Transportation Blame Game

VANCOUVER - Apr 10/14 - SNS -- Rail transportation problems and an unusual severe winter were the two most significant events affecting North American pulse and specialty crop markets over the past few months.

As confirmed by the USDA, colder than normal winter weather impaired the ability of railways to move field crops for much of the previous three months, worsening the backlog created by the initial reaction to shipper requests for railcars.

Logistical problems had surprising impacts on grower and inter-dealer markets for all field crops. To the extent grower deliveries into primary facilities did not match with the needs of shippers, the system becomes plugged with the wrong type and grades of product. There are anecdotal stories of ships needing to berth an unusually large number of times to be filled with the correct product.

Such events create technical shortages in port markets, strengthening spot markets as exporters try to fill out cargoes. By contrast, they can have a negative impact on grower bids as companies try to discourage farmers from selling what is not needed. This is a bigger problem for line elevator companies than specialty crop processors.