Western Canadian farmers and grain handlers struggle to move a record harvest to markets amid shortages of railcars in use by the growing oil industry, Toronto's Globe and Mail reported Sunday.
“We are not getting the rail capacity we need to move the product,” Wade Sobkowich, executive director of the Western Grain Elevator Association, which represents major grain companies, said.
The 81-million-tonne harvest and increased rail traffic from the energy sector has created a backup of grain sitting in elevators waiting to be transported to the market.
Until recent years, U.S. crude was shipped north and east, from the oil hub in Cushing, Okla., but as more oil is produced in the Upper Midwest and in Canada, refineries in the eastern and northern U.S., as well as in Canada, have not been able to keep up with the glut.
The best way to transport the crude oil is by rail since there is no significant pipeline network in place, John Felmy, chief economist at the American Petroleum Institute, told International Business Times. “So, I think [railroading] will fit in well in terms of all of our shipping aspirations," he said.
“Definitely, increased shipments of oil by rail are having an impact,” Blair Rutter, executive director of the Western Canadian Wheat Growers Association, which represents farmers, said. “The fact that we don’t have [enough] pipelines is hurting the Canadian farmer in getting his grain to market.”
How North America's Oil Boom Is Hurting Farmers In Western Canada
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