Railroad Risks Create Potash Probz

Mar 22, 2022

GIPHY

Labor dispute negotiations at Canada’s second-biggest railroad have derailed, leaving workers locked out and sending supply chain shocks up and down the track. 

Canada Pacific Railway Ltd covers much of southern Canada and tracks as far south as Kansas City. They move U.S. grain to export terminals in the Pacific Northwest and potash from Canada into overseas markets, including the U.S. 

Canada, Belarus, and Russia are the major suppliers of the world’s potash. Three for three have a current lack of locomotion in world markets. 

Issues at hand: Wages, benefits, and pensions. Just a few small things. The union said it had begun to strike across Canada and noted 3,000 engineers, conductors, and yard workers are impacted.

Farm fears: U.S. industry groups wrote a joint letter to President Biden requesting he and the Canadian government support sidestepping a strike. Western sanctions against Russia are raising the price of potash, so fears of further fertilizer price increases are mounting.

Where this goes: Federal mediators are supporting the talks’ turntables, with the Canadian government hoping for a negotiated settlement. 

In the meantime, Canada’s Nutrien has said potash production may be pulled back at its Saskatchewan-based mines if the shutdown stretches past a few days. The Canadian government can try to pass legislation that would order striking workers back to their jobs—but that may be a little engine that couldn’t.