Canadian farmers load U.S.-bound grain trucks to beat backlog

Thu Mar 27, 2014 2:38pm EDT
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By Rod Nickel

WINNIPEG, Manitoba, March 27 (Reuters) - Truckloads of Canadian canola and wheat are flowing briskly into U.S. crushing plants and elevators, as Canada's farmers seek to get round an unprecedented backlog of crops destined for ports.

A record-smashing Canadian harvest and brutal winter have overwhelmed Canadian National Railway Co and Canadian Pacific Limited, the key links in moving western crops to ports on the Pacific Ocean, the Great Lakes and St. Lawrence Seaway.

As much as C$20 billion ($18 billion) worth of grain and oilseeds is piled up in country elevators and farm bins waiting for rail cars, limiting sales opportunities in Canada and pinching farmers' cash flow.

Instead of waiting longer for port-bound trains, some farmers are loading trucks to buyers like Northstar Agri Industries, which crushes canola near Hallock, Minnesota, 40 kilometres (25 miles) from the Canadian border.

Northstar has bought more Canadian canola than usual from grain handlers and farmers north of the border, said Neil Juhnke, its president and chief operating officer.

"They're looking for a market that has some liquidity," Juhnke said. "In a lot of cases we're hearing their local elevators are not receiving or are taking bids down."

"We're well supplied through the remainder of this crop year."

Northstar will rely on Canadian canola for as much as 65 percent of its 420,000 tonne annual supply after heavy rain fell during last year's planting season in parts of North Dakota.   Continued...