Higher yield crops will again test the supply chain, says Wheat Board
Ian White, head of the Canadian Wheat Board, says last year's grain-shipping shenanigans put a focus on how well the rail system functions
MONTREAL—The ability of Canada’s transportation network to move Western Canadian grain will continue to be tested as higher-yielding crops add volume to the system, according to the head of the Canadian Wheat Board.
“I think we could see the grain production in Western Canada be on a good, steady growth path and that means that we’re going to have to find the logistical means to get that crop from the Prairies to customers,” Ian White said before participating in the April 1 opening of the St. Lawrence Seaway.
Western farmers have grown large grain crops in the past few years, especially in the record 2013 season when a bumper crop prompted complaints about the shipping performance of Canada’s two major railways and resulted in an intervention last year by Ottawa.
Transport Minister Lisa Raitt and Agriculture Minister Gerry Ritz said the government wouldn’t extend that unprecedented step taken a year ago to impose minimum grain volumes, adding that grain now is moving adequately through the system and the new grain crop is of average size.
Although the grain shipping system now is back to normal, White said the move “focused everybody’s attention” on the need to ensure the supply chain functions well as pressures grow to deliver more grain for export.
Canadian National Railway and Canadian Pacific Railway have been critical of the federal government’s decision to impose minimum shipment volumes. They moved more than 50 million tonnes of grain in 2014, exceeding the minimum volume requirement by 5.5 million tonnes.
The wheat board, which is in the process of developing a privatization plan to be implemented in the next two years, is investing up to $200 million to buy new Great Lake ships and grain-handling terminals.
The Chinese-built CWB Marquis is making its maiden voyage and will become the first vessel to pass through the seaway in 2015. A second Equinox-class vessel, costing about $30 million, will arrive later this year, joining other new ships being added by several companies as part of an overhaul of the Great Lakes fleet.