Whatever you do, Ethanol and cows don't mix...
Posted on 01/22/2022 1:59:34 PM PST by george76
Corn imports into Western Canada from the U.S. have risen dramatically following the 2021 drought, but cattle feeders in Alberta say unpredictable shipments are not keeping up with demand.
In some cases, feedlots say they are scraping together the last of their feed supplies, and are banking on delayed trains still arriving in time to maintain rations.
According to the latest numbers from the USDA, Canadian corn imports in October and November were more than four times higher than the previous year, while there were more than 2.2 million tons in U.S. sales into Canada on the books that were yet to be shipped as of the end of December 2021.
The primary railway involved in supplying southern Alberta corn, CP Rail, says it moved 8,100 carloads of corn from the U.S. into Alberta in 2021, compared with 600 in 2020. The number of carloads of distillers’ dried grains (DDGs) shipped was up more than 300 per cent versus 2020, says CP.
Corn DDGs are also moving into southern Alberta by truck from Montana, off the BNSF railway.
Despite the massive increase in imports, multiple feedlot owners have told RealAgriculture they are in a desperate feed situation due to the delays in rail shipments with no buffer for supply chain interruptions caused by winter weather or COVID-19.
“All things COVID, trucking shortages, a cold snap that slowed trains, plus a complete lack of understanding of how urgent and critical feed grains are by CP Rail, has caused our operation and several others I know to run completely out of grain,” says Leighton Kolk, of Kolk Farms Ltd., at Iron Springs, Alta.
“We have had to make costly and painful adjustments just to keep cattle fed till the next train arrives.”
Of the 10 thousand metric tonnes Kolk Farms ordered for November-December delivery, he says they’ve received 5,400 as of Wednesday. Kolk says their grain bins have run empty on at least four occasions in the past six weeks, while trains arrived “not just days, but weeks later than scheduled.”
The Alberta Cattle Feeders Association estimates over 75 per cent of its members have had corn shipments delayed, and almost 100% have had shipments of distillers’ dried grains delayed and are either out or will soon be out.
“Several larger feedlots have indicated that they will run out of all feed in a few days,” says a recent briefing note from the ACFA. “These feedlots house anywhere from 20,000 to 40,000 head so this is now a serious animal welfare issue.”
“It’s a mess,” notes Kevin Serfas, of Serfas Farms, based at Turin, Alta. “If you only bought exactly what you needed on a week-to-week basis, you are in panic mode right now. I started November 1 and probably have half my orders. I’m not sure what needs to change. Everyone just blames the prior link in the chain.”
That chain includes grain companies, railways and railways, as well as trucking companies.
In some cases, grain handlers, such as Cargill, P&H, Richardson, and Viterra, are essentially trying to run their elevators in reverse. Rather than taking delivery from producers and loading grain onto trains, they are taking delivery of corn by train and transferring it onto trucks to fill sales contracts they’ve signed with cattle feeders — many of which are the same producers who otherwise sell grain to these companies.
RealAgriculture has asked several grain companies to comment on the feed supply challenges and the terms of their contracts with feedlots, however they have not responded, or have declined to comment.
Labour shortages, due to COVID-19 and more, have exacerbated the challenge in some situations, causing delays with loading and unloading trains and trucks. Several feedlots say delays in unloading trains have resulted in the railway putting a lower priority on these shipments. In some cases, they’ve been penalized financially with demurrage fees.
There’s also concern the Canadian and U.S. government’s cross-border vaccination mandates, taking effect January 15 and 22, respectively, are removing a significant number of truck drivers from the road. Several sources told RealAgriculture they’ve also heard of a train being delayed due to crew members not wanting to have to quarantine in Canada.
To put the amount of feed that’s needed in context, ACFA says one rail car — the equivalent of approximately two super B trailers — will feed approximately 8,000 head of cattle for one day. There are approximately 1.5 million head in the province, meaning the industry requires more than a 100 unit train every day to replace the barley and wheat that would normally be sourced closer to home.
Demand for grain is also expected to increase as calves that were put on feed in the fall are starting to require higher energy rations.
The last time cattle feeders in Alberta had to rely on American corn imports via rail to this extent was in 2002, but Kolk says the logistical challenges are “magnified greatly this year (compared with 2002).”
My wife just bought 6, 50 lb bags of grain for her horses from our local feedmill and the price is up 25% from her last order just a few months back.
Hay went from 3.50 to averaging 6.50-7.00 a bale in one year.
It certainly seems to be headed that way.
The problem is they’re competing with other things that are being shipped by rail. Couple years ago, there were several dozen Union Pacific engines sitting idle outside of Missouri Valley, Iowa. Now there are none. Gas prices go higher, train traffic becomes more competitive.
-—feedlot people-—? The typical feedlot has in the neighborhood of 30,000 feeders. Once the animals are in the finishing stage you just can’t turn them loose to graze especially in winter after the fields that might be available have already been grazed. And trucking them back to the growers is out of the question.
Smaller custom feedlots, say 200,300,400 animals have the same problem. The areas of the country that had a drought of one level or another were already short of stores. Then remember that the chicoms had a bad year a year ago and they’ve been here buying our reserves. Eastern Washington, the Palouse, grows about 80 million tons of grain stuff/year and typically 80% of that goes to Asia. This past year they took it all. But if it makes you feel any better we kept some Chinese guys from losing weight?
Thanks for explanation.
And still, those poor cows.
You gotta know where those UP engines you’re missing are now? They’re pulling brand new tanker cars from the Kanadian Athabasca, hauling crude Kanadian to Loosiana for refining. You can thank Warren Buffett. He’s the guy who wanted the Keystone stopped so it wouldn’t compete with his tankers. One of the busiest businesses in the country in the past year is the tank car builders. And Warren thanks you for paying those higher gas prices.
I buy about a half ton of steel a month and those guys are the single biggest factor in my costs being up about 30% in the past year.
Excellent post.
Thank you.
Blocking pipelines that transport oil - cheaper and safer - forces that oil to be shipped by ( large democrat donor $$ ) Warren Buffet’s RR - thus fewer engines, etc. available to haul corn, etc.
Red Deer, Alberta webcam.
Ethanol in fuel is more important …. Right ?
—
For now, but soon the EV revolution will hit, and they will have to plant bio-fuels to power airline planes, until they make windmills small enough to mount on the planes next to the solar panels.
BINGO!
Q) Who would have thought some stupid little boy and a demented old man could screw things up this bad.
A) Many of us did.
We are living in an Ayn Rand novel.
Whatever you do, Ethanol and cows don't mix...
What happens if cows only eat say 5 days out of 7, to help ration tight feed supplies?
In the book, it was the problem of getting wheat and soybeans moving by rail. Here the crops are different, but the problem is the same.
The ping is much appreciated, Publius...hope all is well!
I am beginning to regret having read Atlas Shrugged, because it makes me feel that I already know how all this is going to end because I read the book!
If only there were a Galt’s Gulch. If only.
You shut down the border to truckers that don’t have vaccinations, and suddenly there’s a feed shortage.
What a surprise!
At nine to eleven months of age, cattle are typically moved to a feedlot where they are raised to a finished weight of about 635 kg.
The feed lot is just that, the place they fatten them up before the slaughter.
I was shopping at my local kosher market Thursday and spotted some whole chickens. Although I didn’t need a whole chicken, I was curious about their current price. And was blown backward when I read: $20.26 for a regular-sized dead chicken which had been plucked, gutted, and lay in a styrofoam tray.
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