Ship 500,000 tons of grain/week or get fined (CP/CN)

[ZenOps]

http://www.thestar.com/business/2014/03/07/ottawa_orders_cn_cp_to_move_grain_or_face_fines.html

Pretty iffy to me.

If you can make much more shipping oil, then why would you bother to ship grain? Its not like people in the US with the obesity epidemic need more food.

The Canadian government does not own the railways (else of course, they wouldn't have to use the threat of fines)

[ZenOps]

Add: The US stance on food.

http://www.nytimes.com/2011/10/24/science/earth/24water.html?pagewanted=all&_r=0

They pay farmers to not grow food (and conserve water instead) in parts of the US.

I'm not totally sure that disincentiving oil distribution through fines was the right thing to do. If it was the US, they would push more grain through by *paying extra* to ship grain instead of oil.

Besides, who is to say that oil is not more important than grain? Maybe some drought striken country needs the oil to pump water (which is more important than food when it comes down to it)

Government is really really really starting to overreach. Protest in front of parliament anyone?

[SKR]

I'm shocked.

(Completely not shocked, saw this coming.)

[Go4Long]

I'm not sure why you're making this out to be about the railway making more shipping oil...Oil is a TINY portion of the railway's business.

Coal, Potash and Grain are all way higher in terms of volume than Oil.

[AndyL]

Because it's zenops... And CN/CP are big business... Why else?

I feel like I'm missing part of the equation here somewhere...

[Arash Boodagh]

Cant we turn that food into biofuel and extract more oil out? Fuck humanity.

[Supa Dexta]

I say we build some new grain pipelines, to get away from the rail control grain currently is subject to.

[ZenOps]

Originally posted by Go4Long
I'm not sure why you're making this out to be about the railway making more shipping oil...Oil is a TINY portion of the railway's business.

Coal, Potash and Grain are all way higher in terms of volume than Oil.

Maybe it shouldn't be that way. Maybe its better that we ship petroleum products to other countries so that they can grow food locally.

The argument was sound back in the day of the 9 cent/pound banana, where it cost more to ship that it did to produce.

Harper government bending to the whining farmers? I say that CP/CN will just see the $100,000 per day fine as cost of doing business and continue shipping petroleum. Fuck the government. If this was the US and you had to tell Warren Buffett what he could or couldn't ship on his railcars - He be running at the government officials with a baseball bat.

And you government twats who took away the penny too.

Why do I get a picture in my mind of a Columbian coffee picker with 100-pound sacks on his donkey, rushing to town in order to not get whipped by his master and given no pay for the day if late...

F*cking government. If they push too hard, I say that CP and CN should stop shipping *everything* for a couple weeks. My hand is on the emergency brake cord... Say bye bye to all trade.

[Jeeper1986]

Originally posted by Go4Long
I'm not sure why you're making this out to be about the railway making more shipping oil...Oil is a TINY portion of the railway's business.

Coal, Potash and Grain are all way higher in terms of volume than Oil.

people just believe the media lol

[cancer man]

Read this and it's true.Easy to find.Don't need no stinking grain.


http://www.eattheweeds.com/cattails-a-survival-dinner/

[ZenOps]

Seriously, if grains were that valuable to the US and Mexico and food producers, they would be using alternate means of shipping, making agreements for emergency gasoline transport over roads.

But that ain't happening. Eggos only have so much appeal.

Although its ironic that many produced goods that require grains may not have actual grain in them at a time where there is arguably a bumper crop in Canada. AKA the not quite real bread Subway sandwich.

The system is messed up, that is for sure.

But fining the rails just means less and less railcars in the future.

I propose a $1 per acre credit to every farmer that does not plant grain this year, and a $1 credit up to 40 acres to every farmer who risks planting vegetables of some sort. They don't get anything for letting fields lay fallow as is now.

Or, if the current government continues this path: Fine $200 per acre for growing grain?

[HiTempguy1]

Would someone care to explain what exactly is going on with the grain shipping and what not?

I don't quite understand why this is an issue... you would think the rail companies would want to ship a product, as that's their job and they get paid to do it. So why wouldn't they ship as much as they could?

[Xtrema]

Originally posted by HiTempguy1
Would someone care to explain what exactly is going on with the grain shipping and what not?

I don't quite understand why this is an issue... you would think the rail companies would want to ship a product, as that's their job and they get paid to do it. So why wouldn't they ship as much as they could?

NDP and Liberals: End of Wheat board means they lost single point of bargain for train resources to get it moving.

Conservatives: End of Wheat Board has nothing to do with it, it's just bumper crop and CP and CN's problem.

CP and CN: Ports can't take it off their hand anyway as there it no outlet and market to absorb the bumper crop.

[Thomas Gabriel]

I know nothing about this, but based on Xtrema's summary:

This is like an E&P hedged at $90 wti. If the price is higher than that they forfeit the upside. Weather was good here and those farmers will now have to burn some wheat. Cost of doing business. If they have huge downside exposure and very limited upside, something is wrong with the business model. At the same time, the price of meat is going up massively this year. Perhaps those farmers could achieve a better $/acre raising cattle. Unless the bumper crop was truly extreme, the wheat board created an unnatural supply/demand balance and now there needs needs to be an adjustment.

[HiTempguy1]

Originally posted by Xtrema

CP and CN: Ports can't take it off their hand anyway as there it no outlet and market to absorb the bumper crop.

So basically... we have a whole bunch of grain with nowhere to go?

Then why are other countries all alarmed about it? (as recent news/conferences would suggest)?

[A|pine]

This is related to the second article not the original. Agriculture (irrigation) uses more surface water than the petroleum sector. On the flip side, what about water consumption for manufacturing biofuels?

http://www.albertawater.com/learn/what-is-water-used-for-in-alberta

Here is also a report in 2009 which breaks down water usage from groundwater versus surface.

http://www.environment.gov.ab.ca/info/library/6364.pdf

[ZenOps]

http://business.financialpost.com/2014/04/03/warren-buffett-could-be-unexpected-beneficiary-of-ottawas-new-grain-rules/

And so the crippling rules do benifit those who are not restricted by the rules. Namely of course the US, and most directly - Warren Buffett.

So who is destroying the profitability of Canada?

It reeks of corruption, if some government official is caught in Canada taking million dollar bribes from the US to pass legislation of this type.

But then again, they pay farmers in the US to not grow food. Beware farmers, once the legislators are done with the rails - they will be squeezing you in fines for any minor transgression in growing food. I think I could actually really without doubt, blame Rob Anders for this one. Rob Anders gonna be suing the farmers for growing food soon.

"First they came for the rails, and I did not speak out-- Because I did not work on the rails. Then they came for me--and there was no one left to speak for me."