Ground Cover Issue 77 - November - December 2008
01.11.08
Silo surge as growers pursue market choice
An unprecedented surge in demand for grain silos is one of the most telling signs yet of a shift in the way growers are approaching grain marketing.
The spike in demand for on-farm storage shows more growers are setting up to supply a diversifying market, and to take advantage of market movements, such as for feed and premium grains.
Andrew Kotzur, managing director of NSW silo manufacturer Kotzur Engineering, says grower uncertainty over what will happen with the dismantling of the single desk has also added to the demand surge.
Mr Kotzur’s business has experienced a doubling in silo demand in the past year, as well as increased calls for handling equipment such as conveyers. He says orders for new silos now stretch well into 2009, with many customers being asked to wait and missing out for the coming harvest.
Ross Campbell of Nhill Silo Specialists in western Victoria has seen demand for silos grow steadily over the past eight years, but says recent demand has exceeded anything previously experienced. “We’ve tripled our orders and I’ve had to start turning customers away,” he says.
Like Mr Kotzur, he also believes growers are looking for more control over the sale and distribution of their grain, plus many are also aware that steel prices are forecast to rise.
Mr Campbell believes that a recent Victorian Government drought assistance subsidy and early season rains have also contributed. “People have been banking on a big harvest on the back of those early rains, and have planned their storage accordingly.”
As the largest of only three silo manufacturers in Western Australia, Mike Moylan of Moylan Grains Silos has also reported an extraordinary jump in demand.
“We’ve got around 600 units, ranging from 50 to 75 tonnes in production, and we could have taken more orders.”
Mr Moylan says his main constraints have been reliable labour and materials because of competition from the resources boom in WA’s north-west.
Like other manufacturers, Mr Moylan says growers need to plan silo purchases early. “We generally order our materials 12 to 18 months in advance to ensure we have the necessary materials and labour. One of the reasons we’ve had to turn people away this year is because many left it quite late to decide what they wanted to do.”
With demand for traditional steel silos exceeding supply, many growers are also reported to have turned to new grain bag technology for short-term storage.
