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Update: CP rail strike notice given

Fertilizer shipments and U.S. feed exports to Canada could be impacted by CP rail strike.

Jacqui Fatka

March 16, 2022

4 Min Read
CP rail GettyImages-526911008.jpg
RAIL STRIKE: Canadian Pacific rail union workers have yet to reach an agreement with the company on wage concerns. The strike will negatively impact exports of fertilizer inputs to the United States and U.S. feed corn to Canada for Canadian feedlots. Getty Images

Canadian Pacific have served the Teamsters Canada Rail Conference with notice of lockout. In the event there is not a negotiated settlement between the parties, CP will lockout the union on March 20, 2022 at 1 a.m. CP is Canada’s second-largest railway and operates lines that run all the way down to Kansas City, Missouri, with grain shipping as its primary business.

CP worker talks continued despite a March 16 midnight deadline to avoid a strike as an agreement has not been reached with the company over improved wages, benefits and pensions for union workers. Hover, the lockout notice was provided Wednesday evening. 

“It was well known that CP was going to force a work stoppage and lockout our members. They have done just that,” says Dave Fulton, spokesperson for TCRC. “At the bargaining table, CP continues to dismiss our members’ demands and are unwilling to negotiate the issues they have created. We remain committed to reaching an acceptable agreement that addresses our members issues. Our members are fully engaged and will be ready in the event CP carries out the notice.”

Teamsters Canada Rail Conference is committed to working with federal mediators and reaching a negotiated settlement. The Union is willing to remain at the bargaining table until the March 20th lockout deadline and beyond. 

Last month, members of TCRC, which represents approximately 3,000 of CP's locomotive engineers and conductors, voted in favor of strike action. The union’s chief point of dispute has been low pension caps for its employees.

“A potential strike would severely slow grain flows between Canada and the U.S., at a time when Canadian livestock producers are increasingly reliant on American grain supplies to keep herds nourished. Canadian fertilizers would also become more difficult – and expensive – for U.S. farmers to obtain if CP workers strike, especially as planting season in the U.S. approaches,” says Jacqueline Holland, Farm Futures market analyst.

Approximately 10-15% of CP business is fertilizer, which would create another blow to farmers who have issues securing fertilizer supplies this growing season. Earlier this month, the world’s biggest crop-nutrient producer Nutrient asked the Canadian government to intervene.

“The global food supply is already stretched and cannot afford further negative impacts at this time,” Nutrien says. “We would hope that the Canadian government will consider intervening to avert another transportation crisis.”

Mike Steenhoek, executive director of the Soybean Transportation Coalition, explains according to USDA last year Canadian Pacific originated 242,533 carloads of grain and is a major conduit for fertilizer deliveries into the U.S.

"A strike at Canadian Pacific would add insult to injury to a supply chain already under significant stress," Steenhoek says. "It’s never a good time to have a disruption of service among one of our major railroads, but it’s particularly an inopportune time given all our current challenges. We sincerely hope both parties will arrive at an agreement and avoid a strike that will further injure agriculture and other industries."

Canadian feedlots concerned on feed shortages

The Canadian Cattlemen’s Association and the Canada’s National Feeders’ Association are highly concerned about the potential impacts of a rail strike, including devastating consequences to Canada’s beef industry.

Western Canadian cattle producers are dependent on feed shipments from the U.S. because of the hard-hitting drought producers faced last year from British Columbia through to Ontario. A disruption in shipments of feed grain from the United States will significantly impact the ability of beef producers to feed their cattle, the groups say. Prior issues with rail and transportation had already reduced feed availability and feeders have been managing their needs on a train-by-train basis.

“There is no buffer in the system,” CCA and NCFA say in a joint statement.

In the event a solution cannot be reached, CCA and NCFA say the parties should move directly to binding arbitration to avoid a strike and the resulting necessity of implementing back-to-work legislation. It is imperative to prevent the serious consequences that would arise from a shortage of critical feed supplies on Canadian beef operations.

James Bekkering, NCFA chair adds, “A rail strike would be devastating to our industry. With last year’s drought and recent transportation issues, feeders have been reliant on CP rail bringing up feed from the U.S. If trains stop moving, there will be no other options.”

According to Statistics Canada, Alberta and Saskatchewan corn imports in 2021 were up 400%.

One rail car is estimated to feed approximately 8,000 head for one day, totaling nine to ten trains per week. It is estimated that over 1,000 super-B trucks would be needed weekly to replace the volume of feed grain currently be transported by Canadian Pacific Railway trains and trucking capacity is not available leaving no alternative solutions.

Estimated current available feed supply is one to two weeks. On Feb. 1, 2022, there were 1.1. million head of cattle on feed in Alberta and Saskatchewan.

“We are very concerned about the potential impacts of a rail strike on the ability of beef producers to feed their cattle, particularly feedlots. It is imperative that essential services are not interrupted, including the movement of agricultural products by rail,” says Bob Lowe, CCA president.

About the Author(s)

Jacqui Fatka

Policy editor, Farm Futures

Jacqui Fatka grew up on a diversified livestock and grain farm in southwest Iowa and graduated from Iowa State University with a bachelor’s degree in journalism and mass communications, with a minor in agriculture education, in 2003. She’s been writing for agricultural audiences ever since. In college, she interned with Wallaces Farmer and cultivated her love of ag policy during an internship with the Iowa Pork Producers Association, working in Sen. Chuck Grassley’s Capitol Hill press office. In 2003, she started full time for Farm Progress companies’ state and regional publications as the e-content editor, and became Farm Futures’ policy editor in 2004. A few years later, she began covering grain and biofuels markets for the weekly newspaper Feedstuffs. As the current policy editor for Farm Progress, she covers the ongoing developments in ag policy, trade, regulations and court rulings. Fatka also serves as the interim executive secretary-treasurer for the North American Agricultural Journalists. She lives on a small acreage in central Ohio with her husband and three children.

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