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Manitoba Port Squeezed From Grain Industry Shakeup

Churchill, Manitoba is the closest and least expensive port to the U.S. prairies, but its short season, its railway hub’s inability to handle larger trains, and recent developments in the Canadian grain industry have put the port’s future in question.

The Canadian government’s 2012 decision to dismantle the Canadian Wheat Board and its transformation into CWB began a series of events that has today threatened the continued use of the port.

Without the monopoly, CWB has been working to build a globally competitive network of vessels, terminals, and infrastructure aimed at handling and shipping grain through the St. Lawrence Seaway and the Great Lakes, rather than Churchill. In addition, this month, the newly formed U.S.-Saudi joint venture, G3 Global Grain Group has become a majority owner in CWB without a commitment to ship through Churchill to date, although a company spokesperson stated to The Globe and Mail that the company will ship through Churchill when “when it makes sense commercially.”

Since the dissolution of the monopoly, Churchill’s Denver-based owner, Omnitrax has widened the variety of crops that Churchill handles to include peas, flax and other crops, while trying to attract other grain companies to the port. Churchill has a reputation as being able to ship grain to Europe faster and cheaper than other ports, however because of ice pack the port is open only three months per year, and because its rail line is built on muskeg, it cannot handle typical trains of 100 cars or more. Because of government subsidies, other grain companies including Richardson International, Paterson Grain, and Louis Dreyfus have continued to ship through Churchill and throughput tonnage has remained constant at approximately 500,000 tons. But when the subsidies end in 2017, Omnitrax fears these volumes will fall.

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Lynda Kiernan is Editor with HighQuest Group Media and of the Oilseed & Grain News. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@highquestgroup.com.

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