Finding the ‘Big V’ in grain storage

When it comes to storing grain after harvest, some farmers find greater value in on-farm storage as opposed to trucking to a local elevator.

Chad Hachborn operates a commercial elevator system on his family’s farm near New Hamburg. He and his wife, Tracy, crop roughly 350 acres and run Stoneybrook Elevators, which handles about 1.5 million bushels of corn, wheat and soybeans annually. They also have 1,000 finishing hogs and a small cow-calf operation.

Why it matters: The decision to store grain on-farm, build an elevator or ship to an elevator depends on geography, cost and perceived value.

His father-in-law built the first elevator in 1996 based on a combination of local demand and not wanting to wait in line at harvest. Then neighbours started coming to him and it took off from there.

In 2004, the family decided to expand the storage operation and every couple of years after that, they added another bin or silo. There are also two tower dryers and a smaller unit that Hachborn uses for custom drying.

“We just kept growing with our customers,” he says, noting a reputation for fairness has helped attract and maintain the customer base.

“We weren’t looking for work. It just kept coming and we kept building.”

They now handle 20,000 tonnes of corn every year and although it’s a challenge to segregate by quality, Hachborn says they do their best with different bushel weights and vomitoxin levels.

“Some of our customers just don’t want the headaches,” adds Hachborn. “They’re less likely to build their own storage, but there are other producers who are looking to save money or want to be independent. As a commercial elevator, we try to not make people feel as though they should build their own. We’re here to serve them.”

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As a grower, Hachborn isn’t looking to expand his acreage, which is why he share-crops instead of renting. In 2018, he had to dock growers for high vomitoxin levels in their corn but kept those amounts to a minimum.

“When I get a complaint or concern, most of the time I’ll tell the producer that I know where they’re at because I farm, too,” says Hachborn. “Sometimes we have to discount but if we can help out by not taking as much, that’s what we do.”

Current storage landscape

Shipping commodities in Eastern Canada is strengthened by proximity to local elevators. Most growers are an hour’s drive or less from an elevator and there are relatively short distances from farms or elevators to end-use customers.

According to Don Kabbes of Great Lakes Grain, those are huge advantages for growers and the commodities they produce, whether they have on-farm storage or truck their harvest to an elevator.

“They have greater flexibility when it comes to their own-farm storage,” says Kabbes, who’s been with Great Lakes Grain since 2009 and general manager since 2016. “Growers can harvest, market and ship on their own terms. Our market in Ontario is very close to the farmer and they can be quite flexible in merchandising their own grain.”

That can help in areas of large corn production. Growers may be willing to own and operate an elevator but where a larger percentage of land is rented or corn isn’t the dominant crop, storage hasn’t been as active.

That’s why Kabbes maintains there’s an advantage to marketing grain through a local elevator company.

If a farmer chooses a specific destination for their grain and has issues handling it, a grain company can be more flexible and move it easily somewhere else.

Grain companies can be as competitive as the end user and may have larger positions to enhance the offer to the grower.

Kabbes knows there are growers with experience in managing on-farm grain but some don’t consider shrink, repairs and maintenance, interest, cost of carry and labour in the overall picture of running a grain elevator. Marketing can also out-perform on-farm storage.

Simple is best

For Tom Harris, on-farm storage was a process he started in 1978 and enhanced in 2020. He’s kept things fairly small, working with his son, Ryan, and farming 1,000 acres northeast of London. Harris says he has always had on-farm storage but if Ryan wasn’t willing to farm after him, he wouldn’t have added to the system in 2020.

“It’s just the convenience. We’re not lined up at the elevator,” says Harris. “Sometimes the weather goes against you or there’ll be a little frost at night so we can work from 5 p.m. to midnight, filling things up.

Not always, but sometimes that convenience is nice.”

The difference between the Harris and Hachborn operations is that Harris doesn’t offer storage and drying services to his neighbours.

“We know what we’re bringing in, and corn and wheat are the biggest crops,” says Harris, adding their IP soybeans are shipped, not stored.

“We have loads coming in and the newer technology, with the dryer, Ryan can monitor that from his phone and make small changes.”

Harris maintains that monitoring and quality control begin at the combine, not at the storage bin or elevator. It must be properly tuned to eliminate or reduce fines, which he says can be the biggest problem with dockage.

Drying costs may be a concern, but everyone is in the same boat, whether storing or trucking to the elevator. Harris uses propane for drying because he has no access to natural gas. To power the elevator and the dryer, he and Ryan use a diesel-powered generator to avoid peak-time pricing on electricity. That subjects them to the carbon tax, but again, everyone is in the same boat.

“Talk can focus on ‘competition’ with world prices but the carbon tax is a challenge,” says Harris. “Unfortunately, we can’t store wet grain. It has to be dried and there’s no alternative.”

By the numbers

In 2014, Statistics Canada reported total storage capacity for Ontario at 374 million bushels (10.2 million tonnes). By 2020, capacity was 463 million bushels, or 12.6 million tonnes, up nearly 50 million tonnes every three years. The increase is due to the higher crop prices of the last few years and strong yields.

But growers should know what on-farm storage entails – the monitoring and actions required to reduce quality losses. There are resources available through the Ontario Ministry of Agriculture, Food and Rural Affairs, including an aeration factsheet and a new greenhouse gas emissions calculator that’s part of the AgriSuite toolset. There’s also the BinCast resource, which requires an account/login.

Those who consider establishing a commercial elevator must be licensed through Agricorp or through the federal government for terminal (exporting) elevators.