Fall is a great time of year. The turning of the leaves, harvesting of crops and crispness in the air all contribute to a certain feeling. Some might call it a yearning to get outside and enjoy it while you can. If you are of a certain age and live or lived near a small town with a grain elevator, this is also the time of year you were used to seeing a procession of tractors and wagons crawling towards it.
They used to be tiny wagons pulled by open air tractors. Neighbors would talk in line while waiting to get unloaded. More often than not today it’s a semi or a monster wagon pulled by cabbed tractor with central air. Most are busy yacking on their cell phones instead of getting out of their controlled comfort to chat.
If you have small children or grandchildren and are lucky enough to be near an elevator where people still bring in wagons and get out to chat with the neighbors in line, take them out to see it this fall. They won’t understand why now, but when they are older they will thank you for it. You see, we didn’t know it when I was young, but mine was the last generation to shell corn. Yes, shelling corn was hot and dirty work, but it was also a social event participated in by neighbors, kids you knew, and occasionally some cousins from “the city”.
Today’s generation doesn’t know it yet, but they may very well be the last to haul grain into an elevator. My generation certainly didn’t know we would be the last to shell corn so we must forgive them. To paraphrase and investment firm’s commercials, we have a large number of butterflies flapping their wings overseas and that is going to change how we handle grain, both drastically and quickly.
Most people today have seen more than one train go past with many cars carrying containers. If you live near a port or train depot you have seen containers piled high. The simple truth is empty containers get lost in yards. A friend of mine from high school was a buyer for a rather large river terminal for a while. A foreign shipping company was trying to do business with them. He spent an entire day at the rail yard trying to find one of the thirty containers they claimed was there. A few days later the representatives from the shipping company went back with him for an entire afternoon only to come up empty. Those thirty containers are probably still at the yard to this day.
Yes, we have an international standard for identifying intermodal shipping containers. A good blog post on it can be found here. There are even companies like Intermec producing barcode and scanning packages to help container handlers identify units. Container Management Magazine even has an app on the itunes store, yet containers still get lost.
Personally I’ve read a lot of articles about the trapped container problem and a lot of opinions about how to fix it. The problem we have right now is that people are trying to fix the system rather than do it right. Apparently those people in the transport industry have not talked to the people building grain bins. Yes, farmers are putting up more bins than ever, but the big operations, those looking forward, are putting up something else, container loading systems.
We are quickly approaching a day when farm will have a drying/cooling bin pair and a container loading/handling system beside it. The massive bin systems we are used to seeing will be replaced by a less pretty (due to non-uniform colors) stack of containers. Why?
- The only solution to lost empty containers at the yard is to stop having empty containers return to the yard.
- A shipping company has no idea when an empty container will return, but, if it gets filled with grain they know it will go somewhere before June of next year.
- Most shipping containers are weather tight so if the grain is dry going in the Tupperware container will keep it fresh.
- Overseas buyers want containerized grain not bulk.
- Many overseas buyers would like to know the seed planted, chemical used, and location grown of what they buy. Some will pay a premium to get information information you can easily put into a spreadsheet.
If you are of a certain age you can remember when customers from Japan used to pay a 25-30 cent per bushel premium to get Beeson soybeans. They would actually spot check every load multiple times to ensure other varieties weren’t blended in. Given the seed company trend of adding more and more stack traits we are quickly approaching a time when specific seed varieties will command pricing premiums and target different market segments.
What I see happening in the not too distant future are grain companies/elevators partnering with container shipping companies. Rather than returning empty containers back to a yard where they will be lost, some containers will be dropped off at farms. Once the containers have been filled the farmer will put together a spreadsheet identifying what seed and quantity is in each container. Either each elevator will have their own Web site, or there will be a single central Web site where the buyers can identify the containers they want and bid on them. The per bushel price obtained from the trading pits will become far less relevant than the current container-trait price. Vitamin-X enhanced corn will have a different price than Mineral-Y enhanced corn, etc. Once a container has been sold, the shipping company which owns it will come and get it.
This system doesn’t require any technology which doesn’t exist today. As some bin sales and service people have already told me, container handling systems have already started going up on some farms. Lost containers and jambed up yards are a massive problem. It is cheaper for a shipping company to let an empty container get filled and sit for several months on a farm than to let it return to a yard it may never come out of again. The additional information buyers can get will have value and cost virtually nothing to provide. (You already have a little book which tells you what you planted where.) Last but not least, the more times you handle grain the more damage it gets.
The real question is when and I believe the answer is less than three years. The customers already buy the grain in containers, we just don’t store it that way right now.