Imagine a small grain bin set on its side. Now imagine it as a rectangular box rather than cylinder. You just may be looking at the future of grain transportation and marketing.
Cargo containers are as common as fleas around the world. Today some grains find their way from port to port via containers, but containers now have the potential to revolutionize how we store grain on the farm and move it to national and international markets, according to entrepreneurs in the U.S. and Canada.
Such a project is well under way in Rochelle, IL, where the city has lured the Union Pacific railroad to build an intermodal facility, a train yard devoted to cargo containers. The city of Rochelle has its own railroad that links the Union Pacific railroad tracks with the BN-SE tracks that also go through Rochelle.
“Companies will be able to bring in finished goods by container and ship out raw products in containers through the new intermodal port,” says Lee Prunty, president of the Greater Rochelle Economic Development Board and president of Walker-Schork, International, a Case IH dealership.
A similar project is under way in Moose Jaw, Saskatchewan. There, Dory Tuvim of Marine Container Services Agri-terminals is chaperoning an effort to coordinate container companies, railroads, grain handlers and growers to bring containers deep into the Canadian countryside. The multimillion-dollar program could dramatically reduce transportation costs to Canada's western ports and, ultimately, change the way farmers handle their grain.
The new intermodal facility in Rochelle, scheduled to open this fall, has attracted enough other businesses that 1,000 acres of ground have been sold for development. Those businesses include a South Korean company that intends to lease a building and install equipment to crush and bag food-grade soybeans that will be shipped to South Korea on pallets loaded into containers.
“The company wants to crush at least eight containers worth of soybeans daily, which is about 3,000 metric tons/month,” Prunty says. “That's the equivalent of 30,000 acres of food-grade soybeans, and we're negotiating for a $0.75/bu. premium. That would mean more than a $900,000 boost to the local farm economy, just in the premiums. That doesn't count other profit opportunities involved in the logistics.”
Logistics also come into play with shipping bulk beans. “We've got lower load limits for our highways than in other countries,” Prunty says. “We could load bulk beans at the farm, but most countries want them delivered in 55,000-lb. containers. We can't do that here without special permits.”
Storage and transport
Prunty thinks farmers eventually will load their own containers at the farm level. “Even though the tools might be available, it doesn't mean farmers will be comfortable with the logistics of using them right away,” he says. “But once we get this program going and people get used to, it will definitely escalate.”
The possibilities are exciting. It's conceivable that grain carts, trucks and storage bins could all be replaced someday with the same containers that now transport goods around the world.
Grain harvested directly into leased containers could be stored in the individual units for up to five years, if the original moisture content is 12% or less. The units prevent entry by either moisture or insects, so the grain eventually leaves a container in the same condition in which it went in.
Continued growth in the identity-preserved market makes on-farm container storage and shipment more likely. “We can control the quality and know exactly what went in each bag or container,” Prunty says. “We've all heard the horror stories of what sometimes gets delivered overseas.”
Built for the farm
It wasn't a horror story but a neighbor's dilemma that got Tuvim involved with the intermodal project in Moose Jaw. It started when he retired to Alberta after 30 years of building a business that repaired, modified, stored and leased ocean-going containers.
“I'm a container man, not a farmer, but I was living in the country and one of my neighbors had a bumper crop that he didn't have enough storage for,” Tuvim says. “So I let him use some of the containers I had used to move some of my things from Montreal to my retirement home in Alberta.”
Well, one thing led to another, and the next thing Tuvim knew he was modifying containers to be more suitable for farm use. Then out of the blue, John Deere got involved and encouraged his development of containers built specifically for agriculture. It wasn't long before an ag journalist came snooping around to see what was going on, and once the word got out, Tuvim got swept up in the enthusiasm.
“I forgot my age and went back to work,” Tuvim says. “I come from the industry side where companies routinely bring a container into their factory, fill it with product and it's not touched again until it's delivered. I was questioning why farmers don't put leased containers in the field and use them for storage.
“There are all kinds of containers worldwide for different types of products,” he says. “If we can ship flour and plastic pellets in bulk, why can't we ship grain?”
Tuvim's research led him to the idea of creating a container terminal in Moose Jaw. In the process he dealt with railroads, the container industry, seed handlers and farmers.
“The railroad is the key player. I needed to negotiate a good rate to make the system feasible,” he says. “We will dispatch containers to the seed-cleaning plants in Moose Jaw and use them as portable, temporary storage while [the grain] waits for transport overseas.”
Initially crops such as lentils and chickpeas will be stored and moved in containers. Wheat isn't in the picture because government price controls reduce its value too much to be profitable using containers, according to Tuvim.
“Transporting the crops in containers will reduce handling, which reduces costs and will maintain the product in much better condition,” he says. “Shipping companies would rather receive the crop in containers than by railcar. But they have to commit their containers for a period of time when they aren't being used. They lose 10 to 15 days so they have to allocate more equipment to the system.”
Tuvim was surprised to learn that the Moose Jaw container terminal will be the first of its kind in Canada. “Once we get the bugs out we plan to use it as a model all over Canada and the United States,” he says.
“Containers allow you to break down a mass of product into small batches that can be closely monitored,” he explains. “Every container can be recorded in a computer from the day it leaves the factory right up to today. You can go straight to the source of any product and know where it was loaded, who handled it, etc. With bulk you have absolutely no control.”
Like Prunty, Tuvim envisions the day when containers will be as common as pickups on farms. “Why do farmers put up expensive storage bins that they have to pay for 12 months a year, whether they use them or not?” he asks. “With containers you can put them in the field where it's convenient rather than trucking grain from a distant farm back to your bin site. It allows you to match storage to your crop each year and requires a lot less capital.”
Both entrepreneurs realize that day is still far ahead. It will take the coordination of all the industries involved to bring costs down to a more economical level. And farmers will need to adapt a grain-handling system that challenges the way things have been done for generations.