Some positive trends for the grain and oilseed business… shipping looks better and marketing sees hope


It was only a few years ago that grain and oilseed producers were up in arms over the disastrous situation in moving their products to the west coast. Railroad companies were vilified for delays, neglect and favouritism in shipping that backed up millions of tons of cereals and oilseeds on the prairies. Now we hear that those same companies in last year’s shipping year moved more of those products to market than in any previous year. What a difference a couple of years makes, but it was somewhat predictable, the very basis to efficient and increasing rail shipping to the west coast is favourable weather. That proved to be the case, and considering the present mild winter progression this year may also see record shipments to the coast. Railway companies should be given credit (but they won’t) for bringing more new high capacity grain cars on stream, more locomotives and movement efficiencies with better turn around times at both ends. Grain companies also went on a building spree, constructing new terminals in the Vancouver area with one of them starting up recently. That increasing capacity is most impressive and the time may come when growers can’t keep up with more production. The only down side is with Union intransigence in loading vessels in the rain – more money will have to resolve that hurdle. Curiously, no matter how much more grain and oilseeds are shipped through Vancouver with the infrastructure improvements, there always seems to be a dozen grain ships at anchor waiting to be loaded.
The last few weeks has also seen subdued hope that the Chinese princess case may be mercifully resolved – a year after it started. The case finally came to court and is being deliberated upon; the best outcome would be that she is sent back to China and not extradited to the USA. If the latter happens the Chinese government may punish Canada even more and you can kiss-off any renewed canola shipments to China. Incredibly we still have canola industry folks and federal bureaucrats deluding producers at meetings that they are hopeful that technical discussions on canola contamination with their Chinese counterparts will resolve the embargo. I guess they have to play this sort of diplomatic charade. On the positive side canola exports have increased to other offshore markets. The recent thawing of the trade war between China and the US may have some indirect impact on canola marketing; the Chinese have promised to buy millions of tons of soybeans which compete in some markets with canola meal and oil.
One suspects that regardless of any new hope with canola marketing, grower planting intentions will be down for this coming spring. Hopefully, the odds are that western Canada will not have another weather and harvest disaster as was suffered through last year. But the growing fear that has evolved within the industry over the past few years concerns more government-imposed punishment, like carbon taxes and trade agreement bungling. Need I mention the outright inanity of the federal ag minister stating that grower bills providing clear legal evidence that carbon taxes have increased grain drying costs is not enough proof that those costs have actually increased. It boggles the mind, but I digress.
Back to be positive sees the amazing efforts to ever more technology improvements in seeding and harvesting equipment. One wonders if it will soon be impossible for any grains, oilseeds and pulses to come out the back end of a combine what with all the intricate sensors. Those countless thousands of Canada geese that descend on harvested fields to feast on grain spillage will soon have to head south or starve to death – either way no loss there with those pests. One notes an option to install compact grinding mills on the back end of combines designed to destroy weed seed viability – that will severely impact weed spread for years to come. That could reduce herbicide use.
Another impact on grain prices may be the ongoing wild fire disaster in Australia. No ones takes delight in that catastrophe, but it may well impact grain production from that country, which will impact markets. And finally, in what may be a dubious positive trend, the world population will probably increase by another 85 million people next year, all of whom will need to be fed. Luckily for them increasing food production from Canadian farmers and ranchers will help feed them once again. Will Verboven is an ag opinion writer and ag policy consultant.