REGINA – Federal Agriculture Minister Gerry Ritz suggests shipping grain south may not be the solution to clear a backlog of grain from a record crop sitting in bins across the Prairies.
For starters, he says, railways don’t seem receptive to the idea.
“The only fly in the ointment on moving any product south is the railways have arbitrarily decided they’re not going to run cars that direction, for whatever the reasoning is,” Ritz said Friday in Regina.
“That’s part of the problem. They are a service industry that does not care much about service, so we’re trying to re-convince them that customers’ demands should actually help them form their business plans.”
Saskatchewan Premier Brad Wall said this week it might be time to look at shipping grain south through the United States instead of east and west to Canadian ports. Wall was voicing his frustration over a grain backlog that Saskatchewan Agriculture has said could result in the loss of billions of dollars.
Grain-handling companies have told the province that it may be well into 2015 before the backlog is cleared.
Ritz said a lot of product already goes south.
“If you’re talking strictly going south to feed mills, we’ve always done that. We’ve shipped grain right through across the States into Mexico and on into South America,” he said.
“Having said that, if you’re talking then about using northern tier elevators to hit port on the west coast of the States, some of that happens now, but not to any great extent. People that are talking that that’s the only way forward have to recognize that there’s logistics problems in the U.S. at this point right now too.”
Winter also hits across the northern U.S., Ritz pointed out.
Railways have largely blamed the backlog on the weather. They say they have to use shorter trains during the cold to ensure brakes can be used properly — and that means less capacity.
Canadian National (TSX:CNR) said in an email to The Canadian Press on Monday that it’s doing its best to move the record crop to market. The company said its goal is to return to a more normal level of winter service as soon as extremely frosty temperatures abate.
Ritz said he isn’t convinced that the cold is the problem.
“We’ve never totally, as a government blamed, the weather. I mean the railways do. I certainly understand the idea of shortening trains because the air lines freeze up that far back. I get that,” said Ritz.
“The point then is, let’s run more trains. If you can only run two-thirds of the distance, then you need a third more trains in order to maintain that service.”