A Grain Exporter’s Perspective

ICS Annual Dry Bulk Conference 2021

November 18, 2021

Agenda

1.Prairie Crop Production

2.Canola Crush Expansion-what is going on?

3.Anchorage Issues and Low Hanging Fruit

Prairie Crop Production

Source: Canadian Grain Commission and Parrish & Heimbecker Ltd.

Exports from CGC Licensed Facilities by Port Region and Destination 2020/2021 Crop Yearmillion metric tonnes

Canola Product Flow (2020/2021 crop year, in millions of tonnes)

Source: Statistics Canada, Canadian Grain Commission and Parrish & Heimbecker Ltd.

Wheat (exc. Durum) Product Flow (2020/2021 crop year, in millions of tonnes)

Source: Statistics Canada, Canadian Grain Commission and Parrish & Heimbecker Ltd.

Durum Wheat Product Flow (2020/2021 crop year, in millions of tonnes)

Source: Statistics Canada, Canadian Grain Commission and Parrish & Heimbecker Ltd.

Prairie Region Soil Moisture(April & May 2021)

Ap

ril

May

April 5, 2021 April 12, 2021 April 19, 2021 April 26, 2021

May 10, 2021 May 17, 2021 May 24, 2021 May 31, 2021

Source: Agriculture and Agri-Food Canada (https://agriculture.canada.ca/en/agriculture-and-environment/drought-watch-and-agroclimate/agroclimate-maps)

Prairie Region Soil Moisture(June & July 2021)

Jun

eJu

ly

June 7, 2021 June 14, 2021 June 28, 2021 June 30, 2021

July 5, 2021 July 12, 2021 July 19, 2021 July 26, 2021

Source: Agriculture and Agri-Food Canada (https://agriculture.canada.ca/en/agriculture-and-environment/drought-watch-and-agroclimate/agroclimate-maps)

Prairie Region Soil Moisture(August & September 2021)

Au

gust

Sep

tem

ber

September 6, 2021 September 13, 2021 September 20, 2021 September 27, 2021

August 9, 2021 August 16, 2021 August 23, 2021 August 30, 2021

Source: Agriculture and Agri-Food Canada (https://agriculture.canada.ca/en/agriculture-and-environment/drought-watch-and-agroclimate/agroclimate-maps)

Prairie Region Soil Moisture(October 2021)

Oct

ob

er

October 4, 2021 October 11, 2021 October 18, 2021 October 25, 2021

Source: Agriculture and Agri-Food Canada (https://agriculture.canada.ca/en/agriculture-and-environment/drought-watch-and-agroclimate/agroclimate-maps)

Prairie Crop Planting Progress vs. 5 Year Average

Source: Manitoba, Saskatchewan and Alberta Provincial Crop Reports and Parrish & Heimbecker, Limited

11%

18%

11%

5%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

May 1 May 8 May 15 May 22 May 29 Jun 5

5 year average spring 2021

additional 18% of crop area planted by mid May vs. 5 year average

Cropland NDVI: Overall Prairie Region AverageNDVI: Normalized Difference Vegetation Index

Source: Statistics Canada Crop Condition Assessment Program (https://www35.statcan.gc.ca/CCAP/en/index)

Jun 27 to Jul 3extreme dryness

May 16 to 22early planting

Aug 22 to 28general rain / late regrowth

Spring Wheat YieldsStatistics Canada Crop Metric Application

*general regional

canola, wheat,

barley, pea yields

vs. 5 year

average based

on Statistics

Canada

September

estimates75%*

75%*

75%*

50%*

Prairie Production of 9 Major Cropsmillion tonnes

Source: Statistics Canada Field Crop Reporting Series

1 includes all w heat, barley and oats

2 includes dry peas and lentils

12.6 14.4 13.7 18.4 16.3 18.2 19.4 21.3 20.5 19.8 19.412.6

30.032.7 34.9

48.0

36.6 36.240.1 38.5 40.7 44.5 46.9

27.5

0

10

20

30

40

50

60

70

80

90

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

trendline

Canola Cereal Grains1 Pulse Crops2 Corn, Soybeans & Flaxseed

Exports, Domestic Use and Stocks Scenariocanola, wheat and durum 2021/2022 crop year vs. 3 year average

Source: Statistics Canada and Parrish & Heimbecker, Limited

Canola Wheat Durum

9,900

4,200

10,500

9,300

3,200 1,200

3 yr avg 2021/2022

ending stocks domestic disappearance exports

4,600 2,800

8,100 7,200

19,700

13,200

3 yr avg 2021/2022

ending stocks domestic disappearance exports

1,100 550

900

800

5,200

2,950

3 yr avg 2021/2022

ending stocks domestic disappearance exports

Strong Crop Prices…Saskatchewan Cash Prices

Source: Saskatchewan Agriculture: (https://www.saskatchewan.ca/business/agriculture-natural-resources-and-industry/agribusiness-farmers-and-ranchers/market-and-trade-

statistics/livestock-statistics/market-trends)

…Rising Input Costsgrain cost of production and dollars at risk increasing significantly

Source: Parrish and Heimbecker, limited

$0

$200

$400

$600

$800

$1,000

$1,200

Jul 20

14

Oct

20

14

Jan

20

15

Ap

r 20

15

Jul 20

15

Oct

20

15

Jan

20

16

Ap

r 20

16

Jul 20

16

Oct

20

16

Jan

20

17

Ap

r 20

17

Jul 20

17

Oct

20

17

Jan

20

18

Ap

r 20

18

Jul 20

18

Oct

20

18

Jan

20

19

Ap

r 20

19

Jul 20

19

Oct

20

19

Jan

20

20

Ap

r 20

20

Jul 20

20

Oct

20

20

Jan

20

21

Ap

r 20

21

Jul 20

21

Oct

20

21

Fertilizer (average NPKS blend)

Canola Crush Expansion

Canola Headlines

Canola 1o1

• Canola is a seed that can be separated into about 43% oil and 57% protein meal.

• ~ 12% of the canola grown in Canada is consumed in Canada.

• The protein is pelletized and requires special handling vs grain, and requires special storage and handling.

Viterra: 2.5 MMT (2024)

Cargill: 1.0 MMT (2024)

Richardson's: 1.2 MMT (exp)

Ceres Global: 1.1 MMT (2024)

Announced Canola Investments

3. 3.4 4.1 4.86.3

8.3 9.210.4

14.16.

4.95.4

5.5

7.2

7.9

9.2

10.5

11.8

8.6.

0.

5.

10.

15.

20.

25.

2000 2005 2007 2009 2010 2015 2016 2020 2023 2025

MY

N M

TCrush & Seed Exports

Crush Seed

PROJECTED

As Canadian canola crush expands… seed exports projected to drop. Most of that reduction will be through the Port of Vancouver

Tra

nsfa

t

Bio

fue

ls Chin

a

Ren

ew

ab

le fu

els

Partially Offset by Increased Meal & Oil Exports Requiring Specialized Handling Facilities at the West Coast.

3.2 3.4 3.4 4. 4.

4.64.9 5.3

7.68.7

0.

2.

4.

6.

8.

10.

12.

14.

2018 2019 2020 2023 2025

MY

N M

T

Oil & Meal Exports

Oil Meal

PROJECTED

Source: COPA Oil & Meal Total Exports 2018-2020

Where do products go? Meal

Export via Vancouver

California

Wisconsin

ON/QC

PNW

Where do products go? Oil

Export via Vancouver

USA - Biodiesel

USA - Food Service

ON/QC - Food Service & Biodiesel

Anchorage Issues and Low Hanging Fruit

PUBLIC OPPOSITION

Active Vessel Traffic Management Goals

• Reduce transits between Van Isle and Van Harbour

• Reduce time spent at Anchorage

Challenge

• Hard to do with growing volumes and complex supply chain with LD rail connections over mountains in a Canadian winter.

Question

• What if we could improve anchorage utilization for grain vessels with a simple change without spending a dime?

Chance of Precipitation in Portland and Vancouverthe percentage of days in which precipitation is observed, excluding trace quantitiesWeatherSpark.com

Source: https://weatherspark.com/compare/y/757~476/Comparison-of-the-Average-Weather-in-Portland-and-Vancouver#Sections-Precipitation

Average Monthly Rainfall in Portland and VancouverWeatherSpark.com

Source: https://weatherspark.com/compare/y/757~476/Comparison-of-the-Average-Weather-in-Portland-and-Vancouver#Sections-Precipitation

Simplified Timeline: Feeder Hole Loading

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Tarping Seized

Feeder Hole Seized

Feeder Hole File Reopened

Feeder Holes Agreement

Tarping on Hatch

Job Arbitration begins

Industry Arbitration begins

Arbitrator’s Decision

10 years

Arbitrator’s conditions meet

loading during inclement

weather is possible, but

only done in extreme

circumstances

Feeder Hole Loading Protocol

Vancouver Weekly Tonnage Loaded vs. Days with Total Precipitation above 8 millimeters Source: Quorom Corporation

CN rail strike,

blockades

Vancouver Weekly Tonnage Loaded vs. Days with Total Precipitation above 8 millimeters Source: Quorom Corporation

533,000 518,000423,000

0 to 1 days (n=29) 2 to 4 days (n=34) 5 to 7 days (n=3)

# of days in loading week with above 8 mill imeters of rain (n = number of weeks in sample)

20%

weekly average tonnes

Survey of Grain Ships Coming to Vancouver Source: Colley West Shipping Limited

extrapolation for non responses suggests that approximately 75% to 85% of grain ships coming into Vancouver have the

ability to load using feeder holes.

feeder holes66

no fe

ed

er

hole

s

12

no response32

85% of respondents indicated having feeder holes

survey of 110 grain ships completed from January to May 2021

Feeder Hole Loading

There’s a 70% chance

of rain greater than

5mm in next 24 hours.

Don’t bother ordering

labour to load through

feeder holes

CRB Example

• Any delay in loading by vessel shall be subject to a charge of $12,000.00 for each hour or fraction thereof.

• Cement Hole Loading not an ILWU safety or manning issue

• Any vessel equipped with openings in the hatch covers, commonly referred to as cement holes, will be required to make use of them when needed during loading at the berth. Refusal to use these openings will result in delay of berth charges of $12,000 per hour or fraction thereof.

• “Rain Letter” not an LOI

Call to Action

• Safety is paramount for all involved.

• Excellent Safety Record in CRB where collective agreement allows continuous operations during rainfall through cement feeder holes

• A more efficient Port means increased capacity and more hours for ILWU not less

• All stakeholders need to come together and get this done perhaps led by VFPA

• Cost of not doing anything is currently $2K / hr and more time at anchor

Thank you!