Grain Connect and Paterson Grain

[wmoebis]

Am I reading the news right that thee is 2 new grain terminals gong in at Bowden AB?

Grain Connect announced one last week and Paterson yesterday. Or is the same one?

[TOM4CWB]

http://www.mountainviewgazette.ca/article/Massive-grain-terminal-coming-to-Niobe-20160223

The two small wooden grain elevators at Niobe in Red Deer County will soon have gigantic company.

A huge high throughput grain terminal operation along Highway 2A, two kilometres north of Innisfail, was approved by the county last week (Feb. 16) through a development permit application by GrainsConnect Canada Operations Inc.

The facility is the first-ever high throughput grain terminal operation in Red Deer County. It is expected to cost between $30 and $40 million to construct, and will spread over more than 207 acres and process up to 35,000 metric tonnes of grain in 10 hours from 10 massive concrete towers.

More importantly, the project, expected to open for business in time for the harvest of 2017, will have an enormous immediate positive economic impact for the county and its farming community.

“This is a real milestone, a real game changer for the farming community for sure. This is going to be one of the largest facilities that I am aware of,” said county mayor Jim Wood, a farmer himself.

“It is not only going to bring in tax revenue to Red Deer County, but it is also going to help farmers in the county and around to market their grain,” he added. “It is definitely going to create employment, definitely in a time during a downturn in the economy. We are definitely going to see some jobs created right now.”

GrainsConnect, a joint venture between the Australian-based GrainCorp Limited and Japanese-based Zen-Noh Grain Corporation, announced last December that it was creating a new fully integrated supply chain for Canadian farmers, an investment that would include construction of several new elevator operations in Alberta and Saskatchewan. The Western Canadian Wheat Growers Association said GrainsConnect’s initiative would allow farmers to move more grain off the farm at harvest time, strengthen grain bids, and improve export capacity.

In addition to the new site at Niobe, Warren Stow, president of GrainsConnect Canada, said the company hopes to announce the location of a second new Alberta grain terminal facility, along with two in Saskatchewan, within the next 60 days.

For farmers in the Red Deer County region, it will mean they will no longer have to haul their grain to the current closest terminals in Olds, Lacombe, Joffre, or farther east at Equity and Trochu.

“Obviously we think having another option for local growers is a positive thing; proximity is obviously one benefit. Just having another option other than the incumbents that have been in the industry for a number of years we feel brings a value,” said Stow, whose company owns the two wooden grain elevators at Niobe that have operated for several years under the Canada Malting Co. banner.

“We feel we already have a good presence with the local community, and the growers in that community. There is a strong production base. We felt it was a strong location for us.”

He said the two wooden elevators, which employ a total of six workers to store barley for shipments to Calgary, will remain at the site.

“They are for purpose for our malting business and we see those operating as we do today. There will be no change,” he said, noting the new facility, designed to handle wheat, barley, canola and peas, will be built across the rail track to the west of the existing north elevator.

GrainsConnect’s application to the county’s Municipal Planning Commission noted the facility, which will be accessed off Highway 2A from Twp. Rd. 360, will also include support buildings, a weigh scale, seed cleaning units, parking stalls, and a 2,652-metre loop rail track from the existing CP rail line.

Stow said he hopes construction of the facility can begin in April but noted there are still additional regulatory approvals that need to be finalized.

“We do have some hoops to jump through. Obviously the development permit is one of them that we cleared this morning (Feb. 16), but we do have provincial (approval) because we are a foreign entity, and we do need to seek foreign investment approval from the provincial government,” he said, adding there are other foreign approvals that have to be made.

However, when construction does start it promises to give an immediate boost for the struggling local economy, as the 18-month build period will give steady employment to 40 to 50 construction workers, and up to a maximum of 200 when the concrete slip is being poured continuously, 24 hours a day, over a period of up to six weeks.

Stow said when the facility is open for business in time for the harvest of 2017, 10 to 12 full-time people will be permanently on site to operate the facility.

[farmaholic]

Interesting factoid from the report on Canada Transportation Act review(transporting grain portion):

Commercial Grain Storage Capacity
(Inland and Port combined)of Canada, US and Australia...

Canada: Can store no more than 20% of our average annual production.

US: 50% capacity

Australia: 175% of average annual production.


Maybe these Canadian facilities could consider expanding their capacities. Then maybe contracted grain could be accepted by them in a timely manner that meets the Producer's efforts to manage cashflow and delivery outside of inclement weather and road-ban season... Then they have contracts that extend the delivery periods that don't properly compensate for the inconvenience and financial hardships experienced by Producers from untimely delivery...

[ColevilleH2S]

20% Really? That seems high to me. If the elevators only turned 5X a year they'd be screaming poverty.

[Hopalong]

Often wondered past few years why graincos were not more eager to build storage.
Maybe it was memory of wheat board and government regulated shipping. Car supply based on last year's handle an example.
Glad to see Bunge putting money into facilities, not so sure about government owned like Saudi or Chinese, but once they are built should be an asset to our growers.
There were times when cost of carry in futures contracts should have been strong incentive to graincos to store grain.

[farmaholic]

Hoppy, they got paid storage on CWB grains.

Agreed on playing the spread or even speculating, they see what's coming before the people they buy the grain from, advantageous position.

I have peas I contracted to deliver between Dec and end of Feb, so I wouldn't have to contend with a soft yard and road-bans and cash flow. Guess what, they are still here. The contract gives them the right to extend delivery 30 days or offer an alternative delivery point. Storage payments of a whopping ten cents/tonne/day...only begins after 30 days. With grain in the bin maybe the storage should start the day the contract was signed. Or with a production contract or simple grain contract priced before harvest, the day the grain is put in the bin maybe storage should start that day. That might give incentive to take delivery and not use us as their storage facility and jump to deliver when they snap their fingers.

DON'T GET ME STARTED ON THE MALT BARLEY ISSUES THAT GET "PLAYED" OUT!!!
There is something deathly wrong with the system. KEEP HALF THE UNLOAD SAMPLES AT UNLOAD AT THE TERMINALS!!!