Canadian Minister of Agriculture, Gerry Ritz, announced in the first week of February that a new stream of data will have to be reported by the railroads so as to increase transparency in the industry and hopefully alleviate some of the frustration currently held by many. Some of the new requirements are focused around weekly railcar order fulfillment, including cancellations, car orders accepted by railroads, & car orders by all grain companies. Other detailed information proposed include grain railroad traffic to various destinations, weekly port terminal unloading performance, and data on arrival and loading times. Ultimately, in my opinion, this “big data” plan is the right move and I agree with Minister Ritz that the proposal will help improve “all aspects” of the supply chain, not just the railroads. Putting the plan into action will be the real challenge though, especially since 3,000 of C.N. railroad’s conductors, yard workers, and other employees almost went on strike. At the end of the day, the supply chain is like a record at a high school dance: if it’s broken, no one is going to get out on the dance floor and make any moves.
If Statistics Canada is right, there’s a lot of grain still out there: as of December 31st, 2013, total grain still available is up almost 30 per cent from a year ago as big yields this fall significantly increased the amount grain held on-farm. Canola stocks came in at a record 12.6 million tonnes, more than 55 percent higher the 8.1 million tonnes held at this time last year, and practically 93 per cent of this inventory is still being held in storage by farmers! (The real question is how much of it is spoken for?) Total wheat stocks rose to a 20-year high of 28.4 million tonnes, up almost 38 per cent year-over-year, while the supply of oats is up almost 40 per cent to from 2012 with 2.9 million tonnes still available. Rounding the complex out, barley stocks are up 27 per cent to 6.7 million tonnes, peas are up seven per cent to 2.2 million tonnes, flax available supply is up almost 23 per cent to 505,000 tonnes, while lentils, rye, and canary seed stocks are all down 23, 38, and 28 per cent respectively to 1.14 million, 122,000, and 81,000 tonnes.
All this being said, I attended the Saskatchewan Ag Trade Summit February 4th and 5th in Saskatoon and the most consistently-discussed topic was (surprise, surprise!) transportation. As grain railcars are reportedly delayed four-to-five weeks on C.P. lines and six-to-eight weeks on C.N.’s lines, the opportunity to move grain via grain railcars is limited. The other most consistently-discussed thing heard at the Summit was cultivating more relationships through more conversation and collaboration. Everyone from Canadian Ambassadors to Canadian Trade Commissioners to producer groups to grain company executives – they all touched on opening dialogues and asking questions. Another theme heard often was putting boots on the ground in markets that Canada is looking to build more of a presence in. This means going to the likes of Indonesia to shake hands and listen to what these markets are looking for. In all reality, going dancing can be fun, but it’s a lot more fun if you have a partner.
Brennan Turner is originally from Foam Lake, SK, where his family started farming the land in the 1920s. After completing his degree in economics from Yale University and then playing some pro hockey, Mr. Turner spent some time working in finance before starting FarmLead.com, a risk-free, transparent online and now mobile grain marketplace (app available for iOS & Android). His weekly column is a summary of his free, daily market note, the FarmLead Breakfast Brief. He can be reached via email (b.turner@farmlead.com) or phone (1-855-332-7653).
— FarmLead Breakfast Brief