As harvest starts to wrap up in some areas of the province, producers can expect their grain to move a little quicker than it did following last year’s record harvest.
But they’re not out of the woods yet.
“Alberta’s starting to fill up again,” Mark Hemmes, president of Quorum Corporation, said in an Oct. 2 interview. “In the last six weeks, we’ve gone from 500,000 tonnes to over 900,000 tonnes in storage. We’re at 83 per cent of the working capacity right now. That’s a little higher than we’d like to see.”
Grain delivery slowed down for three weeks in September, but picked up again toward the end of the month, said Hemmes, whose company is Ottawa’s grain monitor.
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“We dropped off a bit there for a while, but it’s largely because we ran out of grain,” said Hemmes, adding that it’s “all relative.”
“When you’re talking about deliveries slowing down, it slowed down to 125,000 to 180,000 tonnes a month. When you look at what the stocks were, there was still over 900,000 tonnes in the elevators in Alberta. When it hit its low point, it was at about half a million.
“That’s a lot of grain.”
With the new crop coming off, numbers are starting to bounce back up to normal levels.
“A normal delivery pattern would be between 310,000 and 350,000 (tonnes),” said Hemmes. “The last two weeks have been in the mid-330,000s.”
The large carry-over of last year’s grain is still an issue, he said, although the situation is a lot better than it was in spring.
“The carry-over in Alberta is not down to what I would consider normal amount,” said Hemmes.
“Normal carry-out for us would be 2.8 million tonnes total, and we’re around 4.0 to 4.5 (million tonnes) right now.”
The federal government’s order-in-council that threatened fines for Canada’s major railways if they didn’t move at least 500,000 tonnes each weekly “really helped bring it down,” he said.
“If you go back to late spring there when the order-in-council kicked in, both CN and CP were looking to source as much grain as they possibly could out of Alberta to go to the West Coast because that’s the most efficient sourcing for them,” said Hemmes.
“Because they’ve got to meet a threshold, they look to move the grain that’s easiest to get to and will turn their cars over faster. They’re looking at optimal asset utilization and moving as much grain as they can as fast as they can.”
As a result, Saskatchewan producers have suffered from slower service, he said.
“In Alberta, we’re a lot more fortunate than in Saskatchewan. In Saskatchewan, there’s a bigger carry-out, and it’s big enough to worry about.”
Alberta does have some trouble spots, particularly in the deep south and the Peace region.
“Those are the areas where it’s hardest to get car supply to,” said Hemmes. “Once we get off the main line, it’s the same rationale as movement into the States. You’re starting to add days into the cycle time.”
The same problem is plaguing grain destined for south of the border.
“If they’re going to move grain into Vancouver or Prince Rupert, they’re going to get a turnover of 14 days, or sometimes even better,” he said. “But if they’re moving into the States, the car cycle will probably be north of 25 days, maybe even exceeding 30 days.”
Producer cars are an even lower priority, he said, again because of the inability to turn them around quickly.
“There’s going to be a challenge with producer cars this year. We came out of last year with quite a bit of unfilled orders,” he said.
“(Both railways) have a lot of cars, but there isn’t an endless supply. If they’re going to be allocating resources and assets to anything, they’re going to do it to the ones that will allow them to best meet the thresholds that have been set.”