorbachov, head of the Ukrainian Grain Association, warned that without the corridor export logistic prices would surge and cut farmers’ margins so much that they would stop producing wheat and corn in big volumes.

Ukraine’s corn crop is forecast to total just 21 million tonnes this year, around half the 42.1 million it harvested two years before the conflict began, according to the International Grains Council.

Moscow has threatened to quit the deal over obstacles to its grain and fertilizer exports.

The Kremlin said on Tuesday that questions remained about Russia’s part in the agreement, and that it would have to make a decision on whether to renew it.

Dan Basse, president of Chicago-based consultancy AgResource, said on the sidelines of the gathering that there wouldn’t be a big impact on global supplies this year if the agreement wasn’t renewed.

“With a lower crop this year, it can all go out west through eastern Europe. The problem is that it will cost 15 per cent to 20 per cent more,” he said.

Under the pact to create a safe shipping channel, Ukraine has been able to export some 30.25 million tonnes of agricultural products, of which 50 per cent was corn and 28 per cent wheat. Other commodities shipped include rapeseed, sunflower oil, sunflower meal and barley.

“Do we need the corridor? I would say yes,” Stefan Florescu, global head of wheat trading at CHS, the largest U.S agricultural cooperative, told the conference. “But if we aren’t going to have it, are we going to find a solution to export everything via the EU export corridor? I would say yes as well.”

— Sybille de La Hamaide is a Reuters commodities correspondent in Paris; additional reporting by Nigel Hunt.

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Unifor, which represents about 3,000 CN employees, said Friday its members voted to ratify four new two-year collective bargaining agreements taking them through to Dec. 31, 2024. The tentative agreements were announced March 20.

“When we opened contract talks with CN last fall, while the company was reporting massive profits, we were insistent that rail workers deserve to be compensated well and treated with respect,” Lana Payne, the union’s national president, said in a release.

“This agreement represents a significant step forward for our CN Rail members, including important improvements in wages, benefits, and job security.”

“Despite the diverse crafts represented by this union, we have been successful in improving alignment on our path forward to deliver better and safer service,” CN CEO Tracy Robinson said in a separate statement Monday.

The four agreements cover members of CN’s Unifor Local 100, which represents skilled trades in mechanical shops, and Council 4000, which represents intermodal, clerical and mechanical workers and excavator operators.

Unifor said its national bargaining committees had been in negotiations with CN since last October, leading up to their previous contracts’ expiry at the end of December 2022.

The Unifor-led employees had voted in favour of strike action in early March and had been in a position to strike as early as March 21. However, the union said negotiators decided at that time to keep talks going rather than hand in the required 72 hours’ notice to trigger a work stoppage.

Despite the number of employees who would have potentially been off the job in the event of a Unifor-led strike or a lockout, CN had said in early March it would not expect any impact on operations, as it had “contingency plans in place and the safe operations of our railway will continue.”

“Coming out of a pandemic and with global economic uncertainty, the bargaining committee knew it had its work cut out for them but with the support of members from across the country, we stood firm and were able to negotiate a fair contract,” Local 100 president Cory Will said Friday in Unifor’s release.

Federal Labour Minister Seamus O’Regan on Friday tweeted congratulations to the company and union on their new agreements, adding “The best deals are made at the table.” — Glacier FarmMedia Network

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CN, Unifor Local 100 and Unifor Council 4000 on Monday announced they have reached four new tentative collective agreements to cover about 3,000 railway employees, who had voted earlier this month in favour of strike action.

The employees were in a position to strike as early as Tuesday (March 21) if 72 hours’ notice had been given — but Unifor said in a separate statement Saturday its team had decided to continue negotiating with CN in Montreal through the weekend.

The company and union both said no details of the tentative deals would be released publicly until ratification votes are completed. Unifor said Monday those votes “will be held in the near future.”

CN CEO Tracy Robinson said in a statement Monday the company is “very pleased to have reached these tentative agreements” and “has always been committed to achieving negotiated settlements to improve the conditions of this important group of employees.”

Unifor Local 100 represents skilled trades in CN’s mechanical shops, while Council 4000 represents intermodal and clerical workers, mechanics and excavator operators.

Despite the number of employees who would potentially be off the job in the event of either a strike or lockout, CN had said March 6 it would not expect any impact on operations as it had “contingency plans in place and the safe operations of our railway will continue.”

“These negotiations were fraught with challenges, including demands for concessions by CN,” Unifor national president Lana Payne said in a separate release Monday.

“With the solid support of the membership, the bargaining committees were able to stand up to this large profitable company and persevere to secure the tentative agreements.”

Unifor said its bargaining committees had been in talks with CN since October. The collective agreements for the affected employees all expired at the end of December. — Glacier FarmMedia Network

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The board, which oversees U.S. freight railroads, is imposing some requirements on the deal, which was agreed in 2021, including an “unprecedented seven-year oversight period along with extensive data-reporting requirements.”

The acquisition, which combines the sixth- and seventh-largest railroads operating in the U.S. by revenue, will create the first railroad providing a single-line service spanning Canada, the U.S. and Mexico. It is projected to add 800 new unionized operational jobs in the U.S. and will shorten the average length of trains by just under 20 per cent.

CP CEO Keith Creel said in a statement that the board’s decision “clearly recognizes the many benefits of this historic combination. As the STB found, it will stimulate new competition, create jobs, lead to new investment in our rail network, and drive economic growth.”

In the same statement, Kansas City Southern said the decision “is the catalyst for realizing the benefits of a North American railroad for all of our stakeholders.”

The decision is effective on April 14 and calls for reconsideration petitions to be filed by April 4. Calgary-based CP’s TSX-traded shares rose about six per cent to C$105.74. Kansas City Southern shares were transferred to a trust and the railroad has operated independently ahead of the board decision.

The STB said it expects the new single-line service will foster the growth of rail traffic and reduce emissions by shifting approximately 64,000 truckloads annually from North American roads to rail.

It also concluded that the deal will not increase safety risks in any meaningful way, an issue that has been raised in the wake of a recent Norfolk Southern derailment in Ohio. It noted CP has had the best safety record of any large railroad over the last 15 years.

The STB also approved measures to address “potential environmental impacts of the transaction, such as increased noise,” and it will require the railroad to justify “rate increases over a certain level” on some interline movements.

The deal will also foster new U.S. passenger railroad Amtrak service opportunities, the board said.

The new direct service will facilitate the flow of grain from the U.S. Midwest to the Gulf Coast and Mexico, the movement of intermodal goods between Dallas and Chicago and trade in automotive parts, vehicles, and other goods between the U.S. and Mexico, the STB said.

The board can issue orders to enforce required environmental mitigation measures and address capacity and maintain fluidity in Houston, Chicago and other congested areas, “including preventing potential merger-caused delays and service disruptions of commuter service in the Chicago area.”

This transaction is “end-to-end,” which means there are little to no track redundancies or overlapping routes, and the board said the move will reduce travel time for traffic moving over the single-line service.

At least two U.S. grain grower groups on Wednesday panned the STB’s decision, saying the combination would decrease competition for the rail-reliant grain sector.

“U.S. rail industry consolidation has led to poorer, not improved, service for agricultural shippers,” Vince Peterson, president of U.S. Wheat Associates, said in a release.

“In addition, we see extreme disparity in rates for wheat shippers. Rail rates over the last decade have increased exponentially and rates for wheat are higher than rates for other commodities even with similar handling characteristics.”

The U.S. National Association of Wheat Growers’ (NAWG) CEO, Chandler Goude, said in the same release that the group “maintains our concerns that the merger of CP and KCS will impede competition in the rail market and increase rail rates.”

— David Shepardson reports on the U.S. transport sector for Reuters from Washington. Includes files from Glacier FarmMedia Network staff.

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