The federal government's move to force rail companies to ship more grain from the Prairies is a good first step but may come too late to keep a backlog from hurting the bottom line, farmers say.
Ottawa announced Friday it will force rail companies to add more grain cars, a move that came months in to a long-simmering push by farmers to get a bumper crop to market. It will take weeks for rail companies to comply, and some farmers remain cash-strapped as they sit on stockpiles of different types of grain with the spring planting season drawing closer.
The fallout comes after what had otherwise been welcome news in the Prairies – ideal 2013 weather.
“If you could prescribe a perfect growing season, I think it was almost as close as it got,” says Levi Wood, 30, who farms near Pense, Sask. Farmers filled their silos before many of them turned to using large bags to store their crop, only to find there weren't enough trains to carry it all.
“It’s kind of all gone from there, it’s just been a pretty tremendous backlog,” said Mr. Wood, president of Western Canadian Wheat Growers, adding that farmers rely on shipping their crop to be paid. “When it doesn’t happen for a month or two months, our bills are still due, that’s for sure.”
Mr. Wood and other farm group leaders say they welcome Ottawa's move, which followed pleas from the Alberta and Saskatchewan governments, but warned it’s no silver bullet. It may be too late – delayed sales have left some farmers in a cash crunch, both because they can’t sell or they’re getting lower prices.
Another farmers’ group says it has seen a record number of applications for cash advances. That could mean fallow fields or less fertilizer when seeding begins in two months. “It’ll drop their yields, which isn’t really good for anybody,” Mr. Wood says.
Things also won’t be fixed quickly. Trains could take weeks to increase service, and farmers say the clock is ticking. The spring thaw could bring muddy roads that slow efforts for those who are able to ship by truck, while threatening all the grain that’s sitting in storage bags.
“It becomes a real problem with weather and moisture getting in there ... for some of the farmers, it will definitely have an impact out there,” says Art Enns, a farmer near Morris, Man., who also serves as president of the Prairie Oat Growers’ Association.
Farmers will be juggling the busy spring seeding season with continued efforts to ship the crop, he warned. Finally, there’s little hope the backlog will be cleared by fall, when the new crop begins to roll in. “There’s no easy answer on this, and it’s not going to be a quick fix. We all realize it’s going to carry over from one crop going into the new crop year,” Mr. Enns said.
Brett Halstead farms 4,000 acres near Nokomis, Sask. By this time of year, he’s typically sold 60 per cent of his crop. This year, he’s sold 40 per cent. Sales are a “mixed bag,” he says – malt, barley and oats are months behind schedule, while wheat is shipping. Nothing is predictable.
“It just leads to a cash crunch. You know, several months ago, farmers were pretty happy. They’d sold a lot of grain at harvest, they’d filled their bins, ‘this is going to be pretty good.’ Then they start contracting [to actually ship the grain] and they’re not able to move it,” he said.
Added Mr. Enns: “It’s basically you not getting a pay cheque.”
He and Mr. Halstead, president of the Canadian Canola Growers' Association, welcomed the federal announcement, though Mr. Halstead said it could have come sooner and that it’s been some time since rail companies have proven they can haul the amounts now demanded. “This will pass some day. It’s just a question of when. And if you’re in the middle of the storm, it’s frustrating,” he said.
A farmer’s worst outcome is to have no crop at all, Mr. Wood said. A record crop is still something.
“If we can’t get it going to market, the fact is it’s the same as having no grain. You’re not able to liquidate and generate cash-flow,” he explained, welcoming the federal move but saying he’ll wait to see how it plays out. “I think there’s been a fair amount of anger, anger directed certainly at anyone and everyone. But it’s very, very frustrating this year.”Report Typo/Error