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SERVING MANITOBA FARMERS SINCE 1925 | Vol. 72, No. 10 | $1.75 March 6, 2014 manitobacooperator.ca
Manitoba highest-cost processing potato producer: McCain Growers, who are negotiating 2014 prices, don’t think the company’s figures are current By Allan Dawson co-operator staff
Ritz says railways should face ‘consequences’ over derailed grain transport The railways have decided allocating cars to move Canada’s bumper crop of oats to U.S. customers isn’t a priority, which is forcing millers to look elsewhere
M
anitoba potato farmers could face steeper c u t s i n contracted potato production unless they can become more cost competitive with other areas of North America, a senior official with McCain Foods says. Christine Wentworth, McCain Foods’ vice-president of North America agricultural procurement, said in a recent interview Manitoba produces the highest-cost processing potatoes in North America. “The Manitoba region is uncompetitive today and so the future of processing potato growing in Manitoba, at this point, is in the hands of the growing community,” Wentworth said. “It is at a critical point within the potato industry in Manitoba See POTATOES on page 6 »
Tarped piles of wheat stockpiled outside of Paterson Grain facilities north of Winnipeg and near Morris were initially indicative of this year’s bumper crop. But as winter drags on, they’ve come to symbolize the deepening grain transportation snafu. The company has hired a contractor to move the piles into its terminals over the next several weeks. Photo: Greg Berg
POTATO PRODUCTION FOCUS
By Shannon VanRaes co-operator staff
Pgs. 52 – 55 »
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T
he good news? Oats are still incredibly healthy. The bad news? Good luck getting them to market. With empty ships waiting in the Port of Vancouver and Prince Rupert, rail companies have told Canada’s agriculture minister that moving oats south to the United States or the Port of Thunder Bay is not a priority. “Unfortunately, the railways have decided arbitrarily that no cars will be going into the U.S.,” Minister Gerry Ritz told reporters following a meeting with representatives from both the rail and grain industries in Winnipeg last week. Ritz said he favours consequences for those kinds of decisions. “That’s really not their role. They are there to allocate
cars and have them filled and moved to the point of destination by the shipper,” Ritz said. However, what those consequences might look like, when they might be imposed and under what regulatory framework remains unclear. “Fines are wonderful as an end result... problem is, there needs to be performance standards in place before fines can be assessed,” Ritz said, acknowledging that regulation may be necessary. That assessment is of little comfort to Randy Strychar, president of Ag Commodity Research. “The North American oat market, pardon the pun, but it’s basically a train wreck, I can’t think of any other way to describe it. It’s as dysfunctional as I’ve ever seen it,” he said. “We’ve got bottlenecks all over the place.” Speaking during the annual
Wild Oats Grainworld conference, the analyst said some American millers are down to a 20-day supply of the grain. Ideally, the U.S. should be receiving 8.75 million bushels of oats each month to meet demand, but supply has been reduced to a trickle, Strychar said. “They’ve started to search out other areas they can bring oats from because they can’t get the carloads of oats down there, and of course we’ve got them so it’s a matter of connecting the sellers here to the buyers,” said Ritz. But a solution to the problem remains elusive and Strychar expects transportation problems to persist into 2015 — if not longer. In the meantime U.S. oat buyers are turning to Scandinavian sources, and if import restrictions are eased Australia may be the next on the list.
When the transportation crisis ends, many American buyers will once again look to Canadian sources, Strychar said, but some will stay away for good. In the meantime, Canada’s bumper crop of 800,000 tonnes is largely sitting idle. “We got a record oat yield this year and normally that’s a good thing for farmers, normally that’d be a great thing, but this year it’s not a good thing because we can’t move the crop,” he said, adding that so few oats are being purchased a nearby price can’t currently be established. “If you call up a grain company, a Richardson... a Cargill, any of them, a Paterson, they will not offer oats forward, there is no predictability of car supply. Why would you sell oats to a U.S. miller if you don’t know what See GRAIN on page 6 »