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Ongoing Canadian Railroad Strike Will Likely Impact U.S. Farmers

Daniel Munch

Economist

Chad Smith

Associate News Service Editor, NAFB

photo credit: Getty

Daniel Munch

Economist

Chad Smith

Associate News Service Editor, NAFB


The Canadian rail worker strike that began on Thursday will have a big impact on U.S.-Canada trade. Chad Smith has more on both import and export complications.

Smith: Almost 10,000 rail workers are on strike from the Canadian National Railway and Canadian Pacific Kansas City Railway. Danny Much, an economist for the American Farm Bureau Federation, says the strike will have a wide-ranging impact on both sides of the U.S.-Canada border.
Munch: Zooming out a bit, for the United States, Canada is the third-largest destination for exports with over $28 billion in exports in 2023, and the second-largest origin for agricultural imports at $40 billion last year. Combined, both the railroads under the strike, CN and CPKC control about 80 percent of the railroads in Canada, meaning if they are closed, railroad trade between both countries is basically nonexistent. Canada represents a top market for U.S. ethanol, barley exports, and is a top market for corn, soybean meal, and rice.
Smith: The strike will have impacts on both the import and export side of agricultural transportation. In addition to being one of the U.S.’s top markets, Canada is a key source of fertilizer for American farmers.
Munch: We source a lot of that fertilizer from Canada. Over 80 percent of our potash imports come from Canada. Twenty-five percent of our nitrogen imports. The important piece here is that 85 percent of all fertilizer trade between the United States and Canada comes in on railways, primarily at crossings in North Dakota, Minnesota, and Idaho. We also have to remember, a significant portion of farmers apply nitrogen in the fall, when this strike might still be in effect.
Smith: With a big harvest on the horizon and a lack of available shipping, farmers have some challenges ahead.
Munch: Corn, soybeans, and spring wheat all expected to reach record yields. With those low prices that are occurring right now, a lot of farmers have also stored previous harvests. So, we know our stocks of corn, soybeans, barley, are all up almost 20 percent over this time last year. So when you combine low prices, high stocks, high incoming yields, and a Canadian rail strike, farmers are really going to have fewer options to move a growing amount of product outward. That really feeds into significant market volatility.
Smith: For more information, go to fb.org/marketintel. Chad Smith, Washington.
 

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