Canada farmers in 'near-record' silo building wave

Canada's farmers, as well as grain giants such as Cargill, are investing in storage capacity to help ensure that this year's crops including an expected strong canola crop are not put at risk from rail delays, as the 2013 harvest was.

Grain handlers have announced a series of expansions to their capacity in Canada, where a rail system snarled up by cold weather has proven inadequate to transport crop volumes swollen by record canola and wheat harvests last year.

Cargill, it to expand an elevator in Morris, Manitoba, while CWB, the former export monopoly for the Prairies, is building storage facilities in Manitoba and Saskatchewan.

Vittera, owned by GlencoreXstrata, is to expand a Saskatchewan elevator and modernise its grains terminal at Port Metro Vancouver, where rival Richardson is also to develop its port facilities.

'Near-record numbers'

However, growers too are rushing to build on-farm silos in response to the rail hold-ups - which have left them without a ready market for last year's strong crops, leaving them a storage headache.

"There has been a significant increase in the use of ground silo bags, converted machine and implement buildings, and open air piles of oilseeds and grain stores,"  the US Department of Agriculture bureau in Ottawa said.

"These stocks of oilseeds and grains more prone to compromised quality.

"To address some of these challenges, post has heard reports of near-record numbers of grain bins contracted to be built this summer on farms across the Prairies."

Data ahead

The comments, good news for silo-makers such as Ag Growth International, came as the bureau forecast another strong Canadian canola crop this year, of 16.2m tonnes.

While below last year's record 18.0m-tonne crop, this would be 12% above the five-year average harvest, said the bureau, and is 200,000 tonnes above the estimate from Canada's AAFC farm office.

Both the bureau and the AAFC factored in a sharp rise in plantings, thanks to relatively high prices compared with grains, but a return to average yields.

They also forecast a rise in exports in 2014-15 despite the weaker harvest, to 8.5m tonnes, noting the boost to supplies from stocks left over from last year's crop.

Statistics Canada will on Thursday unveil a much-anticipated sowings report based on a farmer survey, and expected to show canola sowings at 21.1m acres, up some 1.2m acres year on year.

Wheat seedings are forecast at 24.4m acres, down nearly 1.9m acres year on year.

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