Grain Sale Losses Skyrocket as Rail Backlogs Continue
A backlog of grain rail car orders in Canada tops 60,000, 8 times more than a year ago, causing an estimated $3.5 billion in lost sales to date (Edmonton Journal). Many farmers are blaming Canadian National Railway and Canadian Pacific Railway for favouring the more lucrative transport of crude oil and other dangerous goods over hauling grain (see this link).
The backlog has resulted in reduced grain prices and increased transport costs. The Executive Director of the Western Grain Elevator Association said, “This is the highest backlog ever.” Many farmers aren’t even able to move their crops to nearby grain elevators because they’re full. One Manitoba farmer hasn’t been able to sell any of his bumper wheat, canola, barley or oat crops, and the delay means $200,000 in lost revenue, as grain prices plummeted.
Prairie farmers had record harvests in 2013 of wheat, canola and corn, and increases from multiple crops, but the rail backlog has quickly turned the good news into bad news. Provincial and federal politicians are angry and have demanded the problem get fixed, including penalizing CN and CP for breaking their grain hauling commitments.