Guy Cadrain figures he got a bargain when he bought an elevator from
Saskatchewan Wheat Pool last year.
The grain grower won’t say what he paid for the wooden structure at
Blaine Lake, Sask., but it was less than what he would have spent for
new grain bins.
“It definitely was more economical, for sure.”
The structure, with a 144,000 bushel holding capacity, came with its
own cleaning plant, saving him the annual cost of having to pay someone
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to clean his grain.
As part of the sales agreement, Cadrain can only store grain at the
elevator. He cannot load producer cars there and he cannot use the
structure to compete against Sask Pool by buying or selling grain.
Still, he seems content with the deal, which made him one of the first
producers in Western Canada to buy one of about 200 elevators that Sask
Pool put on the market last year.
“It’s nice that the companies have made it feasible to purchase these.”
In recent years, Sask Pool and Agricore United, Western Canada’s two
largest grain handling companies, have been paring the number of wooden
elevators they own, opting instead to move more grain through their
concrete, high throughput elevators.
A year ago last spring, Sask Pool listed 180 elevators for sale, but
later increased that number to 200. The company has so far sold or has
sales pending on 122 of those structures, said Colleen Vancha, director
of investor relations and communications.
About 80 percent of those structures will be used for grain storage.
The rest were sold for commercial uses such as seed cleaning plants and
special crops processing.
Three elevators were given to groups for historical purposes, such as
museums. About 50 were demolished.
The sales program, done through ReMax realty offices in Regina and
Saskatoon, is now winding down, Vancha said, although there are still
some sales possible.
“We’re pretty pleased with it. We wanted to look for ways to work with
producers and the communities.”
Vancha did not say what the price range was for the elevators sold.
Last October, it was reported that prices until that time had been as
low as $5,000 and as high as $315,000.
Sask Pool ran other elevator sales programs in the years before the
most recent one with ReMax. When those programs are also taken into
account, the total number of elevators sold rises to 214.
Agricore United was formed last year through a merger of Agricore and
United Grain Growers. At its inaugural general meeting last November in
Saskatoon, the company said it would slash its network of country
elevators to 60 or 70 from more than 140.
Less than a year later, Agricore United has gone a long way toward
meeting that goal.
Company spokesperson Tracey Bryksa said it now has slightly more than
100 elevators, including high throughputs. Further sales and demolition
will continue over the next several years, until the target of about 70
elevators is met, she said.
The buyers include individual producers, producer groups and other
grain handling companies.
After reviewing the merger that created Agricore United last year, the
federal competition bureau required the company to reduce its
concentration of elevators in some locations on the Prairies.
In the Dauphin, Man., area, Agricore United sold one its elevators to
Parrish and Heimbecker Ltd. In Alberta’s Peace region, the company
traded an elevator at Falher and another one at Rycroft for a Louis
Dreyfus high throughput at Regina.
Last week, AU sold elevators in Bawlf, Niube and Lyalta, Alta., to
Canada Malting, a division of ConAgra.
It has also sold a couple of its elevators to producer groups. Bryksa
said there may still be a couple more elevator sales as part of the
federal requirements.
Cam Dodds, a producer at Elgin, Man., was among the producers to
benefit from the Agricore United sales program.
The elevator he bought at Elgin can hold 100,000 bu. He wouldn’t say
what price he paid, but noted that a 20,000 bu. steel bin would have
cost him more than what the elevator did.
“The costs per bushel are an awful lot cheaper than putting up on-farm
storage.”
He bought the elevator mainly for grain storage, but now he’s thinking
of adding seed cleaning.
Two months ago, Agricore United told him it had accepted the price he
offered. However, as of Sept. 30, Dodds had not received the contract
confirming the elevator was his. He said that’s probably because
Agricore United has had a lot of paperwork to keep up with as part of
its elevator sales program.
“I’ve got it full of wheat right now, so I hope it’s mine.”
