Bigger crops require increased port capacity

By Dallas Carpenter

“When it comes to terminal capacity on the Coast, I would have to say the more the better.”

That statement is from Mark Hemmes, President of Quorum Corporation, the national grain transportation monitor. It parallels the findings of an analysis on port capacity commissioned by Sask Wheat (PDF).

The analysis, conducted by Richard Gray and Mohammad Torshizi of the Department of Agriculture and Resource Economics at the University of Saskatchewan, indicates that an additional 10 million metric tonnes (mt) of annual throughput port capacity on Canada’s West Coast could be worth several billion dollars to Prairie farmers.

“Right now,” says Hemmes, “the estimates that the WGEA (Western Grain Elevators Association) has put forward, and I’ve seen the math on it and it makes sense to me, would put the capacity at somewhere between 30 to 32 million tonnes a year. They’re quickly approaching 25 million tonnes today (for the 2016-17 crop year). So, we’re getting to that point soon where we’re pushing the wall.”

The increasing needs of Western Canadian grain producers, who are producing larger crops and require a reliable and affordable transportation and handling system to get their crops to market, will mean adaptations in all aspects of the system. Increasing port capacity is among the top priorities in meeting producer needs.

Shippers are aware of the needs of producers and have responded with a number of terminal expansions and the announcements of new export facilities. The expansions of the Richardson (an additional 80,000 mt) and Pacific Terminals (an additional 42,000 mt) at the Port of Vancouver have begun to ease some of the movement issues, especially during the post-harvest bump, and continued expansion should have an impact on free-on-board prices and basis levels, which are passed on as overhead costs for farmers.

“I think the expansions have taken some pressure off,” says Hemmes. In the next year, Alliance Grain Terminal will be adding capacity that will add an extra 500,000 to 1 million mt per year of throughput and G3 Canada are building their new terminal with annual throughput capacity estimated at 6 million metric tonnes or more. Parrish and Heimbecker Limited (P&H) and Paterson GlobalFoods Inc. have announced a new terminal for the Fraser Surrey Docks which will have storage capacity of 77,000 mt, all of which bode well for the future of grain transportation.

“Eventually, I think that will give enough room there that people won’t have to be concerned with throughput at the port. It will open up space where shippers can, conceivably, move more volume with fewer restrictions.”