Keep the faith as the roller coaster called the world keep turning
First the effects and fallout of the two-year pandemic that lingers, a 60 per cent crop in Western Canada, the horrific killing of men, women and children in Ukraine, and now 3,000 follow-the-leader rail strike that could cripple a mostly fragile economy. (Sunday, March 20, 2022 time of this writing and publication will hit the mailboxes Friday, April 8th)
Canadian business and agricultural leaders warned a work stoppage at the railway would be ‘catastrophic’ for the flow of goods across the country, at a time when supply chain disruptions have already driven up food costs to a level not seen in almost 13 years.
Come 2022 growing season, Canadian grain farmers are under more pressure than usual to produce a good crop since Russia’s invasion of Ukraine has destabilized farming operations in one of the world’s most important grain-growing regions. When the world needs more Canadian grain, a rail stoppage would directly damage Canada’s capacity to act as a reliable source said the Canadian Federation of Agriculture, representing more than 200,000 farmers.
The strike involving nearly 3,000 engineers, conductors and other train employees took effect at 1 a.m. ET Sunday, after the company and the workers’ union dug in their heels over a long-simmering contract dispute.
Well, what do you think? I call it greed, mismanagement and lack of government leadership.
Ryan Dyck territory Manager-Manitoba with ADM Agri-Industries located in LaSalle, MB said ADM advised farmers to lock in fertilizer positions since May of 2021 for spring of ‘22.
“Get your logistics locked in, manage the risks you can if you haven’t yet, and stop trying to save a few dollars by waiting; it won’t pan out.”
That is great advice from Ryan and his company. Do what you think is best under the circumstances and don’t try to outguess the system is what that said to me.
I asked Jonathan Dredger LeftField Commodity Research if we have a strike; what’s your first reaction or the marketed factored it into the prices?
It’s always a little challenging to know how this will play out.
“From a grain market perspective, a part of me says if a strike, this would be the year to do it and maybe this time of year. Simply because our small crop from last year means that we have no choice but to export much less grain than last year. Because a lot of that moves earlier in the season we have crops like canola or some others where weekly volumes are a fraction of what they would typically be at this time of year.
Don’t get me wrong, there’s absolutely nothing good about it, but I guess there is an element if something like this were to happen, at least in terms of shorter-term grain movement, it’s better than it’s this year than some others. However, that doesn’t mean it doesn’t create challenges for shippers or exporters or adds more uncertainty on top of all the uncertainty we already face. Just because the volumes are smaller, it may mean that there’s less potential backing up in the system, but that doesn’t mean that you don’t still have a big problem for those trying to execute what sales they’re making.
Harry: There is corn supposedly coming in from the US and fertilizer.
Jonathan: Yeah. Oh, very true. The point you make about the stuff coming into Canada is very relevant. With the corn imports, it’s a year when there’s so much corn coming in because feed grain supplies are just so incredibly tight. So for that sector, and again, on a widespread basis, the impact is smaller, but that doesn’t mean that it’s not a huge problem for individual companies, circumstances, or farmers. Then as you mentioned, Harry, which is so true is it’s just one more thing on top of just a tremendous amount of uncertainty that agriculture globally is facing, including us in Western Canada.
“So on its own, it’s less severe than it might have been in other years, but it’s just compounding other challenges and a significant concern.”
Harry: I mean, obviously the powers that be within railroads and within the unions, I mean, they all have their reasons. They all have their bluffs and whatever else, but I guess they know precisely what you and I know. There isn’t a lot of grain. So, if we’re going to strike, let’s strike now.”
Nevertheless, the much-talked-about phrase ‘supply chain’ will undoubtedly suffer and prices will sky-rocket one day and plummet the next day.
Keep the faith, my friends; it is all we have to hang on in some cases. •