Tags: Wall | grain | Canada | rail

Saskatchewan Premier: Grain Crisis in Canada Could Impacts Markets Worldwide

By    |   Monday, 03 March 2014 02:23 PM

Canada faces a grain crisis due to cold weather and transportation problems that might impact markets worldwide.

The problem is so severe that General Mills will run out of oats to make Cheerios in two or three weeks, Saskatchewan Premier Brad Wall said at a conference in Ottawa, the Toronto Star reported.

Exceptionally cold weather this winter has stopped rail transportation at times, and railroads have turned to transporting more oil. In other provinces, railroads are transporting more manufactured goods. Plus, railroads have reduced their numbers of locomotives and workers, Wall told CBC News.

Editor’s Note:
38 Trades That Could Turn $1,000 Into $49,000

"This is sort of a perfect storm," he noted.

"The federal government might have to get fairly aggressive here," he said, adding the government should consider penalizing railroads and other assertive measures to encourage them to transport more grain. "We should be looking at those alternatives and quickly."

Canada has two nationwide railroads — Canadian National and Canadian Pacific — transporting grain.

"This is a duopoly," Wall explained. "There's not a lot of competition out there."

In addition, government rules limit the railroads' revenue from grain transportation. "I don't think the cap should be removed, but maybe we need to modernize that cap."

A long-term solution is building more gas pipelines in order to free railroads to transport more grain, he argued. To that end, Canada should encourage the United States to approve the Keystone XL Pipeline.

Because of rail transportation problems, 50 ships are waiting for grain in Vancouver harbor. Foreign customers are turning to the United States for their grain purchases because they believe Canadian grain delivery may be unreliable.

Advocating government intervention was an unusual stance for a conservative, but Wall said the crisis warrants government action, the Star reported.

"What's at stake is the brand for our country in terms of reliability," he said at the Ottawa conference organized by the Manning Centre, a nonprofit promoting the Canadian conservative movement.

Wall recently appointed a delegation of agriculture, economy and infrastructure ministers to meet with grain and rail companies.

"The delays in moving grain have led to lower prices for our producers at the farmgate and are harming our reputation as a reliable supplier of agriculture products throughout the world," he stated in the press announcement

"We want every possible avenue explored to ensure our producers have the ability to market and deliver their grain in a timely manner."

Editor’s Note: 38 Trades That Could Turn $1,000 Into $49,000

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Canada faces a grain crisis due to cold weather and transportation problems that might impact markets worldwide.
Monday, 03 March 2014 02:23 PM
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