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you have to have a place for farmers to
deliver it.”
It is a challenge that the CWB has had
to face as it transitions to privatization.
The announcement of three new high-
throughput elevators in Bloom, MB,
Pasqua, SK and Colonsay, SK, added
an entirely new dimension to the CWB’s
business. Both facilities are scheduled for
completion in time for the 2015 harvest.
“We have lots of experience on
the marketing side and working with
partners, but ownership is new to us,”
said Gord Flaten, vice-president of grain
procurement for the CWB. “We knew
from the start that the path to a viable
grain company is to have a network of
assets. We plan to keep buying grain
in the way we are doing it currently, but
the addition of our own assets will be
important, as well.”
Once the privatization of the CWB is
complete, the farmers who deliver to its
facilities will have a unique opportunity
to earn equity in the company. The
transition has been underway since they
began distributing entitlement to equity
through the farmer ownership program
in 2013. Through the multi-year program,
producers who deliver to the CWB
will be credited with $5 per tonne in
ownership in the privatized company.
“There is no other opportunity for
farmers to own equity in a significant-
sized grain-handling company in Western
Canada,” said Flaten. “We intend to have
a full network across the Prairies, but we
are not announcing the numbers and
locations before they are ready.”
While the major grain companies are
investing in their own infrastructure,
Manitoba-based FarmLink Marketing
Solutions is leveraging the rapid growth
in on-farm storage by marketing grain
straight from farmers’ bins. What started
as a consulting business to help growers
maximize profits is becoming a virtual
grain company, managing the sale and
delivery of three to four million acres of
crops annually.
“Farmers’ storage is not just a place
to park grain until it’s ready to sell; it’s
an income asset of its own, but hasn’t
been treated that way,” said Brenda
Tjaden Lepp, co-owner and chief analyst
for FarmLink. “Big elevators on rail lines
are not our business. We are using
technology and advanced management
practices of our clients and staff to find a
new and better way to connect end-use
customers with growers.”
According to Hemmes, the abundance
of on-farm grain storage in Western
Canada has a significant impact on the
way grain is marketed.
“Producers are buying incredible
amounts of on-farm storage, so anybody
building additional storage capacity has
to contend with that,” he said.
“Buildingmore capacity is in some
ways necessary because railways are
not efficient,” he added. “Companies
compensate by increasing storage and get
moremarket share. It’s smart business.”
Fall
2014
grainswest.com
33
1993
2003
2013
13,090,600
Capacity (mt)
10,999,220
Capacity (mt)
11,613,640
Capacity (mt)
1,524
Elevators
441
Elevators
415
Elevators
Innovations in efficiency
As old facilities are being upgraded and
new facilities are being built, companies are
banking on increased efficiencies at all points
of the system to keep the grain moving.
Grain marketers are often deliberately vague
about the details to protect their competitive
advantage, but a few innovations stand out.
Loop tracks
The most visible feature of CWB’s new high-
throughput elevators will be loop tracks—
large, circular tracks that will enable an entire
unit of cars to be pulled off the rail mainline
and kept together during loading. The
facilities themselves will be capable of loading
at a rate of 60,000 bushels per hour, or up to
134 cars in 12 hours.
Flat storage
Parrish and Heimbecker is finding efficiencies
using flat storage units instead of vertical
grain elevators. According to vice-president
John Heimbecker, flat storage provides more
storage capacity at lower construction costs.
Health and safety improvements
Upgrades and new construction provide an
opportunity to improve health and safety
issues in facilities.
“Any facility we upgrade, expand or build,
we are putting these things at the forefront
to ensure that people are operating in safe,
healthy work environments,” said James
Mobray of Cargill AgHorizons Canada.