Condo sales are as strong in the country as they are in the city.
“They’ve gone over really well,” said Rick Wilson, Saskatchewan Wheat Pool’s manager of project scheduling and communication.
“This being a bumper crop year as far as quantity goes, there’s a big demand. People are looking for alternatives for storage.”
While on-site farmer-owned storage space has been available for a long time, the recent boom in big elevator construction has made grain condos available prairie-wide.
For example, the pool’s 22 Project Horizon inland terminals will each feature condo storage, eventually bringing the total number of units at pool elevators to 4,500. By the end of 1999 the pool will have 3,700 condos.
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“I would think that there is somewhere in the neighborhood of 7,000 condo units (across the Prairies),” Wilson said.
Condo units represent space in an elevator. Grain companies sell different sizes, but generally they are available in 1,000 bushel increments.
The big benefit of condos is having grain ready for immediate sale, said Wilson.
“When the price of this or that jumps or a quota call is made, it’s just a matter of making a call,” he said.
“You don’t have to line up a trucker and be at the farm and start probing bins and everything else.”
The benefits of condo storage must be weighed against up-front costs that are higher than building on-farm storage.
While the going rate for condos is $2.50 per bushel, farmers can buy a flat bottom bin for as little as $1.25 per bu. delivered and installed, including aeration and unloading equipment, said Don Flaman, part owner of Flaman Sales Ltd., the largest seller of grain bins in Western Canada.
Hopper bins are slightly more expensive, ranging from $1.70 per bu. for an 8,000-bu. bin to $2.20 per bu. for the small 2,000-bu. models.
“We get a lot of people coming in saying they’ve looked at (condos) and it’s expensive,” said Flaman.
But farmers who buy condos don’t have to worry about the costs of drying grain, which can range from five cents a bu. for natural air drying to 40 cents a bu. for heat-based drying.
“We take the storage risks,” said Rob Davies, chief executive officer of Weyburn Inland Terminals, the first company to offer grain condos on the Prairies.
“So if it’s out of condition, then it’s our responsibility to work with it.”
Davies said condos are especially convenient for farmers moving Canadian Wheat Board grains.
“When the contract call opens, (farmers) can then deliver to the elevator, but they don’t have to start the truck in January to do it,” he said.
“They just make a phone call.”
Area farmer Greg Douglas agrees.
“You have so much grain on site that sometimes you don’t need to start an auger in the middle of winter.”
But he said a drawback of condo storage is that it locks a farmer into marketing grain through one location and one grain company.
Some companies allow farmers to request re-delivery of grain if they find a better price somewhere else, but there’s usually a handling fee.
Grain destined for a condo is graded and docked on delivery. After that, the grain company is responsible for its condition.
Some grain companies sell storage space, while others lease it to farmers. But the lease is a one-time fee paid up front.
Farmers who own condos but no longer need them can sublet or sell, but some grain companies retain the first right of refusal on sales.
Most grain can be stored in condos, except for those such as malting barley that require identity preservation. Grain companies can refuse to accept grain if moisture levels are too high or if that type of grain isn’t in demand.
