Cool, wet spring delays spring seeding across most of Prairies

REGINA - A cool and wet beginning to spring has slowed the start of seeding in all three Prairie provinces.

Crop reports out this week for Manitoba, Saskatchewan and Alberta say some producers in the southern-most areas have been able to start seeding.

But many areas are at least a week behind the average start and some heat would help.

"Yeah, it's a late spring. It's not as late, I think, on average around the province as it was last year and nobody has forgotten that we had a fantastic crop last year," Saskatchewan Agriculture Minister Lyle Stewart said this week.

"Assuming we get most producers into the field in the next week or so ... we'll get this crop in in good time."

Stewart used the oft-repeated adage that a crop has never been lost in April or May.

Farmers are gearing up for seeding despite a rail bottleneck that has meant many still haven't been fully paid for last year's crop.

The federal government says about 2,700 grain and oilseed producers in Western Canada have tapped a program that offers cash advances for a total of $200 million. But so far that's below the $204 million worth advanced to about 2,400 farmers last year.

The program is designed to provide farmers with financial flexibility through short-term loans of up to $400,000 each.

Federal Agriculture Minister Gerry Ritz said there's no concern that farmers will over-extend themselves.

"The average loan is still less than $100,000, which is interest free," he said. "I think there are five per cent of applications that actually hit the $400,000."

Farm Credit Canada, which provides financing to Canadian producers, says it's had nearly 20,000 applications for various loans for seeding needs.

But its chief operating officer, Remi Lemoine, said that's not a big difference from last year.

"We're not overwhelmed with applications for trying to refinance last year's operating lines ... but the ones that do apply, they're kind of urgent," he said. "There's significant pressure there for the ones that haven't been able to move enough grain to cover their operating costs from last year yet."

Normally, farmers would have had most of their crop moved by now and their lines of credit cleared.

"It's an overlap due to timing of the movement of the grain, so we're not really experiencing a lot of financial stress due to just bad markets and price," Lemoine said.

Canadian National (TSX:CNR) and Canadian Pacific (TSX:CP) railways have blamed the backlog on the record size of the harvest and extremely cold weather. The companies have said they had to use shorter trains during freezing temperatures to ensure brakes could be used properly and that meant less capacity.

The federal government introduced legislation in March to amend the Canada Grain Act and the Canada Transportation Act in a bid to clear the grain backlog.

One change mandates CN and CP to move a minimum amount of grain or face a penalty of up to $100,000 a day.

Ritz said the rail companies are doing a decent job.

"The railways have hit their targets the last two weeks, hit the numbers of cars. In fact, they've surpassed the numbers of cars," he said.

"They said they can do 11,000 cars between the two of them weekly. We're going to hold them to that. If they go beyond that, great. If they slip below that, they'll pay a fine."