It is interesting how well the Canadian system can move grain when the commodity isn鈥檛 competing with other higher value loads as much as normal.
It was reported recently Canada set a new weekly wheat export record in week 40 of the 2019-20 campaign, according to the Canadian Grain Commission. According to a Western Producer article terminal elevators shipped 926,000 tonnes of wheat and durum, shattering the previous record of 691,000 tonnes set the same week the previous crop year.
The numbers are interesting because it shows two things; one there is obvious demand for wheat.
That isn鈥檛 surprising given the COVID-19 pandemic. You only had to go to a grocery store in Saskatchewan over the last couple of months to know there were times the flour shelves have been scantily stocked, if not completely empty. People recognize flour as a key food product should there be general food shortages and stocked up on their home supply.
So it stands to reason the demand for wheat on a worldwide basis would be stronger than usual this spring as importing countries add to their stocks of the commodity to ensure there is enough bread to feed their citizens.
But, that is of course only half the answer as to why the record movement has occurred. It鈥檚 important to have demand, but there have been times in the recent past where there were sales to meet and the system couldn鈥檛 move the grain from farm to port.
The bottleneck has largely been the rail system.
So why are railways able to move the big numbers now?
Simply put, there is greater rail capacity right now. It鈥檚 not that rail companies are necessarily making handling grain as a higher priority.
It鈥檚 also not because the system has added capacity in terms of rolling stock.
There are simply less forestry and oil and gas products moving, so those products are not competing for rail cars due to COVID-19.
Of course this sort of dual anomaly will not last.
Demand fueled by fear of shortages, or hording at a national level will not continue once the pandemic is brought under some semblance of control by better science.
When the science does advance to create vaccines, or better treatments for COVID-19, the demand for oil, gas and other products will return to more normal levels, and that will have rail companies dedicating its rolling stock to the higher valued products, pinching the supply of cars and engines to move grain.
The blip shows what can happen, but it will not be a new norm.
Calvin Daniels is Editor with Yorkton This Week.
