Allison Lampert

(Reuters) – Canada demanded a swift negotiated resolution to the work stoppage at its second-largest railway. Canadian Pacific Railway Ltd. This is likely to exacerbate a supply shortage sparked in part by Russia’s invasion Ukraine.

Industry groups fearful of an ongoing strike that began Sunday are asking the Canadian government for back-to work legislation to quickly end the dispute.

Canada is second in size after Russia. According to an industry group 75% of fertilizer and grain are transported by rail in Canada.

Already, the agriculture sector faces price increases and shortages due to Western economic sanctions on Russia (and Belarus), two of the largest fertilizer producers in Western Europe.

Wade Sobkowich is the executive director of Western Grain Elevator Association. He stated, “The world has more need for Canada’s grains now than ever before.”

He stated that railways had struggled to fulfill half the weekly grain industry demands despite the fact this year’s crops being 35% less than the average. And he warned of the possibility that a CP strike would make the situation “terrible” to “catastrophic.”

The negotiations between CP, the Teamsters Canada Rail Conference (which represents unionized locomotive engineers), are being handled by federal mediators.

We have confidence in their ability and will reach an agreement. Canadians expect that they will do it ASAP,” Seamus O’Regan, Canada’s Labor minister said.

Canada’s work disruption could also be felt beyond the border, as CP’s rail network extends as far as Kansas City (Missouri) in the United States.

Mike Steenhoek from Iowa is the executive director for the Soy Transportation Coalition. His concern is that there are no fertilizer shipments to America by railroads.

Steenhoek said in an emailed newsletter, “The current war with Ukraine puts additional pressure upon delivering U.S. agricultural output and inputs,”

Canadian Pacific operations being shut down will increase the stress.”

Corey Rosenbusch is the Fertilizer institute president and CEO. He stated that the United States imports 86% from Canada. Much of this potash comes by train.

Karen Proud is Fertilizer Canada’s President and CEO. She stated that it was crucial to timing because “we are about 4-6 weeks away” from seeding in Canada. The U.S. will start much earlier.

Nutrien (NYSE:) Ltd could weather a CP closure for a few more days. The world’s largest fertilizer manufacturer has been moving potash from Canadian mines into U.S. warehouses in preparation for spring planting. Seitz stated that a prolonged shutdown could force Nutrien into slowing down potash production.

Canada’s supply chain is in serious trouble after flooding last year caused by floodwaters in British Columbia, which prevented access to Canada’s largest port.

According to industry estimates, a strike of eight days at Canadian National Railway (TSX) Co cost the fertilizer sector between C$200m and C$300m ($159 million-$238m).

According to The Mining Association of Canada (MAC), CP work-stoppages increase business operational costs, and lower confidence in Canada for investors looking for supply chain reliant businesses.

($1 = 1.2601 Canadian dollars)