By Geoff Geddes
When it comes to walking the talk, Wade and Scott McAllister have taken the changing face of farming in stride and made the most of it. On their 4,000-acre, fifth-generation farm, the brothers have a wide range of bins including six with 21,000-bushel capacity, six that hold 12,000 bushels and 10 6,000-bushel bins. They also have seven 4,000-bushel hoppers that store seeds and fertilizer in the spring and canola during harvest.
Their total storage adds up to about 320,000 bushels of capacity. That’s a lot of space, but they use it all and, to date, have never had anything left in the bins by next year’s harvest.
“We have a three-year contract with Rahr Malting and New Belgium Brewery out of Colorado for 1,000 tonnes of malting barley per year. Last year, we did something cool with Tool Shed Brewing Company where we sold them 10 tonnes of malt barley – malted for us by Red Shed Malting – to make Prairie Pride, a 100-per cent barley beer. Prairie Pride sold out quickly and we’re hoping to produce it again this year.”
Their wheat goes mostly to the feed market. With canola, they market 20 to 30 per cent before planting and store the rest until after combining.
Though the storage for all that grain isn’t cheap, Wade says it’s worth every penny.
“Having good-quality storage means we don’t have to make impulse decisions on marketing; for example, we can store canola and keep it safe and dry while we wait to capture the best price. Also, all of our storage is in our main yard, so we can constantly monitor it without having to drive all over to check our bins,” says Wade.
Their setup means they can have 80 per cent of their bins on air which is good for conditioning as well as the bottom line.
“Last year, the crop came off hot and dry and guys were putting it in bins thinking it was OK because it was dry. But the heat would have caused bug problems if we didn’t get the crop cooled right away. We needed to get it from 35 C to 15 C as fast as possible before our canola went from $11/bushel to $7/bushel, and storage allowed us to do that, so it’s huge for us.”
That temperature control is a big part of the storage appeal for the brothers. All the bins have temperature gauges showing them what the grain is doing, and that’s especially helpful with their malting barley.
“Some of our malt doesn’t get moved until the following July or August, which means we have to store it for 10 or 11 months. To ensure it doesn’t drop from malt to feed during that time, we freeze it and set the bins at -10 C, keeping them germ safe until we deliver it.”
Safe and Sound
Since it’s not payday until they get that cheque from the end user, Wade likens the bins to vaults protecting their precious belongings. In part, that explains their decision to erect large corrugated bins instead of hoppers.
“The bins mean a bit more work at harvest as our trucks must travel farther to get to them, but we’re young and plan to farm for 30 more years, and the bins will easily last that long. We see it as short-term pain for long-term gain.”
Depending on size, their initial cost for the bins starts at $2.50/bushel for the large, flat-bottom bins and about $4/bushel for the steel hoppers. Maintaining their storage involves little outlay except for power costs to run the fans.
The brothers also favour bins over bagging since they’ve “seen way more bad-bagging pictures on social media than good ones.” If you do use bags, Wade advises limiting them to short-term situations, as leaving them in the field all winter will lead to animal attacks and a lot of spoiled grain.
Part of large-scale storage is large-scale drying. Wade and Scott run an average of 50,000 bushels through their dryer each year, most of it malting barley as it’s the crop most sensitive to weather. By drying it properly, they get a jump-start on their harvest and are able to take the barley crop off at the perfect specifications. And as one of the only farms in the area that owns a dryer, they do a lot of custom drying for neighbours at a lower rate than the elevators charge.
If it all sounds like a well-oiled machine, it is. At the same time, they know that even the best system needs supervision.
Who’s Minding the Storage?
“It’s critical to really monitor your bins as you have lots of money sitting in them; that could amount to $300,000 for one bin of canola. Things can go wrong in a hurry, and you must be vigilant in using air to cool things down or ensuring you don’t mix different quality grains in one bin.”
To avoid the mixing hazard, they use 20,000-bushel bins rather than 40,000 so they can fill the bin quickly enough to ensure the specifications don’t change midstream and have them dumping bad grain on good.
Of course, what would an upside be without downside? In farming, it’s unheard of, and massive on-farm storage is no exception. Spoilage in a 20,000-bushel bin can be far more devastating than in a bin one-fifth that size.
In other words, bigger bins can mean bigger losses; fortunately, that’s a rare occurrence these days.
“The way modern bins are designed with cables and air and all the latest technology, you’ll never have a problem if you treat your grain properly. There are systems now where when the grain reaches a certain temperature, the fans turn on automatically. If you have bins spread out over a large area, you can even monitor them from two provinces away on a computer screen or have someone else monitor them for you if you can afford that.”
In their case, the McAllisters keep most of their bins in one area, thereby maximizing one of the main benefits of high-volume, on-farm storage: efficiency.
“This setup means we’re not dragging the auger all over the countryside every day and a half filling multiple bins and wasting precious time.”
As good as the system is, the brothers are always looking to improve it. Their next step will be adding bigger bins and upgrading their dryer to better manage the volume at harvest.
Success is in the Wind
Sharing that love of continuous improvement is Windy Poplars, a group of four family farms started by John and Linda Burns in 1975 near Wynyard, Sask. Its origins, though unconventional, may help explain its decision to “go big” with on-farm storage.
“I’m a chemist who also has a passion for farming,” says John. “When the land became available at the right price, we jumped at it.”
Some of those chemist qualities, like an analytical mind and a knack for problem solving, led John to take the plunge from a storage perspective.
“We looked at who our customers were and what needs they had, identifying gaps where we could have unique leverage. We knew that to succeed we had to manage our time, minimize our risk and maximize the opportunities, and doing our own storage was a big part of that.”
A Controlling Interest
Knowing that the worst time to market your crop is at harvest when everyone else is heading for the elevator, John wanted the control and risk-management options that storage afforded him. He also likes the fact that marketing 500 or 1,000 tonnes takes no more time but becomes more efficient as you deal with higher volumes. At Windy Poplars, that volume amounts to 750,000 bushels of storage capacity, including storage units ranging from 2,300-73,000 bushels, as well as hoppers with capacities from 5,000 bushels up to 16,000.
“We’ll be adding four more 73,000-bushel bins to bring our total capacity to one million bushels. In reality, though, we’ll be able to store about 800,000 bushels as you need to leave room at the top of each bin for air circulation.”
One attraction of the larger bins is the lower cost per bushel of capacity. John estimates his “all-in” cost – including augers, probes and fans – at $1.75/bushel for the 73,000-bushel bins.
They put that capacity to good use, annually harvesting about one million bushels of grain. Given those numbers, even if he wasn’t a risk taker by nature, he’d have to become one out of necessity.
“Storage capacity is related to how much risk you’re willing to take on at harvest time. We’re not prepared to wait for grain to dry or cool off enough to be storable, because if your crop is coming off at 30-40 C, it’s unlikely to last the weekend no matter how dry it is. Cooling it below 20 C gives you 10 times the storage window and reduces your risk, even if you have high moisture.”
Turning up the Volumes
Storing such high volumes successfully in a situation where annual harvest numbers exceed storage capacity requires some of the same qualities that made John a successful chemist, such as organization and attention to detail.
“You’re always looking at where to put your product and managing risk factors, as failing to harvest and letting combines sit are simply not options. The grain has to go somewhere, and just because you have one million bushels of storage doesn’t mean you can put one million bushels of product in there. It’s a dynamic situation with grain coming in and out and you never know exactly how much you will take off the field.”
The ideal in John’s experience is to have 20 per cent more storage than the product you are handling. In addition to leaving room for error, this approach gives you the option to fill some tanks at less than capacity if moisture levels dictate that.
The Master of Marketing
Another key to successful storage is effective marketing. While you might not expect that from a chemist, you’d be sadly mistaken.
“Our intent each year is to have one-third of the crop sold before we put it in the ground, one-third sold as we’re seeding and the final one-third spoken for after the fact. In that way, we can make the best use of our bins and augment them with hoppers and grain bags as the need arises.”
Success in marketing hinges on quality control, which John identifies as the biggest challenge in large-scale storage.
“Your end market wants a certain product with certain specifications, so we have to know those specs at all times. That’s not easy with a 30,000-bushel bin when you’re wondering what’s happening at the centre of it, but it’s vital to use probes or pull a load out and assess it.”
Once you know what you’re dealing with, you can then use aeration, temperature changes or cleaning to achieve the quality you seek.
“Grain must be managed so the end-use customer is not just happy but ecstatic. That builds credibility and either brings you a premium price or builds trust that leads to more marketing opportunities down the road. Farming is largely about using risk-management tools, and the proper storage is a key piece in your toolbox.”
Farming is also about productivity, something that benefits greatly from smart storage.
“This business is very capital intensive regarding equipment and land. It’s tough paying half a million dollars for a machine that may only be used six weeks a year. The greater your volume, the more that machine gets used over a long period of time and thus, the lower your cost per use.”
As far as land is concerned, John focuses not on how many acres he manages but how much product he’s pulling off and the storage he needs per acre. He finds that if he spreads out his harvest time and makes the best use of equipment, manpower and storage, he boosts both efficiency and his chances of success.
In the current farming environment, that success is no small feat.
“The situation in farming today is the most challenging I’ve ever seen for the single-operator farm. There’s a reason that the Hutterites are thriving and we should learn from their success rather than fear it. You just can’t go it alone anymore; that’s why we should always be looking for the win-win situations, whether with a neighbour, a partner or a customer. We must make the most of opportunities, and maximizing our storage can help us do that.”