Forty Mile Rail: Pulling in the profits
TONYA LAMBERT O
n Sept. 22, 2016, a crowd of 300 people gathered in Foremost eager to greet the arrival of the first train to the community in years. The bright blue, double-
axle JLCX 4004 locomotive brought with it not only hopper cars to fill with lentils, it also brought myriad economic benefits in the form of local jobs, lower shipping rates and higher price points for producers, and savings on infrastructure maintenance.
“As the mayor, I am very excited about the rail line,” said Ken Kuthgen, who shipped some lentils on this first haul. “It is another business in the community and it has opened up the possibility of more opportunities to come.”
The Forty Mile Rail (which is, in fact, 45 miles long) has been in development for four years. A group of area farmers started working towards getting the short line from Foremost to Stirling up and running again. Local producers wanted a more efficient way to get their secondary crops like peas, lentils and chickpeas to market. Since such commodities are purchased in lower volumes than grains such as wheat and barley, it was difficult for farmers to deal with big grain companies which dealt only in large quantities.
With the end of the Canadian Wheat Board’s monopoly in 2012, farmers’ options expanded. Paul Laqua, president and director of Forty Mile Rail, said “Things were changing about four years ago, when we could find other markets to move our products. All of a sudden, we were doing business with millers down in the United States, and we were capturing a
premium. Instead of getting paid based on a Vancouver price, we were getting paid based on an Ohio or California price which was significantly more. So, opening the short line was about economics, keeping everything in our own pockets. Instead of the line companies capturing that profit, having it go into a pool to be spread out amongst the shareholders.”
It took four years for the group to gather enough capital to get the short line back into operation.
“We have approximately 80 shareholders,” said Laqua. “Some of them are farmers and some are non-farmers and retired farmers. We’ve got some school teachers and other people from the community. Altogether, we have over 300,000 acres in the shareholder base. It’s significant.”
While raising the capital was a challenge, there were some significant factors in the group’s favour.
“This line had some steel upgraded just before it was abandoned,” said Bryne Lengyel, reeve of Forty Mile County. “And then, of course, we ended up with that large Buffalo slope elevator that was decommissioned and stayed here, too. A local producer had bought it. It was a very well-designed handling facility that was already here so that was another benefit to start with.”
Canadian Pacific Railway, which formerly owned the line, scheduled it for abandonment in 2005. The line could no longer handle the bigger cars and larger trains. Like those in many other regions of the prairie provinces, the local elevators were not able to handle
increased volumes. A 28,900-tonne Richardson Pioneer grain elevator was built at Stirling to accommodate the shifting demands, and farmers from throughout Forty Mile County had to haul their grain in trucks the 73 kilometres to Stirling or even farther to Lethbridge.
“As a farmer, it is definitely an advantage to have grain hauling out of Foremost,” says Kuthgen, who farms near Foremost with his son, brother and nephew. “It saves having to make a much longer trip to Stirling or Lethbridge.” Adds Laqua: “On a normal day, if I haul to a line company, I might get lucky hauling 5,000-6,000 bushels, whereas to Foremost, in one day, I have hauled 35,000 bushels.”
Lengyel agrees, adding, “With the new carbon tax in place and different things like that, anytime we can save fuel or wear and tear on our trucks, it just makes sense. With the carbon tax, it makes way more sense to run one engine pulling a dozen grain cars than a dozen engines pulling trucks.”
Another way that Forty Mile Rail benefits local producers is by opening new markets for their products, thereby increasing their profitability. As many as 18 grain companies will be able to access the storage facility at Foremost, which has a capacity of approximately 150,000 bushels. According to Laqua, Forty Mile Rail is currently in the process of obtaining its grain buyers’ licence, which will allow them to take on some of the risk involved.
For now, Forty Mile Rail hauls only farm products. However, the company is open to exploring other possibilities.
“We’re hoping to bring in fertilizers,” said Laqua. “We’ve also had a few guys exploring the possibility of moving oil and steel. Windmill components for the wind farms is another possibility.”
A company wanting to set up a steam train for tourists similar to the one operating on a short line near Stettler has expressed an interested in the rail line. Kuthgen also noted that some mill companies are considering milling durum wheat in Foremost.
As shipping volumes increase and the type of products shipped on the line expands, more new jobs will be created in the area.
“Indirectly, we’ve created 11 jobs in Foremost,” said Laqua. “So, that’s pretty significant. These include running the locomotive, processing products, cleaning, handling the grain, dispatching cars, connecting producers with buyers, safety and managing the rail line.”
While Forty Mile Rail has been running for less than six months, it has already made a positive economic impact in the county and has the potential to provide even more economic growth locally and throughout the southeast in the future.
“I know this rail line will have some growing pains. Everything that starts has growing pains,” said Lengyel. “I think the biggest challenge for them will be to make it economically viable so that it can support itself. It’s like anything else: it has to prove itself as it moves forward.”
“The first year is always the hardest,” says Laqua, “but I’m pretty confident that we’re going to be here for a while.”❚
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