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Canadian Grain Piles Up Amid Rail Bottleneck

Canada producers harvest third biggest wheat crop on record

2 Lisa Selfie December 2020 Headshot

Canada is harvesting a bumper crop this year, but shippers fear there aren't enough rail cars to transport it all, reports Bloomberg.

There were almost 2,400 outstanding grain-car orders for the nation’s two major carriers, Canadian National Railway Co. (CN) and Canadian Pacific Railway Ltd. (CP), according to the latest data from the Ag Transport Coalition.

That’s the worst backlog since flooding blocked access to Vancouver’s port in late 2021, stranding wheat and canola in the Prairies.

Canadian Pacific has fallen behind orders for three weeks and grain companies will have to defer sales if the trend continues.

CP said in an email to Bloomberg that the railway supplied more than 6,500 hopper cars last week and shipped 709,342 metric tons of grain and grain products, a 10% increase from a week earlier.

CN told Bloomberg that a two-day washout on a section of the railway’s network disrupted certain supply chains, but the company has resources in place to move anticipated grain volumes over the course of the current crop year.

History of rail disruptions

Shippers are worried about the railways’ ability to haul grain as Canadian farmers harvest the nation’s third-biggest wheat crop on record and 42% more canola than a year ago.

Canada’s harvest rebound comes as world grain supplies have been uncertain following the war in Ukraine and as extreme weather trimmed output in parts of Europe. Drought is also shrinking crops from the U.S. Farm Belt to China.

Last year, Canada's two major railways struggled to move its much smaller 2021 crop amid disruptions from wildfires, floods and extreme weather.

Western Grain Elevator Association calls for more transparency

Back in July, to ensure there are no weak links in Canada’s agriculture supply chain, agricultural groups called for increased transparency throughout Canada’s shipping logistics systems.

Fall 2022 represents the most important harvest in a generation, said Wade Sobkowich, executive director, Western Grain Elevator Association, in a statement.

“Grain processors and exporters have consistently invested to expand Canada’s capacity to store and move grain," said Sobkowich.

"A large crop is expected and demand for Canadian grain is on the rise. By implementing our plan, we can show that Canada’s Ready to do what we do best – supply quality grain to consumers here at home and around the world.”

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