| | Updated September 2010
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Introduction | Step-by-step procedure for using producer cars | Advantages and disadvantages of producer cars | Producer car questions | Additional information | Return to Grains & Oilseeds Marketing page
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Introduction
Producer cars are railway cars that are loaded and shipped by producers. The Canada Grain Act requires that producer cars are available to farmers. The administration of a producer car can be done by a grain company, the Canadian Wheat Board or the producer can self-administer the car. A producer car offers a delivery alternative for growers to load a rail car and ship their own grain without using primary or inland terminal elevator facilities. Producer cars can be used for either CWB or non-board grains. A grower using a producer car does not necessarily market his own grain, but he does load his own railcar. The reward for the extra effort of not using an elevator is a saving of the fees and tariffs charged by elevators. Savings vary depending on primary elevator charges and other factors in the marketing decision.
Step-by-Step Procedure for Using Producer Cars
Calculating the price
It is important to figure the potential savings, before ordering a producer car.
All aspects of price should be considered. For example, consider when payment will be received. Payment is received after the producer car is unloaded. Payment for delivering to a local market is usually made at delivery or very soon after. Also, keep in mind that it will take time from the date of application for the car until the car is actually spotted for loading. The car administrator - grain company, CWB - or the Canadian Grain Commission (CGC) should be able to estimate the delivery time lag on producer cars.
Find out what the basis is (cash price minus futures price), for crops with a futures market. Be sure to know which futures month the buyer is quoting the basis against. Producers can estimate the potential savings by comparing the producer car basis against the local elevator basis. See Basis – How Cash Grain Prices are Established for more details on crop basis.
For Canadian Wheat Board grains, the obvious saving will be in elevation costs. If there is a sufficient premium to justify the extra effort, a producer car is worth considering.
Producers must also decide when to lock in the price their grain. Grain does not necessarily have to be priced before ordering the car. Producers can also price it well ahead of shipping to protect against a price decline or they may ship it unpriced. This depends on the rules and contracts available from the grain buyer.
Application of producer railway cars
The next step is to apply for the car. Producer car allocation is handled by the Canada Grain Commission. An “Application for Producer to Obtain Railway Cars” form must be completed and sent to the CGC and to the agent handling the sale. There is a non-refundable application fee for each car requested.
Fill in the information needed to identify the grain to be shipped. The producer must identify himself by name, address, telephone number, and Canadian Wheat Board (CWB) identification or permit book number. A preference of the shipping week for the car to arrive is also entered.
The CWB monitors Board contracts and contract calls. A producer must have sufficient contract volume and contract calls available to be allocated a producer car. A farmer who over-delivers a small amount using a producer car will receive payment for the entire amount.
The Application form also requires that a producer fill in his or her Primary Delivery Point and railway. For CWB grains, Primary Delivery Point may affect the amount that can be shipped. A producer does not need to load the car at his primary delivery point, but he is still subject to any delivery restrictions that may relate to his primary delivery point. In this way, a producer car shipper does not gain an advantage over those who deliver through the elevator system.
The grain being shipped must be identified. State the grain, grade estimate, protein level (if applicable) and method of selling, either CWB Contract Series or non-Board. The type of grain shipped will affect the destination as well as time of shipping. Note that shipping lower grades than estimated may result in payment problems, and be a costly alternative to conventional delivery. For example, shipping feed grade wheat instead of number 3 CWRS wheat as a CWB delivery can be a costly error since the CWB discount for feed is often severe. Feed wheat would likely have been better marketed locally. A CGC grading office can provide an unofficial grade of a representative sample of the grain to be shipped.
Producers should specify the shipping week that they want the car to arrive. Week number 1 is the first of August. The week number increases with each passing week until the final week of the year, week number 52, which is the last week of July. The CGC allocates cars on a first come, first serve basis. If there are waiting lists for grain shipments by producer car, the CGC may restrict the allocations until the backlog is cleared. Efficiencies of the railway and terminal system are also considered, so a producer car may be allocated at a time when that same grain is being drawn from a particular shipping area.
On the Application form, the producer provides the shipping point, railway and the precise siding and placement on the siding of where the car is to be spotted at that delivery point. If the car is not spotted at precisely the right point on the track, or so far off that the producer cannot move it to a useable location, then the producer can request that the railway spot the car in a better location.
The producer will enter the destination of the grain on the Application form. For CWB grains, this information is provided in the approval letter. CWB grain is normally “poolable”, which means whichever port terminal is handling that particular grain and grade will unload it upon arrival. If a producer is administrating his own producer car, a terminal is appointed on his behalf. In this case, the producer shows his name as the administrator and leaves the elevator and consignee area blank to be filled in by the CGC. Upon approval of the application, the CGC will specify the destination for the producer to enter on the I-90 tag that the producer will staple on the railcar. For non-board grains, the producer will enter the delivery location on instruction from the grain buyer.
When a producer uses a grain company to administer a car on his behalf, the grain company will complete the Application for Producer Railway Cars. The producer just has to sign it. The level of service depends on the company chosen. Some companies provide more administrative assistance than others and fees vary accordingly.
Car approval
The CGC acknowledges the receipt of a producer’s application by sending a letter of confirmation to the applicant. This confirmation letter gives the number of cars, the car placement and shipping week, type and grade of grain, as well as the destination and an authorization number.
A producer should check this information to be sure that it is correct. If the information is correct, the producer is free to load the car once the car arrives. At the time of approval, the CGC notifies the railway to spot the car. It is a good idea for the producer to check with the car control centre of the railway company for confirmation of timing and placement. Note that, if a grain company administrates the producer car, all communication with the CGC is taken care of as part of the service package.
Loading the car
Hopper cars are easily loaded through the hatches on the top of the car. Track sidings have a slight slope, so if the auger is set up to load the down slope hopper first, then the car can be slowly moved from hopper to hopper as the car is loaded, saving the trouble of moving the auger.
Moving a car is usually relatively easy. First engage the manual brake. Then, slowly release the airbrake by pulling on the release valve rod. Slowly disengage the manual brake, and if the slope is enough, the car will move on its own. Otherwise, a crowbar or railcar jack must be used behind a car wheel to start the car rolling. Moving a car with a crowbar of car jack is best done with two people for safety sake and to avoid moving the car too far.
Before loading, check the railcar. Check that the slide gates at the bottom move and seal properly. Check that roof hatches seal properly and have no leaks or cracks. Make sure that the car itself has no cracks and is empty of alfalfa cubes, grain screenings or other grain. If the car is unacceptable, a replacement may be requested from the railway.
It is very important to record the car number before starting loading. It is difficult to find the car without that number if it is accidentally picked up before loading is finished.
The car must be loaded by the time the railway returns to pick it up. Producer cars must be allowed a minimum of eight hours for loading after the car is spotted. Cars, that are not loaded on time and are pulled away empty by the railway, will be cancelled.
DO NOT . . . . . . .
1. Do not overload either the car or exceed the track capacity. The weight allowed in the car, as well as the empty weight of the car, is stencilled on the outside of the car. It is possible to overload the car with heavier bushel weight grains, especially wheat, peas or exceptionally heavy barley. If possible, and if there is time to do so, check the weight as grain is loaded. However, if weighing is not available, carefully estimate the amount loaded. If the car is located on a “light” rail, it is possible to exceed the weight allowed on the line even though the car capacity has not been exceeded. Producers should check with the railway for maximum weights if they suspect that they will be loading on a light rail line.
The consequences of overloading a car can be severe. If there is a derailment, whoever loaded the overloaded car might be held responsible. All cars are track-scale weighed at some point en route. Cars found to be overloaded or unevenly loaded are side-tracked. The grain owner must remove the excess weight or even up the load. This is inconvenient at best, and side-tracking and unloading may result in significant additional fees.
2. Do not load grain containing excreta. Cars contaminated with excreta cannot be unloaded. An excreta-contaminated producer car that is unloaded into a terminal or ship contaminates the entire amount it is mixed with. Producers who ship excreta-contaminated cars will be required to pay the costs related to decontamination.
3. Do no treat a loaded rail car with fumigant. If your loaded car contains a fumigant, the railway will access substantial financial penalties.
4. Do not ship damp grain unless a terminal has agreed to accept it. Shipping damp grain without terminal agreement could result in the return of the grain to the producer at full shipping cost.
After the car is loaded
Once the car is loaded, the I-90 card and shipping report are completed. The I-90 is a tag that comes either from the CGC or the car administrator. The I-90 tag is designed to be folded over and stapled to the notice board on the side of the railcar. On the part that will face out after folding, the producer prints the destination terminal, grain type and grade, whether it is non-board grain, and whether it is to be “pooled” or not “pooled”. Pooled CWB grain can be handled by whatever terminal will take it. A producer prints his name, the shipping station, date shipped, destination, grain and grade, estimated dockage, car number, estimated shipping weight, and any other handling instructions on the part of the I-90 tag that will be inside once it is folded and stapled onto the car. This inside information is used by the CGC or buyer at destination to know how to handle the grain and the settlement.
Bills of Lading/Settlement Forms vary from company to company, but they all have the same basic information. This information includes:
- producer name, address, phone number and CWB Producer ID number
- car number and initials,
- grain, grade and weight estimate
- car type (CWB, non-board, administered, self-administered, dealer)
- contract number, if applicable
- shipping week, date spotted, date released
- railway company
- origin and destination,
- consigned terminal, and
- any special instructions.
The weight of grain in the car should be estimated in the description of car contents, even though the exact weight may not be known. The weight is used for insurance purposes in the remote chance of loss en route. Completed Bills of Lading must be
Once the car is loaded and ready for pickup, the producer must phone the administrator (for administered cars) or the railway (for self-administered cars) to “release” the car. The Bill of Lading must be sent to the railway immediately after the car has been loaded. At the time or writing, there is a $400.00/car fine imposed by the railways for failure to send a Bill of Lading to the railways immediately after loading a car.
Tracing the car
If an administrator is not used, it is necessary for the producer to trace his car by phoning the railway’s tracing number, and providing the car number. Since payment is based on the unloaded weight of the car, it is useful to know when it arrives. If an administrator if used, the administrator will contact the producer when the car is unloaded.
Reinspections
If you are unhappy with the grade and/or dockage assigned by the CGC inspector, you can request a reinspection. Shippers of producers cars have 15 days following the unload date to request a reinspection. Reinspections are made through your administrator or for self administered cars, in writing to the following:
Chief Grain Inspector
Canadian Grain Commission
900 – 303 Main St.
Winnipeg MB
R3C 3G8
Advantages and Disadvantages of Producer Cars
Advantages of producer cars
- Producer cars almost always produce higher net returns on grain sales. At the very least, farmers save the elevation charges.
- A producer car is only for a producer’s use alone. A producer may not have to truck the grain as far, and may avoid waiting in delivery line at an elevator.
- A producer may receive a higher grade or lower dockage than what is offered or negotiable locally.
Disadvantages of producer cars
- A producers/shipper must wait until the car is unloaded to receive payment.
- A producer/shipper may receive a lower grade or higher dockage than what may be negotiated locally.
- A producer must move an auger to the point where the car is spotted and then move it home again, unless a producer car loading facility is being used.
Producer Car Questions
Do I need to have a CWB Permit Book to order a producer car?
Yes, producer cars can only be used by farmers. The only way that the CGC knows for certain that the producer car applicant is actually a farmer is if he or she has a CWB permit book.
What about using producer car loading facilities?
Producer car loading facilities are not required to be licensed and bonded by the CGC as long as they meet certain conditions. The conditions, designed to protect producers are:
- The facility only handles grain on behalf of producers which is intended for loading into producer cars.
- The facility posts a notice advising producers that it is not licensed under the Act and that the Canadian Grain Commission will not be involved in disputes between the facility and the producer except when they arise at the port location.
- The facility does not buy and sell grain.
- The facility allows the Canadian Grain Commission access to its records.
Therefore, grain handled and stored at producer car loading facilities is not protected by security held by the Canadian Grain Commission. A list of producer car loading facilities exempted from licensing is available at: http://www.grainscanada.gc.ca/index-eng.htm
How long do I have to load the car?
You have a minimum of eight hours to load a car. The railway is only legally required to spot the car once.
Who makes the entry in the CWB permit book?
It is the producer’s responsibility to make the initial entry in the permit book as soon as the car is loaded with CWB grains. The net amount is entered when the unload results are achieved. This entry should be made either by the administrator or by you. Failure to make this entry immediately can result in a charge by the Canadian Wheat Board.
What happens in the case of a derailment, fire or theft of the product en route?
The railway has shippers-insurance. Anything they carry from the time the car is loaded and released to the time the car arrives at its destination is covered.
Can more than one producer apply for and load a producer car?
Yes, most hopper cars are bulkhead cars, which means that they have two or more separate compartments. Bulkhead cars can be loaded by more than one producer. Usually no more than two producers ship in the same producer car. Contact the CGC for details of how more than one producer can ship in one car.
Additional Information
- Canadian Grain Commission, Winnipeg, MB. General Information Phone: 800-853-6705
- CGC Producer Car Officer, Winnipeg, MB. Phone: 204-983-3368 or 204-984-2079
- CGC Producer Car Loading Facilities:
- CGC Producer Car Facts for Farmers:
- Canadian Wheat Board Producer Car Information:
- CN Rail Web site:
- CP Rail Web site:
http://www.cpr.ca – click on Customers, then Tariffs and bulletins, then Grain Tariffs database
- Elevator Agents
- Grain Dealers
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