An Interesting Op-Ed on railways and grain co's.

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An Interesting Op-Ed on railways and grain co's.

Mar 13, 2018 | 14:25 1 Was interested to read this Op-Ed today. According to this the blame may not lie with the railways.


"Bill C-49: Helping the railways farm the farmers

Here we go again! Some prairie farmers cannot ship their grain. Grain companies and their friends are blaming the railways for not getting the grain to port. After months of railway lobbying, the federal government is pushing new transportation legislation, claiming Bill C-49 will punish the railways for neglecting grain shipments. Yet this legislation effectively deregulates those same railways. The railways are quiet and the grain companies are happy. Anyone paying attention should notice a lot wrong with this picture.

Is it really true that prairie grain is not moving to port? If you believe the grain companies and their friends in the Ag Transport Coalition, the railways are ignoring their rail car orders. Yet, the more grain the railways haul, the more money they make, so this claim does not meet the smell test.

Measuring grain movement is a fairly simple task. The Canadian Transportation Agency (CTA) and the independent grain monitor, Quorum Corp. are objective sources of information. Every December the CTA audits the railways and looks at how much export grain they move annually. As of Dec 31, 2017 the railways moved 43.2 million tonnes of grain to port, up 6.9% compared to 2016 -- more grain than ever. Not bad for a fall and early winter with record rain and snow in the six mountain ranges between the prairies and the west coast!

On March 6, 2018 Quorum reported “Year to date Western Canadian shipments from port terminal elevators at Week 30 are 5% lower than the same period last year and 1% lower than the 5-year average.” While almost rounding errors, 1% less is still a lot of tonnage, however, remembering India imposed high tariffs on Canadian pulse exports, it is no surprise overall shipments are slightly lower.

The numbers show the railways are doing a good job of moving grain to port. That has not changed in the last three months, let alone the past year. Is the constant buzz from some farm groups that should know better simply a reaction to individuals who can't deliver to their local elevator? Since the system is delivering enough grain to port, we must conclude that grain companies are ordering cars based on priorities other than meeting local farmers' requirements.

Why? Grain companies can use local car shortages as an excuse to pay farmers less for their grain. They get away with it because almost two-thirds of prairie delivery points are served by just one grain company, making farmers captive to the company at the closest delivery point.

More than one farmer has heard something like the following from an elevator agent shedding crocodile tears: “We’re so sorry the price is down and you’ve heard how the railways are not moving the grain, but I’ve got a little space in my elevator if you need the money and can live with the higher basis.” Dazzled by the pseudo-economic term “basis,” the farmer sells for less and the grain company pockets the difference.

When the farmer-controlled Canadian Wheat Board (CWB) was responsible for selling grain it optimized the system to return the maximum amount of money to farmers and organized grain shipments to maximize the shipping capacity of the overall system. The extra money was passed back to farmers. In the last nine years of the CWB-controlled system, demurrage charges were near zero and usually offset by despatch earnings for getting ships loaded ahead of time.

Without the CWB, the grain companies are in a “no lose” game with prairie farmers captive to their delivery points. They use their local monopolies to maximize their own profits while blaming the railways and charging farmers basis for any extra costs they might incur.

By accepting the blame for plugged elevators, railways position themselves to lobby for further deregulation. Thanks to Ottawa, they may well be successful. With Bill C-49's amendments to the Transportation Act creating mile-wide loopholes for the railways, the idea any grain company is going to offend the railways with a reciprocal penalty or court case when they can just take it out of the farmer's grain cheque is beyond stupid - especially when 90% of prairie delivery points are serviced by just one railway.

Instead of deregulating the railways via Bill C-49, the government should be clipping the grain companies’ market power over farmers through regulation. Bill C-49's amendments to the Transportation Act do nothing but add the railways to the list of businesses “farming the farmers.” Since the CWB was killed, the grain companies are smiling all the way to the bank and the amended Transportation Act will soon let the railways join them -- unless the Senate provides sober second thought.
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Ken Larsen is a member of the National Farmers Union, Region 7 (Alberta) and edits the Canadian Wheat Board Alliance web site. He farms with his family west of Red Deer, Alberta. Phone (403-746-5792)


References:
Canadian Transportation Agency Determination No. R-2017-210 – Maximum Revenue Entitlement revenue for 2016-17 crop year
Grain Monitoring Program Weekly Performance Update. March 6, 2018 For Grain Week 30 (2017-18 CY) Reply With Quote
Mar 13, 2018 | 15:11 2 Be interesting to see the stats on how much grain, how far behind and at which individual elevators are actually behind on taking contracted grain. Reply With Quote
Mar 13, 2018 | 15:26 3 Lost me at CWB Reply With Quote
Mar 13, 2018 | 15:43 4
Quote Originally Posted by ShawnM View Post
Lost me at CWB
I made it all the way to No F$&@ing Use Reply With Quote
Mar 13, 2018 | 15:46 5 I smell bullshit when I hear almost no demurrage. Sounds like an NFU, NDP, CWB,etc written paper. Reply With Quote
Mar 13, 2018 | 15:52 6
Quote Originally Posted by dalek View Post
I made it all the way to No F$&@ing Use
Me too when I saw that. Good way to ruin an article mentioning that. You’d have to be in a drunken stupor to think the ___ handled crappy shipment any better. Article is like those ones on Facebook that start out quite interesting then turn out to be advertising for an online casino. Reply With Quote
Mar 13, 2018 | 16:28 7 Turned into a Darwinism post.

"Jump in front of the oncoming bus it's safe" says the spokesman for CPC.

"Don't, it's dangerous - you risk being killed" says the spokesman for the NFU.

Oops! a lot of Agrivillers just got wiped out - can't help stupid. Reply With Quote
Mar 13, 2018 | 17:09 8
Quote Originally Posted by grassfarmer View Post
Turned into a Darwinism post.

"Jump in front of the oncoming bus it's safe" says the spokesman for CPC.

"Don't, it's dangerous - you risk being killed" says the spokesman for the NFU.

Oops! a lot of Agrivillers just got wiped out - can't help stupid.
So how much of your farm income is from wheat grassy ? Reply With Quote
Mar 13, 2018 | 17:58 9
Quote Originally Posted by furrowtickler View Post
So how much of your farm income is from wheat grassy ?
It’s raining out. NFU - “Blame capitalism! Vote NDP”
Snowing. NFU - “Blame the CPC! Vive socialism!”
Aliens attack earth. NFU- “it’s the damn capitalism! Pass the joint around the circle! Screw Monsanto” Reply With Quote
Mar 13, 2018 | 18:03 10
Quote Originally Posted by furrowtickler View Post
So how much of your farm income is from wheat grassy ?
Zero - but I don't see why that should detract from having an ability to post/share/ alternate opinions on the current grain movement problems. Reply With Quote
Mar 13, 2018 | 19:00 11 on a more interesting point about rail is bhp billiton Jansen is buying land from new mine straight south to the USA. Reply With Quote
Mar 13, 2018 | 19:59 12 What NFU drivel completely devoid of facts. How great the CWB was; esp back in the day when they only allowed delivery of six bus/ac all year. There was huge demurage some years. Selective memory.
Clearly no knowledge of the ATC and how that data is collected, and that it represents over 90% of movement.
Is it different than railway data? Sure is. It measures actual demand and actual car spotting/movement not the reduced capacity the railways compare their numbers to
And captive? Yes, some areas more so then others (Peace country ie) but others have 4 or 5 options on two rails within 40 miles. So a big trip for the three ton I guess

Most farm groups have supported the changes C49 brings, after considerable research, after the review. Is it everything and perfect of course not but most think it’s better. It’s gotta get passed. Too bad the Libs refused to separate the grain/rail section out as it’s the air transport stuff in part that the holdup is.

Western Cnd rail has had issues for more than the half century I’ve been alive. Be nice to strive for improvement rather than long for the good old days. Reply With Quote
Mar 13, 2018 | 20:46 13 Divide and conquer still seems to be an effective strategy for government railways and grain cos. ...keep up the good work fellows. ... Reply With Quote
blackpowder's Avatar Mar 14, 2018 | 00:01 14 Reply With Quote
GDR
Mar 14, 2018 | 00:34 15
Quote Originally Posted by blackpowder View Post
I think she is confusing climate change and hot flashes! Reply With Quote
Mar 14, 2018 | 03:18 16 same as grass i do not deliver wheat in canada so i should butt out.

but with my extrasensory perception after reading first paragraph hmmmm this is written by a broken down single desker who will say how good things were.


guess ive been a bit of a troll, but sorry could see it coming a mile away or actaully 8700 miles away. Reply With Quote
Mar 14, 2018 | 06:12 17 Lots of alternative delivery points in our area and still farmers and grain companies wait. It doesnt seem as bad as 2013 but the crop wasnt nearly as big locally either. I have had a loaded railcar sitting for four weeks on the siding it was loaded at. Three more ordered and waiting for over a month from when they were supposed to be spotted. It will hapoen just in time for road bans im sure. Cant blame grain companies for my problems. Reply With Quote