Posted  23 Mar, 2020 
In: News

Originally published March 23, 2020 on Manitoba Co-Operator
By Allan Dawson


COVID-19: For now the coronavirus hasn’t affected the supply chain

Wade Sobkowich.photo: File

“Our members are going to do their best to keep the supply chain moving,” Wade Sobkowich, executive director of the Western Grain Elevator Association (WGEA), representing Canada’s biggest grain companies, said in an interview March 18.

“There are variables outside their control that they are trying to manage the best they can but it’s all towards continued operations and towards keeping the supply chain moving.”

Why it matters: Canadian farmers and Canada’s economy depend on grain getting to domestic and export markets. COVID-19 threatens Canadian’s health and the economy, but so far grain continues to move.

Grain company officials have plans to receive and ship out grain, while protecting farmers and staff from COVID-19, which as of March 18 had been confirmed to have infected nearly 220,000 people in 177 countries.

At least 84,000 have recovered from the virus, while more than 8,800 have died, according to data from Johns Hopkins University.

Canola oil and meal are moving too, Chris Veraet, executive director of the Canadian Oilseed Processors Association (COPA) said in an email March 19.

“Impacts so far have been limited, but as you can appreciate, the situation remains fluid,” he wrote. “Maintaining plant operability is key, which is contingent on open markets, functioning supply chains — both seed deliveries and outbound shipments — and ensuring workers can continue to do their jobs, while protecting everyone’s health and safety.”

Like the WGEA, COPA is pleased trade between Canada and the United States continues even though both countries temporarily banned non-essential travel to reduce the spread of the coronavirus first reported by Chinese authorities Dec. 31, 2019 and traced to a seafood and animal market in Wuhan, in Hubei province.

CN and CP Rail say they want to keep grain moving.

“CP is proactively monitoring the COVID-19 pandemic situation and taking action where required,” it said on its website last week. “Our service is not currently impacted by COVID-19; our trains continue to operate throughout North America, and… the U.S.-Canada border will remain open for trade. We remain focused on operating responsibly, safely and efficiently and on delivering for our customers.”

CN Rail is monitoring the virus too and taking direction from the World Health Organization, as well as local jurisdictions.

“We are taking all necessary steps to protect our personnel while we continue to run a solid operation to keep the economy moving by serving our customers,” CN said on its website.

Bulk grain is also moving well at Canada’s largest port.

Doug Mills.photo: Allan Dawson/File

“The rail has been getting to port and we’ve had some really nice, dry weather out here so loading operations have been going quite smoothly,” Doug Mills, senior account representative for the Port of Vancouver said in an interview from his home office March 18.

The Canadian Grain Commission and Canadian Food Inspection Agency will continue to provide their statutory inspection services, despite complications created by COVID-19.

“While we might change how some of our programs and services are delivered, we are going to maintain all core activities,” CGC spokesman Remi Gosselin said in an interview March 16. “As per the Canada Grain Act and regulations, all licensed grain companies will be notified that they will be required to continue their obligations, including, but not limited to licensing and reporting requirements. We will also continue to ensure that farmers are fairly compensated for grain deliveries to licensed grain companies under our Safeguards for Grain Farmers Program.

“We will focus on everything that’s core like grain inspection, collecting and publishing data, payment protection — all those things will continue.”

CFIA has maintained its work with no interruptions, an official wrote in an email March 19.

“The CFIA will continue to deliver critical services that preserve the integrity of Canada’s Food Safety System while safeguarding its animal and plant resource base,” the email said. “The CFIA will continue to monitor the COVID-19 situation and will adjust activities to take into account the evolving situation.”

While bulk grain is moving well, it’s another story for special crops, including pulses.

Greg Cherewyk.photo: Pulse Canada

“The whole containerized marine supply chain has been hit by coronavirus… ” Pulse Canada president Greg Cherewyk said in an interview from his home office. “The overall supply is a challenge.”

And the hit came because, according to Maersk, the world’s largest shipper, COVID-19 cut Chinese manufacturing by an estimated 50 to 60 per cent in February. The result was fewer electronics and other goods coming to the rest of the world, including Canada.

“That has had a big impact,” Cherewyk said. “We’ve seen over 30 blank sailings since the beginning of January alone.”

A ‘blank sailing’ is the term used when a container ship is cancelled.

The Chinese stuffed fewer containers and there were fewer ships bringing containers to North America.

“That represents hundreds of thousands of fewer containers landing in Vancouver and for us that’s millions of tonnes of capacity we don’t have access to,” Cherewyk said. “For an industry that exports 30 to 35 per cent of its crop in containers it’s significant.”

Transloaders — companies that unload rail cars of pulses and stuff them in containers, don’t have enough containers. Meanwhile, their yards are congested with stuffed containers. Cars full of pulses are backing up in rail yards and that’s backing up pulses to the farm.

“Decisions are made day to day as to whether anything can be pushed into that pipeline because it’s pretty congested at the other end,” he said. “At the time I was talking to them (transloaders in early March) they were saying it would be five or six weeks before we see some relief here. It could be into May.”

There are signs that manufacturing is picking up in China where COVID-19 appears to have run its course.

Meanwhile, the domestic demand for pulses, which store well, is rising as people stockpile food and self-isolate, Cherewyk said.

“There is demand there,” he said. “In this time of crisis people have to eat.

“So there are opportunities there. But you have to keep your eye on the shutdown of commercial operators and other types of food-service operators. Hopefully it will be offset. We’ll see where that all goes. We’re still early days.”


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