A possible Canadian freight rail strike this week would likely impact U.S.-Canada farm trade. A threatened strike and lockout at Canadian Pacific Kansas City Railway and Canadian National could cripple shipments of food grains, beans, potash, coal, and timber from Canada and farm and energy imports from the U.S.
American Farm Bureau Economist Danny Munch says “Corn, barley, oats, things like that, a lot of those products move on rail into Canada. So, just for context, Canada was the fifth-largest destination for cereal grains, receiving 1.1 billion dollars in U.S. exports.”
U.S. farm trade got a big boost from the NAFTA-replacing USMCA in 2020 with added hundreds of millions in dairy, beef, pork, corn, soybeans, and wheat exports. Munch says, “Canada is the fourth-largest destination for soybean meal and rice and the fifth-largest destination for corn. When you talk about ethanol and barley, they’re number one. So, 44 percent of our ethanol, 76 percent of our barley exports go to Canada.”
Any rail stoppage could disrupt much of that trade across North America. Munch says it would come at an especially bad time for U.S. producers. He says, “We are heading into harvest season. We are expecting record yields. We have commodity prices dropping. A lot of our bins are still zero to 25 percent full because a lot of farmers have been holding onto products. And, if you have this rail strike happen, you sort of put a pressure valve on the ability to move product.”
Which puts added downward pressure on prices. Canadian Pacific Kansas City said it would stop all new U.S. shipments headed for Canada starting early in the week, with a full-blown lockout and strike possible by Thursday. That, barring a settlement or Canadian government intervention. Issues at stake include wages, rest, and labor availability.
Story by Matt Kaye/Berns Bureau; courtesy of NAFB News Service
