Grain freight system gears up for harvest
Source: Resource News International
Published: September 26th 2008
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Canada's grain handling and transportation system has begun to gear up to deal with the 2008 harvest, with most market participants hoping the infrastructure holds.

"Trying to move all the barley, wheat, canola, peas and other commodities that was sold for fall delivery through the West Coast of Canada is like syphoning a large body of water through a garden hose and there is only so much that the hose can handle," Mike Jubinville, an analyst with the farmer advisory service, ProFarmer Canada said.

Traditionally, September to December is the heaviest grain handling and transportation period in Western Canada, with Prairie harvest operations in full swing and farmers making off-the-combine deliveries.

"There are going to be logistical issues to contend with, but hopefully the weather will co-operate with us and allow for the smooth transition of Prairie grain and oilseeds being hauled to the West Coast for fast and efficient loading of vessels," Jubinville said.

If there are disruptions, he said, hopefully they will be short.

"Activity in Canada's grain handling and transportation sector certainly has begun to pick up and for the most part, movement via the western corridor has been quite fluid," said Rick Steinke, director of logistics for the Canadian Wheat Board.

Steinke said the system is not being put to the test as it was last year, when there was a lot of feed barley to move because of sales made by the private sector during a very brief period.

"The CWB's control on barley sales was briefly removed by the Canadian government (during which time) the private sector made some large feed barley sales," he said. The sales, while honoured by the CWB, presented some extreme logistical problems in the West Coast transportation corridor.

"We don't have those issues to deal with this fall as the market environment has been stable," Steinke said.

Export sources indicated that the private sector sold 1.4 million tonnes of feed barley from Western Canada to Saudi Arabia during the brief period of time when the monopoly that the CWB has on barley exports was removed. An appeal of the federal government's move resulted in a quick reversal of the decision.

"Normally, Canada's grain handling and transportation system ramps up during the last half of September/first half of October," said Lach Coburn, manager of West Coast shipping for Cargill Ltd. "However, it appears the real test of the system will now come towards the end of October."

On again, off again

The "on again, off again" harvest of grain and oilseeds in Western Canada has not really challenged the system yet, he said.

Coburn said there have been some small delays for vessels waiting to load at the Port of Prince Rupert and some at Vancouver, but for the most part movement has been manageable.

"It's a bit early to judge whether the system will meet the challenge or not," Coburn said noting that there seems to be enough information on the table about program needs and planning among all necessary participants.

However, he said, the biggest issue that the industry needs to avoid is bunching -- and that goes for vessels as well as rail cars.

"A properly spaced out export program would be ideal as well as be instrumental in keeping the system flowing smoothly," Coburn said.

Kelli Svendsen, with Canadian National (CN) media relations confirmed that grain and oilseed movement on the railway company's lines has been slow to start because of the delay in harvest activities in Western Canada.

She would not comment on whether CN had leased U.S. rail cars to help with the expected seasonal push of grain from the Prairies to West Coast terminals.

Officials from Canadian Pacific Railway (CPR) were not available for comment despite repeated calls.

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