Crop storage | Transportation hang-ups have growers looking to increase storage capacity
At least one segment of the agriculture business is benefitting from last year’s massive harvest and the bogged down rail system.
“We’re at an all-time high as far as our sales orders are concerned,” said Ryan Baldwin, vice-president of sales and marketing with Westeel, the largest supplier of grain bins in Western Canada.
The company’s order season starts before Christmas, and demand for grain bins this year was immediately stronger than anything Westeel had ever experienced.
“Early order indications from the market are close to double what they would have been a year ago,” said Baldwin.
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“Our order book right now is at an all-time high.”
There has also been a run on fertilizer bins.
“We’re booked out almost to fall on that already,” said Baldwin.
Craig Yeager, owner of Grain Bags Canada, said his business experienced the same kind of overwhelming demand for bags and baggers last fall.
“We sold probably about 40 percent more than normal, but we ran out,” he said.
“We probably could have sold 100 percent more this year than last year with the big crop.”
The company is just starting to catch up on orders for extractors to empty grain bags.
“The business is a good thing to be in right now, to be very honest with you,” said Yeager.
“On the other hand, I farm too and I’d love to see the grain gone and move on to the next crop year.”
Baldwin said growers have told him their local elevators don’t even want to talk to them for the next six months.
“This is not something that is going to go away in six months,” he said.
“There is too much carryout, and the movement continues to be too slow for them to catch up in a short period of time.”
Baldwin said Westeel is attempting to maximize its manufacturing capacity to meet the surging demand from its distributors, despite having its own rail service problems when shipping raw material to its manufacturing plants.
“We’re going to do whatever we can to get what (the distributors) need,” he said.
“Thus far I think we’ll be able to meet the demand.”
Sales of small bins suitable for short-term storage have been particularly strong. They are typically 15 to 27 feet in diameter.
However, farmers are also buying large bins in excess of 30 feet in diameter for long-term storage.
“We’re seeing a real run on everything,” said Baldwin.
Yeager said there usually is no demand for bags in the spring, but this year could be an exception because a lot of the grain sitting in bags on farmers’ fields won’t be moved this winter.
Those bags may need to be repaired or replaced, depending on the quality of the plastic. Animals can poke holes in the bags, making the grain inside susceptible to damage from spring rain.
Yeager plans to extract grain from the bags he has stored on his fields near Lake Lenore, Sask., and move it back to the main farm, where it will be re-bagged or put in empty grain bins.
He suspected other growers will be doing the same thing, which is why he has placed orders with his plastic suppliers in China and South America.
“We’ve got bags on the water right now for spring bagging,” said Yeager.
He anticipated another strong fall sales program because of forecasts that call for as much as 30 million tonnes of carryout from the 2012-13 crop.
“The big thing is, how much does a guy bring in?” he said.
“Producers are almost to the point now where they should be thinking fall just because of the logistics of getting product here.”
