Elevators working in reverse as Alberta cattle feeders face increasingly desperate feed shortage

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].”