CP Shutdown Another Potential Blow to Agriculture

Jim Rogers Agri-business, General, Trade

By Clint Thompson

The ongoing labor dispute that shut down the Canadian Pacific (CP) Railway on Sunday could have a ripple effect down to the specialty crop sector in the Southeast.

CP Shutdown
Andrew Walmsley

Andrew Walmsley, senior director for congressional relations at American Farm Bureau Federation, said the shutdown means approximately 140,000 barrels of oil are not being shipped out daily. Fertilizer shipments, which comprise 15% of CP’s operations, are also being impacted.

“The timing couldn’t be any worse as we get into the spring planting season and all the other supply chain headaches. If this lingers, we’ll start seeing some significant negative impacts to U.S. agriculture,” Walmsley said. “Anything that continues to put a strain on supply should have that impact to prices. We’ve already seen fertilizer at least double in the past year. I would expect particularly the areas that are served by the CP, you go from a price hike to an availability problem. We’ve heard from some of our farmers already that there’s challenges potentially receiving the inputs they need going into spring planting.”

It adds to an already unstable agricultural sector where producers are struggling to obtain inputs or paying the inflated costs that each input demands.

“We don’t need any more headaches. I don’t know that you would chalk this up to a black swan, but we’ve went through a flock of black swans at this point,” Walmsley said. “This is definitely not a good situation. The longer it lasts the more we’ll see impacts. If this is just a short stoppage strike, the impact won’t be too great, because I think many industries have been preparing for the possibility. We sent a letter to the president a week or two ago highlighting concerns with the strike. I know our Canadian counterparts did the same with the Canadian government.