Canada Markets

Will the Smaller 2015 Crop Help Railroads Get Back on Track?

Cliff Jamieson
By  Cliff Jamieson , Canadian Grains Analyst
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Friday's Statistics Canada production estimates suggest that the total prairie production of all grains will fall for the second year to 54.3 mmt, down from the high of 75.9 million metric tons in 2013 and the 2010 to 2014 average of 59.3 mmt. (DTN graphic by Nick Scalise)

Canada's Ag Transport Coalition, a group made up of a number of commodity groups along with the Inland Terminal Association of Canada and combined accounts for 90% of the prairie grain shipped, recently released two reports which sheds light on railway performance for 2014/15 along with week 1 results for the 2015/16 crop year.

The coalition released statistical reports for 16 weeks last crop year (week 21 through week 38) then reappeared last week with a crop year summary along with a report for week 1 of the 2015/16 crop year.

Data in the 2014/15 final report indicates Canada's reputation as a reliable supplier remains on the line, with CN Rail supplying 62% of the cars ordered for loading in the correct week while CP came in a distant second with only 36% of the cars spotted in the week ordered. In total, 94% of the cars ordered were spotted.

The week 1 report shows a continuation of the challenges faced in the past crop year. CN Rail spotted 75% of the cars wanted in week 1, while CP Rail supplied 62%, or 68% of the total cars wanted between the two railways. In total, the car shortfall totaled 2,007 cars.

Data also continues to show varying levels of service between railroads with respect to performance levels in competing corridors, as has also been an issue over the past crop year.

The attached chart shows the total production of all grains on the Prairies, with the most recent Statistics Canada production estimates indicated by the blue bar at 54.3 mmt, while the red bars represent the 15 years from 2000 to 2014. The 2010 to 2014 five-year average is calculated at 59.3 mmt. The smaller crop and potential rationing of crops given tight fundamental situations such as canola may allow railways to get on track to meet market demands, while also may present an opportunity for the industry to find ways for supply chain improvement.

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