CALGARY, ALBERTA, CANADA — Continued challenges across the supply chain weighed on third-quarter earnings at Canadian Pacific Railway (CP), as income in the period ended Sept. 30 fell 21% to C$472 million, equal to 71¢ per share on the common stock, from C$598 million, or 88¢ per share, in the same period a year ago.

Revenues, meanwhile, increased 4.2% to C$1.942 billion from C$1.863 billion.

Despite the overall revenue gains in the period, CP experienced challenges within its grain business, said John K. Brooks, executive vice president and chief marketing officer, during an Oct. 20 conference call with analysts.

“Grain volumes were down 27% in the quarter, while revenues were down 21%,” he said. “The challenges in the Canadian grain crop have been well documented with the crop size expected to be around 50 million tonnes, or about 40% lower than last year’s record crop. On the US side, the crop is definitely looking less challenged. Although the harvest definitely is smaller, we expect high demand, and we’re seeing high demand given the Canadian grain shortfall and a fairly robust soybean and corn export markets.

“Despite the challenging Canadian grain crop, I’m excited. We continue to build out our franchise with our customers, expanding to our 8,500-foot high-efficiency product. We have six elevator upgrades completed in Q3 alone and many more to come in Q4 and into 2022.”

Elaborating on the grain situation during the question-and-answer portion of the conference call, Brooks said CP sees a path in 2022 to positive volumes despite the grain headwinds.

“We’re still sort of educating ourselves on what this all means as much as we’re frustrated,” he said. “We’ve had a good ride in Canadian grain over the years, and it’s going to open up new markets and new opportunities for our US grain franchise. And frankly, that may provide more of an offset to some of the challenges in Canada that then we fully realize at this point.

“Beyond that, there’s been a lot of good work, not only in terms of market share gains, but just creating solutions for our customers, adding new customers that I do think it will provide us that tailwind. We’ve got inter pipeline starting up next year. We’ve got this COSCO, OOCL business (ocean freight carriers) that, frankly, is about 20%, I think, stronger volume than we anticipated — that we’ll get a full year on the Maersk transload.

“As I said, we’re already trying to figure out how we can squeeze more out of that facility, and there could be an expansion in the future.

“There’s a significant opportunity in the crush, Canadian grain crush business as more and more of those oils want to move into the renewable fuels, the Saint John, CMQ opportunity. We’ve already doubled that franchise business from when we acquired the CMQ. And there’s still a fair amount of meat on that bone.”