Grain Train Runs Away From Canadian Farmers {Figuratively}

Not literally. I edited the title ex post facto to make it less alarming.

Grain Train Runs Away From Canadian Farmers

Commodities
By David George-Cosh and Jesse Newman
Dec. 10, 2014 8:26 p.m. ET

Canadian grain exports to the U.S. have fallen sharply as railways expand the more-lucrative cross-border crude-oil shipments, a shift that Canada’s farmers say is pushing their crops to lower-priced overseas markets.

The shift of Canadian grain abroad is likely to prop up prices for U.S. farmers and consumers, analysts say. In particular, wheat growers in states such as North Dakota and Minnesota could see higher bids for supplies from U.S. buyers with less access to cheaper wheat across the border.

The decline in grain exports is an unintended consequence of recent regulatory changes aimed at guaranteeing farmers rail time in the face of stiff competition from crude by rail. Those changes aren’t always helping farmers, as rail companies look for quicker journeys for grain to meet federal requirements, sending cargoes to ports in Vancouver and along the St. Lawrence River.

“If you’re looking to get the best asset utilization, you go to the ports,” Mark Hemmes, president of Quorum Corp., an Edmonton-based consultancy that monitors grain shipments for Canada’s government. “That’s one of the major unintended consequences of the government’s order.”
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Write to David George-Cosh at david.george-cosh@wsj.com and Jesse Newman at jesse.newman@wsj.com

Railcars of wheat on the Canadian Pacific Railway line in Alberta. The share of Canadian grain exports to the U.S. has reached a six-year low. Reuters