Cdn. ag group supports merger between CP and KCS

Mar 30, 2021

The merger would create the first Canada-U.S.-Mexico rail network

By Diego Flammini
Staff Writer
Farms.com

At least one Canadian ag organization has voiced support for a proposed railway merger.

Canadian Pacific Railway (CP) is in talks with Kansas City Southern (KCS) to purchase the U.S. railway for about US$29 billion (CAD$22.96 billion).

If the merger is allowed to go through, it would create a 32,000-kilometre (20,000-mile) rail network combining Canada, the United States and Mexico. The network would also include access to more than 20 ports.

CP KCS map
CP/KCS map

It’s an exciting opportunity for the ag sector, said Daryl Fransoo, chair of Western Canadian Wheat Growers Association. He’s also a producer from near Glaslyn, Sask.

“We’re cognizant that a lot of our grain doesn’t go to Mexico, but (the merger) does open an integrated shipping line that could benefit Canadian farmers in the future,” he told Farms.com. “It’s a positive just to have the infrastructure in place to use if the opportunity presents itself.”

Another benefit of the proposed merger is it provides a kind of safety blanket for sectors relying on sea transport.

Canadian shipments have been delayed by weather and labour issues at national ports in the past.

Having such an extended rail network could prevent those kinds of issues from disrupting transportation, Fransoo said.

“If there’s a work stoppage at a Canadian port or some other situation, we’ve got this rail line that’s already integrated and it would be easy to redirect those goods to get to their destination,” he said.

The merger still has some regulatory hurdles to clear before it can become official.

The five-person Surface Transportation Board, an independent U.S. regulatory body, must approve the acquisition.

Shippers are likely to have input during the hearings, said Todd Tranausky, vice president of rail and intermodal at FTR Transportation Intelligence.

“Rail shippers will have a big voice at the Surface Transportation Board and if they are not satisfied that the carriers can maintain service levels during the transition and improve them going forward, then they may not support the transaction at the regulator,” he said, Trains.com reported. “The board has been increasingly focused on shippers’ concerns in recent years and I would expect they will play an outsized role in how the board views this transaction through the process.”

The final approval would happen in 2022, CP said in a statement.

Video: The 15-Year Bet Behind Every New Variety!

Canada is trying to decide how much agricultural research capacity it can afford to lose. Brian Rossnagel believes the better question is whether the country can afford to rebuild it.

The longtime barley and oat breeder makes the case with a simple fact about his profession: the consequences of today’s decisions may not become visible for 10 or 15 years.

“Pick the right parents. That’s the biggest thing,” Rossnagel says. “If you pick the wrong parents, you’re not going to get anywhere—and you don’t know that until 10 years, 15 years later.”

That warning carries particular weight as Agriculture and Agri-Food Canada moves to reduce spending and streamline parts of its science operations. The department’s 2026–27 plan anticipates the loss of approximately 665 positions by 2028–29 and says some research will be reduced where capacity exists in academia or industry. AAFC says the changes will make its science operations more cost-effective over the long term.

For Canada’s seed industry, Rossnagel’s career illustrates what is at stake.

This fall, the retired University of Saskatchewan breeder will be inducted into the Canadian Agricultural Hall of Fame. During his 35-year career at the Crop Development Centre, he helped develop more than 100 barley and oat varieties, including CDC Austenson—one of Western Canada’s most widely grown feed barleys. His induction recognizes not only those varieties, but the collaboration and research system that made them possible.

Rossnagel is quick to emphasize that none of it was the work of one person.

“The first thing I thought about was all the other people who contributed to whatever success I and my program had over the years,” he says. “We know that it’s not an individual who does this. It’s a group—a team.”

That team extends well beyond the breeder whose name appears beside a variety. It includes technicians, pathologists, quality specialists, statisticians, regional testing sites, seed growers and industry partners. It also includes the breeders who came before and those who will carry the germplasm forward.

CDC Fraser barley, for example, moved through three breeding careers. Its parents came from Brian Harvey’s program. Rossnagel advanced the material after Harvey retired, and Aaron Beattie later guided it through registration and release.

That kind of handoff is normal in plant breeding. The person who makes the original cross may never see the resulting variety reach farmers.

It also explains why lost research capacity cannot simply be switched back on when budgets improve.

“If you shut it off, it’s very, very difficult—and particularly costly—to start it up again,” Rossnagel says. “If you have to start from scratch, it’s going to be at least 10 years before anybody notices whether you’re getting anything done or not.”

The concern is not simply how many experimental lines Canada can process. Modern equipment, statistical tools and genetic technologies allow today’s breeding programs to evaluate tens of thousands of lines—far more than Rossnagel could handle when he entered the field in the early 1970s.

But efficiency and automation do not generate every idea.

“If you pare back down, and instead of having six or seven individual scientists concentrating on wheat breeding, you go down and say three people could handle all this, well, that’s half the ideas gone,” he says. “Particularly if you happen to lose the three people who had the really neat and innovative ideas, boy, that’s a problem.”

It is a timely distinction for Canadian agriculture. Consolidating programs may preserve the volume of material moving through a system, at least initially. It may not preserve the diversity of thinking, regional knowledge or willingness to pursue unconventional crosses.

That regional knowledge matters because Canadian agriculture is not one uniform production environment. A variety suited to southern Alberta may face different disease, moisture and maturity pressures than one grown in Manitoba, Ontario or Atlantic Canada.

“Agriculture is applied biology,” Rossnagel says. “Biology, all around the Earth, moves from the poles to the equator. It does not move from Newfoundland to B.C. like politics do.”