Watch the video above: suppliers are also feeling the pinch of farmers not being able to get grain shipped
SASKATOON – A strike by the union representing CN rail employees has been avoided after a late agreement was reached Wednesday night. It’s a relief for farmers but the grain backlog still exists and at this point, it’s affecting more than just the producers.
It’s the middle of winter and farmers are busy planning for seeding. A normal cycle sees producers harvest in fall, sell that grain throughout winter and use that cash, for spring input. With the rail system extremely backlogged, there’s no cash on hand to purchase what’s needed and the repercussions are being felt down the line.
“As we get closer to spring the crunch is going to hit,” forewarns Travis Dreger, who works at Wendland Ag, supplying fertilizers to farmers. At a cost between $70 and $100/acre, fertilizer runs up a big tab.
“We’re seeing a lot of activity, a lot of conversations, a lot of guys trying to plan, they just don’t have the cash today to write the cheque to do the business and close the deals off,” Dreger said.
Many farmers are forced to turn to financing. Farm Credit Canada is providing loans where needed and also offering extensions. With bills from last year looming FCC has extended the payment date from Feb. 15 to March 15.
“Is it going to be enough for every individual producer?” questioned Garnett Volk with FCC. Pondering his own question, even he doesn’t seem sure. “We don’t know.”
The backlog has some grain terminals booked full well into the end of summer.
Last fall, once bins filled and additional storage was needed, grain bags became a common site on the prairies. Flaman Sales sold an unprecedented amount of the bags but according to Mitch Flaman, the bags are meant to be a short term solution.
“Their grain is still sitting in bags in the middle of the field and there’s deer that come up to it.” Flaman said the deer are cold and hungry, tempting them to hoof holes in the bags and eat the grain, leaving farmer’s looking for a better solution.
“We’re going to have a carry over of grain that we’ll need to store somewhere,” Flaman said.
A bin that holds 20,000 bushels costs about $25,000. It’s a hefty price considering producers are already strapped for cash as the industry tries to adjust to larger crops and a poorly functioning grain export system.
Rail companies blame the backlog on the train tracks, bad weather and an increased demand for oil transport.
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