WINNIPEG — Prairie farmers show no signs of backing away from Canada’s heavy reliance on on-farm grain storage, says a marketing executive with Farm Credit Canada.
More on-farm storage for fertilizer and fuel is also likely in the future, Lyndon Carlson told the Keystone Agricultural Producers annual convention.
“We’re seeing at Farm Credit and around the country … more and more people … starting to plan for more on-farm capacity,” said Carlson Jan. 28.
“It’s probably going to be an important part of the strategy because sometimes it’s going to mean more flexibility as to when you move product and how you take advantage of upswings in commodity prices.”
If farmers are planning to build more on-farm storage, as FCC believes, it helps confirm the maintenance of Canada’s unique grain industry structure.
Many analysts and industry players noted the difference between Canada’s system and those of export competitors during the process of removing the CWB monopoly.
Other countries tend to have massive storage capacity at elevator points and at port, but Canada has little. Instead, Canadian farmers keep most of their crops on the farm and move them in the months after harvest rather than immediately dumping them into the grain-handling system.
Some have speculated that the Canadian system would shift more to the Australian or U.S. style, but that has not seemed to occur.
Cargill Canada vice-president John Buboltz recently said his company is focusing first on boosting its loading capabilities at elevators before increasing storage.
Others have said the western Canadian system has inherent advantages that should be retained. They argue that on-farm storage allows the prairie grain industry to handle far more gradations of crops and crop qualities, rather than the bulk aggregations typical in systems where grain floods into the system at harvest.
Carlson said larger crops and competition for rail service create the pressure for on-farm storage. He urged farmers to support the building of oil pipelines to take pressure off the rail system.
Carlson said farmers are also showing interest in building storage for fertilizer, which often makes sense for both price and availability.
“Logistically speaking, the fertilizer companies want you to take delivery in the fall if you’re going to buy it in the fall,” he said.
Fall pricing generally allows farmers to buy cheaper fertilizer than waiting for spring.