ANEROID, Sask. - Jerry Ruehs has a unique understanding of the tough times associated with Canadian grain: he grows it and he hauls it.As both an owner/operator and a farmer, he has to think about bot...
LOW ELEVATION: By January 2000 the bottom had fallen out of the canola market; it was selling for $239.61/tonne.
HELPLESS: Unlike the U.S. and EU, Canada seems unwilling to give its farmers much support.
ANEROID, Sask. – Jerry Ruehs has a unique understanding of the tough times associated with Canadian grain: he grows it and he hauls it.
As both an owner/operator and a farmer, he has to think about both sides of the shipper/carrier dilemma. Prices for grains, such as wheat, durum, barley, flaxseed, and canola, have slid into a seven-year trough, yet diesel prices aren’t far below record peaks.
The two grind on freight rates like millstones. “It puts you in a squeeze,” says Ruehs.
Despite the negative conditions, Ruehs, who hires out a majority of the work on his farm, has actually had a run of good luck lately.
He’s been a driver with Bickner Trucking Ltd., of Vanguard, Sask., for two years, and the company recently managed to push up its rates after a freeze of about five years.
“It had to come up,” he says, adding that the businesses of growing and hauling grain have gone through extreme change in the last few years.
“There’s been no general directions – it’s just a hodge-podge system, where you experiment. I don’t know how it could have been any better, but everybody has sort of left for themselves.”
“We’re at the lowest point,” says Dwayne Mooney, a dispatcher and co-owner of Melfort, Sask.-based Ag-Com Transport.
“With high fuel, as far as your profit margin is, we’re at the lowest we’ve ever been at, just for the simple reason that our expenses are so high,” says Mooney, who’s been around agricultural rigs for 11 years.
With grain prices so low, Mooney contends, “the freight rate isn’t going up to where it should be. Which means we’re not getting what we need to make ends meet in our industry.”
According to Statistics Canada, the price of canola from Saskatchewan went from $374.05/tonne in January, 1998 to $364.69/tonne a year later. By January 2000, the bottom fell out and canola was fetching no more than $239.61/tonne. It ended the calendar year at $237.43/ tonne, after dropping as low as $220.78/tonne in August.
Farmers are getting less and less for their grain because Ottawa isn’t doing enough to protect Canadian farmers, says Canadian Agricultural Association (CAA) president Bob Friesen.
“For every dollar that a wheat farmer receives in the (European Union), 58 cents they get from the government. In the U.S., every dollar that a wheat producer gets, 46 cents comes from the government. In Canada, it’s only 11 cents.”
In fact the U.S. has increased its farm support by 283 per cent over the last five years.
“We have a lot of farmers staring a very hopeless situation in the face this spring,” adds Friesen, who notes he doesn’t fault truckers for pushing for better rates.
“You can’t blame a truck driver for trying to make a living either.”
The poor freight rates have forced trucking companies to become leaner and meaner operations, Mooney says.
As dispatcher, he feels a lot of that pressure falls on his shoulders. As lucrative as it may be to make runs to Alberta, where the cattle industry is seeing strong prices for its product, Ag-Com must be more selective because, says Mooney, “we have to keep our trucks loaded pretty near all the time, if we don’t have a back haul, we don’t go.” He notes that when the price of diesel was lower, the company didn’t have to be as fussy with its load-selection.
“Your cost-of-operation is never a problem as long as you can cover it and still maintain profitability,” says Richard Stuart, Canadian Bulk Haulers Association president.
Stuart explains that because farmers are suffering through a depression in grain prices, “that is definitely putting pressure on them in terms of ability to pick up more of the costs of transportation of their goods,” he says. “Naturally, that gets downloaded onto us.”
“Right now, I think a lot of us are sitting on the edge of a sword,” complains a nervous Stuart. “Much more pressure and we’re going to get hurt.” n