About half of the 180 grain elevators put on the market by Saskatchewan Wheat Pool this spring will be sold by the time the program winds down next month.
Considering the state of the farm economy and the drought, and considering that only about three-quarters of the elevators were seen as salable in the first place, that’s not bad, says the pool’s real estate agent.
“We’ve had possibly the worst year we could have had to do this,” said Greg Kvisle of Re/Max Crown Real Estate Ltd. in Regina.
Read Also
Going beyond “Resistant” on crop seed labels
Variety resistance is getting more specific on crop disease pathogens, but that information must be conveyed in a way that actually helps producers make rotation decisions.
The drought left potential buyers short of money and in some cases rethinking the need to buy extra storage, he said, while uncertainty over rail shipping rules through the spring and summer created more uncertainty.
“Everything has been against us from the start, so we’re actually amazed we’re doing as well as we’re doing,” he said.
As of mid-December, the pool had reached agreements to sell about 80 facilities. Kvisle said he expected about 12 more to sell by the Nov. 15 deadline, bringing the total to around 90.
“With harvest winding down, we expect to start getting more offers again now.”
He said the company’s goal was to sell 60 percent of the 135 or 140 it felt were salable, “so based on that we’ll have reached our goal.”
Anything not sold by Nov. 15 will be demolished.
Kvisle said there wouldn’t be much point in extending the deadline.
“These have been on the market for four months,” he said. “If you haven’t started looking by now, you’re probably not interested.”
The pool announced in April that it was getting rid of 180 elevators that no longer fit into its corporate plans.
Given the large number of facilities being put on the block, along with the often complex nature of the deals, the pool decided to turn the task over to real estate professionals.
“We tried to make the buyers as aware as we could, but it does get complicated, there’s no doubt about that,” said Kvisle.
“There are a lot of issues on some of these that are barriers to some people.”
Those include such things as financing, land titles, rail access and municipal taxes. About five conditional deals fell through because of difficulties in resolving some of those issues.
Sask Pool chief executive officer Mayo Schmidt said recently the sales program is expected to earn the pool close to $5 million in revenue. Based on 90 elevators, that works out to an average of a little more than $50,000 per elevator.
Kvisle said selling prices have been as low as $5,000 and as high as $315,000.
The vast majority have been sold to individual farmers for use as grain storage facilities, with about 10 being bought for commercial operations such as seed cleaning. In some areas there was stiff competition among buyers, while in other areas there was no action at all.
Sales were stronger in regions where there was a good crop, and also in areas where pool elevators have previously been sold to local buyers.
