Harsh Winter is Putting Great Stress On Grain Supply

March 5th, 2014 TKennedy_admin

This winter has been a treacherous one, wreaking havoc with snow showers and frigid temperatures all across the country. Of course, this has affected the national and global economy in many ways. As usual, the agricultural industry seems to be hit the hardest when it comes to adverse weather conditions. At the moment, many parts of the country are bracing themselves for still more heavy snowfall and dangerously low temperatures.

One of the most hindering effects of our unusually harsh winter has been on the rail cars used to transport grains. Delays have produced logjams of slow moving rail cars. There are many instances of unloaded rail cars being stuck at destinations on the east coast, unable to return for more shipments. Also, as demand rises for crude oil, trains are taking up precious space on Canadian rail lines, keeping grain shipments stranded. In many cases, producers are reacting by storing product instead of shipping it, pushing prices up.

In Canada, pressure has mounted on the government to provide additional resources and put their own pressure on railways to act. For their part, Canadian railways are said to be adding additional cars for grain transport to unload the backed up supply of grain. They are facing criticism, however, for selectively sending increased shipments to Canadian ports and not American ones.

Of course, this makes things harder on United States oat millers, who rely heavily on Canadian exports. The Canadian government is said to be putting pressure on the railways to change their operations, honor existing agreements with farmers, and attempt to alleviate the stress put on the low American oat supply.

While the winter will soon be over, and the industry is expected to rebound once the thaw comes, the effects of this downturn are expected to last well into the future. This season’s events are an unsettling example of how volatile the feed and grain market can be in the face of nature’s wrath.

All Star Trading is an agricultural grain and feed merchandising company in Oak Brook, IL. For more information on products, shipping, or our company, visit our website.




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