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Cheerios shortage? Oil trains grinding grain shipments to halt

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The glut of oil train shipments from Canada is not only causing delays for Northstar and Amtrak passenger trains – it may soon have an effect on Golden Valley-based General Mills' Cheerios product, the Business Journal reports.

Citing the Wall Street Journal, the Twin Cities business publication says Canada is months behind shipments on grain, which is raising costs for General Mills and PepsiCo, which makes Quaker Oats.

According to the Canadian newspaper The Star, Saskatchewan Premier Brad Wall called the situation a "perfect storm” of record harvests, cold winter weather, shorter trains and railways' preference for shipping oil instead of heavy grain loads.

Wall warned that if there isn't an opportunity to move the crop, General Mills will run out of oats to produce Cheerios cereal in 15 to 20 days, The Star reported.

A spokesperson for General Mills, however, maintains the company has the oats it needs to operate, Minnesota Public Radio reported, although the company didn't indicate for how long.

Canadian broadcaster CBC said farmers are growing increasingly frustrated by the backlog of crops due to the surge in oil shipments and are asking transportation minister, Lisa Raitt, to intervene.

"This is a crisis situation and something has to be done. It affects not only the agriculture community but the whole economy in Western Canada," said Alberta Federation of Agriculture President Lynn Jacobsen.

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