Turkey, Ukraine, Russia and the United Nations have been holding talks on ways to extend the deal brokered in July allowing the safe export of Ukrainian grain via the Black Sea. The deal is due to expire Thursday.

Of about 20 senior Ukrainian and international traders and analysts polled by Reuters at the GrainCom conference in Geneva, a vast majority said they expected a renewal of the deal, though possibly with some delay.

Nearly all the delegates polled said a much lower harvest expected this year had alleviated the pressure to export through Black Sea ports, and that alternative routes including rail, truck and exports via the Danube river would be able compensate.

Those routes are, however, generally much more expensive than shipping via the Black Sea.

Nikolay Gorbachov, head of the Ukrainian Grain Association, warned that without the corridor export logistic prices would surge and cut farmers’ margins so much that they would stop producing wheat and corn in big volumes.

Ukraine’s corn crop is forecast to total just 21 million tonnes this year, around half the 42.1 million it harvested two years before the conflict began, according to the International Grains Council.

Moscow has threatened to quit the deal over obstacles to its grain and fertilizer exports.

The Kremlin said on Tuesday that questions remained about Russia’s part in the agreement, and that it would have to make a decision on whether to renew it.

Dan Basse, president of Chicago-based consultancy AgResource, said on the sidelines of the gathering that there wouldn’t be a big impact on global supplies this year if the agreement wasn’t renewed.

“With a lower crop this year, it can all go out west through eastern Europe. The problem is that it will cost 15 per cent to 20 per cent more,” he said.

Under the pact to create a safe shipping channel, Ukraine has been able to export some 30.25 million tonnes of agricultural products, of which 50 per cent was corn and 28 per cent wheat. Other commodities shipped include rapeseed, sunflower oil, sunflower meal and barley.

“Do we need the corridor? I would say yes,” Stefan Florescu, global head of wheat trading at CHS, the largest U.S agricultural cooperative, told the conference. “But if we aren’t going to have it, are we going to find a solution to export everything via the EU export corridor? I would say yes as well.”

— Sybille de La Hamaide is a Reuters commodities correspondent in Paris; additional reporting by Nigel Hunt.

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Spring road restrictions set axle weight limits for vehicles moving on certain roads to reduce the damage heavier loads can cause during the spring thaw period. Grain and equipment movement can both be affected by the spring road bans, as drivers may need to find alternate routes or haul smaller loads.

The duration of the restrictions will depend on the local weather conditions, but typically last through April and into May.

In Manitoba, spring road bans are set to come into effect on Friday, March 17, according to a provincial order.

The winter weight season in neighbouring Saskatchewan is set to expire on March 14, which will reduce the tonnage allowed on roads.

Alberta has yet to report the official start of road restrictions in the province, but typically sees its first weight limits for the southern areas of the province in mid-March.

— Phil Franz-Warkentin is an associate editor/analyst with MarketsFarm in Winnipeg.

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David Buurma, LaSalle Agri Fertilizer owner, recently asked through Facebook for names of farm insurance companies that would insure his AZ drivers that have little to no commercial experience. 

His question cultivated a flurry of responses from those who shared his frustration. Many want and need to hire AZ drivers but struggle to find affordable insurance if the drivers lack three to five years of insured commercial experience or are under 25 years old. 

Why it matters: Agricultural-related labour shortages are increasing, especially among qualified and licensed AZ drivers.

An 18-year-old third-generation cattle hauler who invested $10,000 in provincial training and graduated with a 98 per cent test result said he was told his insurance premiums would be approximately $32,000. Another couldn’t get a 450 cube van insured without proof of insured commercial driving and asked how anyone can obtain the required five years of insured driving experience without insurance. 

“At the end of the day, the biggest issue right now is finding people to work,” Buurma said. “The more options you have, technically, the more chances you can fill jobs, right?”

• [READ MORE] Transport challenges continue to haunt agriculture sector

He said the market for experienced AZ drivers is competitive and insurance prevents hiring within the 18-to-25-year-old demographic. It leaves him frustrated. 

“We want to motivate them (young people), get them in the truck, and start driving,” he said. “So, whatever we can do to get past that hurdle . . . because I’d hire guys all day long to run a commercial truck that were younger.”

Ontario Federation of Agriculture policy analyst Ian Nokes said the past few years have seen a rise in miscommunication between the transportation ministry, Service Ontario, insurance companies and public understanding of their role. 

The transport ministry created farm plates so ‘G’ licensed drivers within agriculture could drive commercial vehicles heavier than 11,000 kilograms without obtaining a ‘D’ licence. That weight rating falls within the commercial vehicle operators’ registration (CVOR) of 6,000 to 15,000 kg coverage, which the ministry requires agricultural operators to have for farm plates.

Nokes said obtaining a commercial operator’s registration for farm vehicles can be onerous. However, agriculture businesses are now encountering situations where insurance companies refuse coverage because they don’t understand regulatory exemptions available to the agriculture sector. 

“We’ve had insurance companies telling people that they can’t,” he said. “We have to cite all the different regulations, driver’s licence regulations and information for them to understand that, ‘yeah, you’re supposed to be insuring us.’”  

Nokes said it’s frustrating when the government agrees farmers can drive commercial vehicles but insurance is complicated to obtain and when the premiums are untenably high.

“We’re aware of these problems and the simple unwillingness of insurance companies (to provide coverage),” he said. “They’re offering it at such an (expensive) level they know you won’t take it.”

Nokes said a portion of the CVOR requirement relates to crossing borders and international travel, which doesn’t apply to most farmers who are moving livestock or grain to market. 

“We’ve been trying to work with the ministry of transportation, and they’ve indicated they’re going to review the requirements for the commercial vehicle operators’ registration,” said Nokes.

“Maybe that will be an opportunity for them to look at having a version for farmers because we don’t do international travel. We don’t cross borders.”

Commercial insurance rates have increased significantly over the last three years because, for several years, every line of a commercial insurance company was losing money, said Jack Wilkinson.  

Wilkinson, a director for Co-operator’s Insurance and OFA past-president, said the cost of covering a $500,000 truck, a trailer full of goods or environmental spills as a result of a crash could be astronomical, and the premiums reflect the cost and risk factors associated with that licence class.

He said people are quick to complain about rates but slow to engage their insurance agent in a conversation on how to lower premiums. Having that conversation can save a lot of frustration and money. 

Wilkinson warned people against pulling their insurance from any company before confirming coverage of equal or better value is available elsewhere.

“Before you take (your business) somewhere else, you want to make sure there is somewhere else,” said Wilkinson. “Because if the individual unilaterally decided to leave and found out no company was interested in insuring drivers with no experience, he would have effectively hurt his company.”

He said a dramatic change in truck drivers’ demographics and lifestyle goals is forcing all sectors to initiate driver retention strategies like pension plans and profit sharing. 

The alternative for new drivers could be working at a lower pay scale to offset the premiums the company covers to get the experience they need or start their own business. 

“Now you’ve got to match your growth with your employment ability to retain skilled workers,” he said. “There is no simple answer to this. But, if a certain class has a higher frequency of accidents than others, the premium will reflect that.”

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Two years of pandemic restrictions, followed by the Russian attack on Ukraine, are far different hurdles than the typical weather challenges.

“This isn’t just a grain story. This is potash. This is energy,” said David Przednowek, assistant vice-president of grain at Canadian National (CN) Railway. “You think about the implications of sanctions and how that might have impacted what you’re buying.”

Why it matters: Canada must solve its transportation issues in order to recover fully from the pandemic, says a rail official.
Add in the structural changes within the workforce and the entire supply chain has to adjust. Labour has been a persistent issue for years.

“We have a structural deficit in North America right now and that’s due to demographic change… not a lot of immigration,” he said. “I think the major thing with the supply chain and just the economy in general is going to be people.”

Susan Ewart, executive director of the Saskatchewan Trucking Association, agreed.

“Today, there are 23,000 vacant truck driver positions (and) by the end of the year they’re predicting 55,000,” she said.

The aging work force, COVID and the industry’s image haven’t helped make trucking a desirable career, she added.

Aside from drivers, the industry is short of dispatchers, administration staff and heavy-duty mechanics.

“As consumers we are seeing the results of that on the store shelves,” Ewart said.

Immigration is a piece of the solution but not all of it, she added. The industry is trying to work with high schools to encourage a next generation. And 10 women each year participate in the Women Shifting Gears program, designed to show them what trucking is like.

“Employers are starting to change their thought process around flexible working environments because I think there is an image and a perception that ‘I’m not ever home’ and it’s always about long haul,” she said.

Some companies are switching drivers part-way through routes to lessen long hauls and time away from home, Ewart said.

Przednowek said railroads have similar issues. He noted some of the densest traffic areas are those in remote parts of northern Alberta and British Columbia. The jobs pay well but families also have to consider access to schools and services and it becomes more difficult to recruit.

The training alone takes six to nine months, depending on the job.

“People are making individual decisions about work life balance and what it is they want to get out of employment,” he said.

Kenric Exner, general manager of multimodal logistics and trade execution at Viterra, said jobs aren’t just about salary anymore.

“People’s value propositions have drastically changed over the last 18 months,” he said.

But he said working in agriculture is rewarding and offers opportunities if they can just get workers into the industry in the first place.

Przednowek said technology offers some solutions. For example, track inspection now involves a high rail vehicle, with a driver, moving at 15 to 20 mph on track where traffic is stopped at both ends to look for visual defects.

“If we could put special box cars filled with all kinds of technology in there to do that at the same time and do it in the middle of a merchandise train at track speed, which can be up to 50 or 60 mph, you’re adding capacity to the supply chain,” he said.

Exner said many supply chain issues are affecting the industry. Multimodal in particular has had a challenging year. Carriers don’t want containers to come inland and would rather keep them at port to get them back overseas.

He said technology such as loop tracks, high-capacity cars and larger trains all help grain move better.

Panel moderator Cherilyn Jolly-Nagel asked how agriculture is to help Canada recover from COVID if infrastructure is a decade behind where it needs to be.

Przednowek said some capacity constraint is geographic and some is commercially driven. Markets like Eastern Europe and

Russia were once big buyers and now the Pacific region is driving demand.

Between 15 and 17 million tonnes of grain used to move through Thunder Bay and the St. Lawrence River, he said. That capacity is significantly underutilized today, but the industry should be making the most of it.

Exner said the burgeoning domestic crush capacity for canola will change trade patterns again.

“Things will open up to the east,” he predicted. “The whole crush footprint and the whole process of expansion will change how we move product. It’s going to change the pipeline.”

The panel identified other challenges, including the federal plan for zero emissions by 2030. Ewart said she didn’t know how heavy and medium-sized trucks could become electric in the Canadian climate.

Przednowek said CN has pilot programs underway using higher blends of biodiesel or renewable diesel in its engines.

– This article was originally published at The Western Producer.

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Truckers agreed late last week to end a strike that had paralyzed grains transport in the South American nation and seen the number of trucks arriving at port hit almost zero, right in the middle of the busy soy and corn harvest.

Agricultural logistics firm AgroEntregas said on Monday morning 4,295 grains trucks had arrived at port terminals. Trucks are the main transport method to bring grains from the farm belt to river and sea ports for export.

“The flow of trucks is back to normal,” Guillermo Wade, head of the Chamber of Port and Maritime Activities, told Reuters.

AgroEntregas said on Twitter that grains transportation was “beginning to stabilize” after the four-day strike last week.

The striking truck owners had been demanding a hike in freight rates to offset rising fuel prices. Some 85 per cent of Argentine grains are transported domestically by truck, mostly to inland ports on the Parana River.

Exporters had warned that the hike in rates could paralyze grains exports once stockpiles at ports had run dry.

According to the Buenos Aires grains exchange, farmers have harvested some 14.4 per cent of the soybean planted area and 19.4 per cent of the area planted with corn. The exchange forecasts a 2021-22 soybean harvest of 42 million tonnes and 49 million tonnes for corn.

— Maximilian Heath is a Reuters correspondent in Buenos Aires.

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Representatives of Ontario’s agricultural commodities are among those calling for a reversal of the mandate.

“We’re very concerned. That’s the number one feeling among the organizations in the beef sector,” says Richard Horne, executive director for Beef Farmers of Ontario. Animal transport is only part of the problem, he adds. The movement of feed, supplies and equipment is also affected.

Why it matters: The vaccination mandate, imposed on the trucking industry by the Canadian government, is expected to cause significant disruptions in an already strained transportation sector and supply chain.

Horne says BFO and other groups previously supported a letter asking government to reverse or amend the trucker vaccine mandate policy so driver and truck shortages didn’t worsen. The federal government responded with intentions to stick with the mandate.

“The biggest question I’m hearing is farmers and industry are not sure what’s being accomplished with this mandate…I don’t think it’s anything to do with pro-vaccine or not. It’s about keeping the supply chain moving,” says Horne.

John de Bruyn, chair of Ontario Pork, expresses similar sentiments. In an email, he highlighted ongoing difficulties with animal transport amid on-farm labour shortages, plant slowdowns and closures.

“Ontario Pork members market roughly 110,000 hogs each week to meet demand from domestic and export markets. The supply chain has limited flexibility to handle any disruptions,” de Bruyn says.

“With already limited processing options in the province being further reduced due to labour challenges, more animals must be moved out of province. At the same time, farmers who export animals to the U.S., or processing partners who depend on moving pork out of the province, are now facing challenges in finding qualified drivers able to transport their product…

“After almost two years of challenges related to COVID-19, the sustainability of Ontario’s pork sector relies on finding ways to ensure the supply chain remains intact, that pigs continue to move, and that pork reaches consumer tables.”

Labour challenges are central to concerns expressed by Grain Farmers of Ontario. Chair Brendan Byrne says transportation problems continue to increase the cost of doing business. A wider conversation about the importance of reliable transport is required.

“Trucker shortages have delayed shipping of products and increased costs. The lack of truckers is further exacerbated by the increase in supply chain challenges created by the pandemic and crossing the border,” Byrne says.

“Farmers need to get their crops to market and we urge the federal government and the province of Ontario to recognize these challenges on truck transportation and put in place an immediate plan that ensures the agriculture supply chain is not disrupted.”

He says the transportation industry is the best choice to develop such a plan, along with the Canadian Manufacturers and Exporters.

“We hope the federal government is engaging with them to resolve this,” Byrne stated.

Customer prioritization

Though the full impact of the federal mandate remains to be seen, Horne is concerned about the diversion of scant resources to larger customers. Smaller farmers and those who ship less frequently will bear the brunt of the transportation crunch.

The impact of vaccine refusal could also have a disproportionate impact on smaller trucking companies, says Russel Hurst, executive director for the Ontario Agri Business Association.

Larger fleets will be better able to adapt to employee refusals but one or two holdouts at small companies can prove paralyzing.

Hurst believes the strain is of greatest concern now to the livestock sector, due to the specialized nature of livestock transportation and the fact that the grain sector is quieter during winter.

“One of the challenges of this absolute vaccine mandate is, why now? Why now, two years in, and realizing the business stress this causes?” says Hurst.

“It shows how fragile supply chains can be, even with these little shocks.”

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The Quebec company announced Monday it would sell its Quebec bulk milk hauling business to unnamed “companies whose core business is transporting liquid food products,” and would also halt its milk transport work in Nova Scotia.

But Agropur, in its release Monday, emphasized it “is continuing its milk transport operations in New Brunswick.”

The Quebec sale is expected to affect about nine per cent of the milk produced by Agropur members in that province, and to eliminate up to 11 jobs “upon closing of the transaction.” The company didn’t give an expected closing date.

Another 75 Quebec jobs, meanwhile, will be transferred to the unnamed “acquirers.” The deal also includes the affected bulk milk transport assets.

In Nova Scotia, meanwhile, Agropur plans to discontinue its farm pickup operations as of June 30, eliminating 34 jobs.

Effective July 1, Dairy Farmers of Nova Scotia (DFNS) said it has “designated new agents” to pick up milk from member farms.

DFNS, in an April 15 notice, named those milk transport agents as Fisher Transport Ltd. and Burghardt Transport Ltd., which it described as “well-established Nova Scotian transport companies with recognized expertise in milk hauling.”

“To streamline its business model and focus on its most strategic assets, Agropur is withdrawing from milk hauling in those two provinces,” Agropur CEO Emile Cordeau said in Monday’s release.

“I would like to thank all employees in this sector affected by this decision. They have been and will be until the conclusion of the transactions, important standard-bearers of the co-operative on the roads and with dairy farmers in these two provinces.”

DFNS chairman Gerrit Damsteegt said the organization thanks Agropur “for their excellent service over the years and for their co-operation in the transition. We will work hard to make sure the changeover goes smoothly for Nova Scotia dairy farmers.” — Glacier FarmMedia Network

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“Not if we can help it,” Fertilizer Canada CEO Garth Whyte said Thursday.”We’ve weathered all the rail system disruptions that we had over the last six months, and now, with COVID-19, we’re doing OK.

“We’ve put contingency plans in at our manufacturing plants, at our storage terminals, and our retail outlets across the country to make sure that employees are protected and that farmers get the fertilizer they need.

“Stocks are pretty well in position, and once farmers start up in a couple weeks, we should be OK.”

Fertilizer Canada is working closely with provincial and federal governments, as well as national ag organizations, to ensure COVID-19 safety measures don’t have “unintended consequences” on fertilizer distribution.

“We’ve implored government to not forget about us,” Whyte said. “We’ve really been pushing that fertilizer is an essential commodity that’s got to get to our farmers.”

“A lot of the directions around COVID-19 have been from an urban point of view, but we’re there to remind them that we need to make sure that we don’t blindside the agriculture industry with any changes.”

The federal government announced Wednesday that trade between Canada and the U.S. would remain mostly uninterrupted despite closing the border to non-essential traffic.

But the real concern right now is potential trucker shortages across North America, Whyte said, adding that trucking regulations may need to change to reflect the current emergency situation.

“They may have to work longer hours, so they shouldn’t be impeded by hours-of-work legislation,” he said. “It’s got to be safe and secure, of course, but if it is, then let’s make sure we’re doing everything possible to get fertilizer to the growers when they need it.”

While the Canadian Trucking Alliance isn’t yet experiencing problems, Fertilizer Canada will be monitoring the situation.

“We’re ramped up, but (seeding) is not going to happen for a couple more weeks, so we’re monitoring and preparing now.”

So far, the response from governments has been “overwhelmingly supportive,” he added.

“They basically understand the importance of agriculture and agribusiness and their inputs as a major part of their COVID-19 contingency planning,” said Whyte.

“It’s critical that we have a successful planting season this spring that hopefully leads to good yields at harvest this fall. If we have a strong agriculture sector, it can play a major role in Canada’s economy, especially with everything going on.

“As we try to get out of this pandemic and potential recession, one of the shining lights will hopefully be agriculture.”

— Jennifer Blair reports for Alberta Farmer from Red Deer.

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“Everybody is just waiting to see what will happen,” said Mike Fleischhauer of Eagle Commodities in Lethbridge.

While large amounts of tough grain were moving, he said there was also plenty of drier grain available that growers were holding off on selling in hopes of seeing higher prices later in the marketing year.

However, trucking remains an issue, with the holiday season exacerbating tight transport availability.

“Everybody is on holidays and taking some time off, but the cattle still need to eat, every day,” Fleischhauer said.

A number of unit trains bringing grain from Saskatchewan arrived in recent weeks, taking some pressure off of the market, said Fleischhauer. However, not much corn was coming up from the U.S., due in part to the poorer quality of the U.S. crop.

Barley has traded around the $225 per tonne area for the past several weeks, with feed wheat generally a few dollars per tonne higher.

— Phil Franz-Warkentin writes for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.

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Neumann, senior trader for Agfinity at Stony Plain, Alta., said barley currently was around $223 per tonne Lethbridge delivered and wheat was a little back at $220 per tonne. He noted prices had increased recently, but since came down.

“We had a discussion in our office and we felt the question wasn’t why did it come down, but moreso, why was it propped up in the first place?” he said.

Neumann chalked that up to transportation, with a trucking shortage and the strike at Canadian National Railway. That resulted in buyers making purchases for a short time.

Since “the market corrected to its equilibrium,” he said, “buyers are pretty much covered for December.”

Also, supplies will be ample through winter and well into spring, Neumann said. The difficult Prairie harvest resulted in large amounts of wheat and barley being sold for feed this fall. Crops will be left to overwinter and will become available in the spring. That would normally be a time when feed grains would otherwise be in short supply.

“Most sales are going to have to be in 2020,” Neumann said.

— Glen Hallick reports for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.

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