CALGARY – Three grain companies in Alberta have swapped elevators in efforts to streamline operations.
Effective May 5, Alberta Wheat Pool’s facilities at Bentley, Drum-heller and Killam were transferred to United Grain Growers in exchange for UGG elevators at Mundare, Delia and Etzikom. Pioneer Grain took over pool elevators at Torrington and Nanton. The pool got Pioneer’s elevators at Carbon and Ponoka.
In most cases the companies already had a facility in the town. By trading, each is able to double its capacity and get more rail car spots to take advantage of incentives offered to larger rail loading sites, said pool spokesperson Trish Jordan.
Read Also
Feeder market adds New World screwworm risk premium
Feedlots contemplate the probability of Canadian border closing to U.S. feeder cattle if parasite found in United States
For the pool, leaving some communities is the right decision for the short term as it prepares for further consolidation of country points and branch line abandonment, she said.
In other cases the company chose to leave a region where business was already weak.
By consolidating facilities in a community where business is strong, the company will have a more viable operation, said Tom Mackie of UGG.
Mackie said some points were too close together resulting in the company competing for business with itself.
“This system evolved when the horse and wagon were delivering grain and now farmers search out markets 30, 40 or 50 miles from their farm,” said Mackie.
Consolidating country points is part of an overall plan most western grain companies embarked on several years ago. It involves closing facilities in smaller centres in favor of fewer, but newer and larger facilities in strategic central locations.
UGG plans to reduce its elevators by about five percent a year until it has about 125 points remaining compared to about 220 now.
Alberta Pool’s country plan, written in 1992, calls for an overall reduction from 250 to 100 facilities.
As of Aug. 1, 1994 Pioneer Grain had 175 facilities prairie-wide compared to five years ago when it ran 205 points.
