It might not always be the investment that makes every farmer’s heart beat faster, or the key decision on every farm. But admit it, grain storage is usually the first thing you notice about a farmyard.
Maybe they’re new super-sized steel bins, or lines of hopper-bottom bins, or older wooden sheds. And maybe they’re spread around with a few bins on each field, or lined up in intimidating straight lines almost like boys setting out soldiers for a game of war.
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We pay attention to grain bins, and I’ve been paying attention to grain storage strategies lately. And I’m not the only one.
My brother has put up four 23,000-bushel bins on his grain farm in west-central Saskatchewan, and on our farm, my husband and I spent most of the summer of 2008 (or at least it seemed that way) pouring cement pads for 4,000-bushel hopper-bottom bins.
Several of our neighbours have brand-new grain baggers, so the above-average 2009 yields around here have left nearby fields strewn with white plastic grain bags stretched out on the stubble (including one that’s been spraypainted with “for a good time, call Rick.”
These are three fundamentally different ways to store grain. Is someone making the wrong decision?
Mark Bratrud, who operates Bratrud Ag Advisory Services out of Weyburn, Sask., doesn’t think so. “Everybody has a different angle,” Mark says. “It depends what motivates each farmer.”
Matching storage with farm business plans
Farmers’ decisions about grain storage look inconsequential next to their investments in machinery and land. If you ask farmers about their most crucial decisions, grain storage rarely makes the list. When you ask about bins, farmers usually talk about up-front costs or resale value.
However, farmers’ grain storage choices also reflect each farm’s production plans, land base, and human resource issues.
Agricultural economist Derek Brewin at the University of Manitoba points out that farm marketing strategies are also linked to grain storage. “Farmers who store grain through the winter need to make sure their increased return covers the cost of that storage,” Brewin says. One danger, he warns, is getting complacent in their marketing strategies because they have “too much” storage.
Large scale bins
My brother, Rob Minogue, claims that his decision to buy 23,000-bushel flat-bottom bins was “just simple economics.” Per bushel, larger bins are cheaper than other options and provide permanent storage.
Rob also argues that these bins fit the times. Back in the ’60s, one of the local farmers had bins that, at the time, were jokingly called “the largest bins in the free world.” These bins held 2,500 bushels, and the owner hauled grain out of them with a truck that held 50 bushels. Since then, field sizes and equipment have grown. My brother can haul 1,600 bushels in one truckload.
Price and modern equipment aside, large scale permanent storage fits with all the elements of Rob’s operation. While he
does experiment with new crops, he’s mainly focused on growing large quantities of commercial durum and lentils.
This production plan is a perfect fit with large-scale bulk storage.
Rob’s land base also fits having storage in a fixed location. Together with our parents, he owns or has a long-term rental agreement on all of the land he farms.
Limited manpower is often a problem for Rob. Most of the time, there just aren’t extra people around to move augers from bin to bin, so the fact that we ordered these bins with built-in unloading systems with grain sweeps make a lot of sense.
Smaller scale bins
The solution that works for my brother doesn’t make sense on our farm. Larger bins are cheaper per bushel, but they don’t fit our production plan. We grow pedigreed seed and do some custom seed cleaning, so we need smaller storage units that allow us to segregate different varieties and to bin customers’ grain separately.
Like Rob, we have a stable land base, so it makes sense for us to invest in permanent storage. Putting bins on cement pads also gives us the option to sell some storage if we should one day stop growing pedigreed seed.
Because we also struggle with having enough people around to do all the work, investing in hopper bottom bins as we replace older storage makes sense for us.
Grain bags
Grain-bagging equipment can also be a sound economic choice, but the economics do need to be thought through. Large bins are cheap on a per bushel basis, but smaller hopper bins may be more likely to maintain their value and can be sold and moved. This compares with a cost of about $20,000 for a grain bagger, plus between $500 and $800 per bag when you use the equipment. You’ll also need to invest another $30,000 for equipment needed to unload the grain, but there may be opportunities to share bagging and unloading equipment with neighbours, or lease equipment as needed. Other business factors can also make this the right decision. While grain bags are best for temporary storage, since you can bag any amount, bags can accommodate any production plan.
Land base is often a key part of the decision to invest in a grain bagger. After an inheritance or a surprise buying opportunity, a farmer can wind up with a land base that’s expanded faster than planned, so it has outpaced storage.
Other farms rely on a lot of rented land and make changes in their land base from year to year. In this case, permanent storage is not the best option.
For some farmers, too, land expansion isn’t part of the long-term plan and there’s already enough storage to hold an average year’s production. In this case it doesn’t make sense to invest in permanent storage for occasional high-yield years.
Grain bags can also help ease manpower issues. During the late, rushed harvest of 2009, some farmers set up the bagging equipment in the middle of the field, and had each combine unload straight into the bag, eliminating the need for grain trucks or carts, and making the most of the short November harvest days.
Farm adviser Mark Bratrud believes all farmers are looking at the economics of storage to make the best choice for their farm. “Storage is a big investment,” Bratrud says. “You need to look at where your farm is going to be in 10 or even 20 years, and estimate what that investment is going to be worth.”
Maintaining grain quality
With any kind of business plan, grain storage has to maintain grain quality. Keeping stored grain in good condition is such a key factor that the federal government funds a Canada research chair in stored-grain ecosystems.
This chair is currently held by Dr. Digvir Jayas, vice-president of research at the University of Manitoba. According to Jayas, “By and large, Canadian farmers do an excellent job in maintaining the quality of their grains.” Our cold climate makes this relatively easy, as compared with the challenges of humid, tropical climates.
Some farmers who invest in smaller bins will argue that keeping grain more segregated spreads the risk of infestation and overheating, and limits potential losses should something go wrong in one bin. On the other hand, again, manpower can be an issue. Rob Minogue points out that “it’s easier to monitor one big bin than a whole bunch of small bins.”
Canadian farmers have long experience storing grain in steel and wooden bins. As grain-bagging technology has recently come here from Argentina and is a relatively new phenomena in the Canadian climate, Jayas has plans to research how bagging maintains quality under Canadian conditions.
The heart of a business plan
Sometimes grain storage seems like the dull afterthought of the business plan. But storage decisions really do get to the plan at the heart of every operation, and demonstrate how farmers have learned to live and breathe their long-term strategies as they do their everyday business.
As farmers must realize when they’re lining up their bins, grain storage also gives outsiders information about the farm. Last summer, I hosted a couple from downtown Toronto who had never been to a Prairie farm. They were impressed by a string of steel bins on the way to Rob’s yard. Later they “oohed” and “aahed” as they climbed the spiral staircase to the top of my brother’s giant bins to enjoy the view and take photos.
Seeing the massive investments farmers are making just to store their production puts the scope and complexity of a modern grain farm in perspective. CG
