Last Year was very good for the grain-handling and storage equipment industries, and 2008 looks to be a continuation of it.
“There's no question that producers are looking for larger, faster grain-handling systems for their farms,” notes Greg Ver Steeg, vice president of marketing for Sudenga Industries. “A few years back, a popular size for a bucket elevator for the farm would be something with a capacity of 5,000 bu./hr. Today, it's not uncommon to see a bucket elevator that can handle 10,000 bu./hr. on a farm. Some of these new on-farm grain-handling and storage systems rival local cooperatives.”
It's a simple matter of numbers: More corn acres mean more grain to move and store. And bottlenecks can be created on the farm with smaller-capacity equipment trying to handle the influx of grain.
“Demand for grain-handling and storage equipment remains extremely high,” says Randy Coffee, director of marketing for Sukup Manufacturing Company. “And with commodity prices high, we expect demand for our products to remain strong through the year.”
Coffee says huge on-farm storage systems are not an uncommon sight today in the countryside. “It's not unusual to see 100,000-bu. bins of 60-ft. diameter and larger on the farm,” he says. That's something that wasn't common a decade ago.
Doug Niemeyer, vice president and general manager of Brock Grain Systems Division, CTB, agrees that producers are increasing their grain-handling capacity. “Some producers are installing bucket elevators, legs and drag conveyors,” he says. “Unloading 2,000 to 5,000 bu./hr. isn't fast enough to unload these giant wagons. Producers want capacity in the 10,000 bu./hr. range on the farm. That's rivaling a commercial operation in some cases.”
Burl Shuler, vice president of sales and administration for GSI, says that grain-handling systems are not only becoming larger, but they are also becoming more sophisticated. “Augers are being replaced with elevator legs and conveyors for more efficient, gentle grain handling,” he says. “Producers are putting large portable dryers or large tower dryers on the farm.”
Filling the need
Finding equipment is one thing. Finding a crew to assemble equipment can be an entirely different challenge. Although companies have added crews and expanded manufacturing space, supply will remain tight into 2008.
“All through 2007, in the end we were limited by what we could get into place by build capacity,” Shuler says. “Suppliers rose to the occasion, adding people and equipment.”
Companies are optimistic that equipment demand will remain strong over the next several years. “With the projected cost of corn over $5/bu., that can mean a quick payback on these structures,” Coffee says. “And with the ethanol market absorbing so much corn, and producers looking to get this grain under cover, we don't see that market going away anytime soon.”
If you plan on adding to your current setup, or want to build that new grain bin, don't wait or you might be left in the cold. “If a producer is interested in getting new equipment, it's better to lock in that purchase as soon as possible,” says Eric Johnson, purchasing manager for GrainWay.
“For our company, and the grain-handling industry, this is some of the best demand we've seen in some time,” Coffee says. “And it may be some of the best we will ever see.”