SASKATOON (Staff) – A concrete elevator at Hodgeville, Sask., has $4 million invested in it, a capacity of 10,200 tonnes, a recently rebuilt rail line and a bleak future, according to a Saskatchewan Wheat Pool transportation specialist.
“I hope it’ll get a few more years of operation,” said Ron Weik.
He told producers at this year’s crop production show that the Hodgeville elevator is in an unfortunate position. He said that in 1988, the pool had no way of forecasting changes in grain transportation, so it built the Hodgeville terminal.
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It sits at the end of a rail line that takes an eastern loop of 260 kilometres before it reaches the CP main line only 34 kilometres to the north.
Higher freight costs
Because of this, rail charges can be $3 per tonne more than at the Morse or Swift Current elevators, Weik said. Farmers notice the difference.
Why would the pool invest in a new facility at a location that doesn’t make sense?
“That’s a good question,” Weik responded to a question from the production show crowd.
He said the elevator’s improbable isolation occurred because of rail line abandonment and a change to the freight rate dividing line.
Until this year, most grain from anywhere east of Scott, Sask., which includes Hodgeville, was exported through Thunder Bay, Ont. Hodgeville grain had a clear eastern route, joining the CP main line at Moose Jaw.
When the watershed point moved east to Sintaluta, Sask., this year and grain from the area started moving west, Hodgeville was left at the end of a 260 kilometre dead end.
Old rail line maps show an easy solution: A branch line running west from Hodgeville, connecting to the main line at Swift Current. But that line has been abandoned.
“We never would have put it there if we knew this was coming up,” Weik said. “It’s a beautiful plant: lots of capacity, fast operating.”
With nearby elevators offering better freight rates, Weik said there is little doubt grain will be flowing away from Hodgeville.
But pool elevator system operations manager Maurice Demmans said Hodgeville’s unfortunate position doesn’t make it a writeoff.
It is the largest elevator in the region and its freight cost for moving grain to Thunder Bay is only 60 cents more than along the main line, Demmans said. “It isn’t totally disadvantaged.”
Higher wheat prices make the freight rate less significant, he added.
But a large N.M. Paterson and Sons elevator is opening soon in Swift Current and Weik said if more capacity is available at locations with cheaper freight, local grain “is going to start moving away.”
