Millers hurt by slow grain movement

CNS Canada — The ongoing logistics problems moving grain out of the Prairies have prompted some North American cereal milling companies to temporarily halt production, according to the head of a prominent industry group.

Gordon Harrison, president of the Canadian National Millers Association, says the transportation situation facing the Canadian grain industry has adversely affected millers in virtually all regions of Canada and the U.S.

While Harrison didn’t have any hard numbers, “it is a fact that some mills have been forced to temporarily shut down because they do not have inventories of grain; this is true of both wheat mills and oat mills,” he said.

Inventory at some mills, he noted, was “near zero.”

Companies want to see action soon, he said — and that means moving product throughout the whole supply chain, not just sending a few shipments to Ontario and to B.C.’s Lower Mainland.

Demand is expected to grow in the future with the rise of the North American population and the growing yield being realized by grain producers, he added.

Some observers have told Harrison the current crop volume is the “new normal,” which he attributes to genetics and agricultural practices that have increased yields by a couple of percentage points a year.

“It’s critically important to do whatever we can in the shortest term possible so we can have predictable supply of milled grain products,” he said.

The total demand profile for North American millers is well-established and will only increase in the years to come, Harrison stressed, adding he’s never seen a situation like the current one facing millers.

— Dave Sims writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

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