Unloading to the elevator, I suspect, is for blending purposes. All corn, from the ultimate users perspective, is not the same. There are various grades of virtually all commodities - corn, beans, wheat, hay, coal. Just because all coal is black, doesn't mean all coal has the same chemical & metallurgical properties. The same qualitative differences apply to agricultural commodities. Just like anything else, higher quality product costs more than lower quality product. By blending various grades of product, the elevator can deliver virtually any grade of product that the buyer desires.
Never too old to have a happy childhood!
As Dave pointed out, it is not all that backed up.
Last night we cabbed a crew to the empty in the siding, pulled it up to the crew change point at North Yard, and handed it off to a BNSF crew.
Same crew cabbed back to Cargill, pulled another one out and to North Yard, brought in one of the UP’s trains, took it out to Cargill, parked it on the main, pulled a second BNSF out of Cargill into the siding, then spotted the UP in its place…as Dave pointed out, all of this is going overseas in ships, and that’s the biggest hold up of all, because it all has to be timed right, the ships tie up out at Bolivar Roads just off the Galveston coast, and begin their transit of the ship channel, timed to place them in Cargill at a specific time,
I have no clue as to how or why, but the grain inbound from the BNSF is almost always loaded directly out to ships, while the grain from the UP almost always goes into the elevator…I would assume whoever is shipping on the BN is selling direct to a particular customer and paying for an expedited service.
The grain business is so lucrative that the local union and the my carrier had worked out an agreement for a engineer and conductor extra boards devoted only to grain, with the crew being on duty 12 hours per shift, working nothing but grain trains.
We service two elevators on our property, Cargill, which is huge, and Hansen Muller, which is a small public elevator, a stone throw away from North Yard; we can shove over to it and pull it then spot 80 cars in there with a switch crew in under an hour.
And, we service a company that deals with bagged grain for export, who get 40 to 50 boxcars of bagged USDA export grain every other shift, 50 pound bags of rice, lentil, dried peas and sometimes dried corn, this stuff also goes direct from the boxcar to ship.
These extra boards would be bulletined from August 1 to December 31.
Regular pay rates applied, (8 straight and 4 overtime hours per shift) and the normal 6th day requirement in place, plus a guarantee of a 12 day half, which I doubt would ever be claimed, and the crews could not be assigned to any other work, grain and grain only….the deal fell through because the union wanted the normal meal period time, (5 hours 40 minutes after shift begins) to apply, with a second meal period left floating, if not taken, then a meal period claim.
The carrier wanted only the one meal period….they could never come to a compromise, so the deal never materialized, which is a shame, for a single guy with no commitments outside the railroad it would have been a serious money train!
As it is right now, our extra boards get run through every day, and the carrier will blank some assigned jobs to move the crews to grain trains.
Not the best solution, but for the crews, it means a pretty good paycheck, they get a time claim for being moved from their regular assigned job, plus they can expect a 12 hour day on top of that.
We just finished two back to back new hire classes with 15 guys in each class, and an engineer’s class with 5 guys in that, and expect another new hire class to form up last of October, with another engineer’s class close to the same time.
We don’t foresee the grain business dropping off drastically anytime soon.
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PNWRMNM edblysard As of yesterday, we had three BNSF unit grain trains in Cargill unloading, one empty BNSF in the outbound siding, two loaded BNSF waiting at North Yard to go out to Cargill, and two UP loaded tied down outside our property waiting to get in. Last year, we built another receiving track to hold 125 car unit trains at North Yard because the projections said we would need it, if this keeps up, I think we may have to build one more. And the farmers and their psychophant politicians are screaming for more cars while one consignee has 8 trains, at least 800 cars tied up. Damn those dastardly railroads! Serious question - why does Cargill have 8 trains backed up?
edblysard As of yesterday, we had three BNSF unit grain trains in Cargill unloading, one empty BNSF in the outbound siding, two loaded BNSF waiting at North Yard to go out to Cargill, and two UP loaded tied down outside our property waiting to get in. Last year, we built another receiving track to hold 125 car unit trains at North Yard because the projections said we would need it, if this keeps up, I think we may have to build one more.
As of yesterday, we had three BNSF unit grain trains in Cargill unloading, one empty BNSF in the outbound siding, two loaded BNSF waiting at North Yard to go out to Cargill, and two UP loaded tied down outside our property waiting to get in.
Last year, we built another receiving track to hold 125 car unit trains at North Yard because the projections said we would need it, if this keeps up, I think we may have to build one more.
And the farmers and their psychophant politicians are screaming for more cars while one consignee has 8 trains, at least 800 cars tied up. Damn those dastardly railroads!
Serious question - why does Cargill have 8 trains backed up?
They aren't really that backed up. One is empty, ready to return for loading. 3 are being unloaded. 2 from each railroad are waiting for a train ahead to be emptied. Cargill can unload multiple trains, 24x7. Within 24-36 hours all of those trains should be emptied.
Now the next part of the puzzle enters in. They took the grain out of the hoppers and put it in the elevator. Where does it go from there? At Cargill most likely a ship. So the next question is whether there is a ship on berth, is it clean, what is it loading, how big is it? If the ship is loading milo and the trains holding are corn then the trains may have to wait until the ship is loaded or to let other milo trains around the corn trains to finish the ship.
If you talk to a railroad grain manager he/she will know all about ship schedules, when they are due, what they will be loaded with, how big they are, whether they have passed inspection.
Dave H. Painted side goes up. My website : wnbranch.com
Mac
We, the PTRA, get a bonus if we can get the unit train turned and ready to depart in 24 hours from the time it hits our property….real good incentive to keep them moving, we will call as many extra crews as needed…the next few months will be busy.
edblysard As of yesterday, we had three BNSF unit grain trains in Cargill unloading, one empty BNSF in the outbound siding, two loaded BNSF waiting at North Yard to go out to Cargill, and two UP loaded tied down outside our property waiting to get in.
This is the part of the picture that the railfans (and probably farmers) don't see. In addition to all those trains, the BNSF and UP probably have 1 or 2 trains each within 24 hours of the Houston, another 1 or 2 each within 48 hours of Houston, another 1 or 2 each within 72 hours and several more loaded, being loaded or empties planned to spot. The railroads have to watch the entire supply chain. If the destination backs up they intentionally reduce the launches out of origins, to match the capabilities of the destination.
Many times when a train is holding its not because there is a problem at the location the train is, the constraint may actually be literally 1000 miles away.
One way to increase the empty car supply is to unload the loads quickly.
RRKenCorn is DIRT cheap right now. Record harvest this year again. Export will rule the roost, and if last year was a trend, the lion's share will leave the country via the Gulf States, not PNW. BN and CP are both under the gun for failing to deliver last harvest. Locally, elevators here are bone dry, not even dirt on the floor. That will change in a few months. Ethanol plants are loading up on as much grain as they can right now and futures as the price is right. Mixture of oil price and grain makes for very profitable situation. I look for yields of 220+ per acre on corn, and quite respectable numbers for beans.
Thanks to Chris / CopCarSS for my avatar.
As I mentioned earlier, somebody told me that this year’s corn crop in Minnesota is the largest in the State’s history. He said all the corn growing conditions came together perfectly. But he says it is a bad thing because the bounty will collapse corn prices. He said the price will keep dropping, and the longer farmers wait to sell, the worse off they will be. So he is predicting a major problem from this bounty of corn. I don’t know if he is right or wrong.
RRKen is right about this year's corn harvest. I'll go so far as to say that in my lifetime we in northern Ohio have seldom if ever had such a perfect spring and summer for growing things as we have enjoyed this year. On TV I have yet to hear the usual obligatory piece about how the X crop has been hurt this year by too much/too little of something. Everywhere I drive I see bounty in all our fields and our livestock look well.
In the years right after the Civil War this time of year was called, by farmers and railroad men anyway, "the moving of the crops." Isn't that a majestic term? Unsurprisingly, a shortage of railroad cars and falling commodity prices was the complaint of western farmers even then. In consequence Populisim and later Wm. Jennings Bryan commanded the attention of the nation. Not too much has changed.
Dakguy201 On a related matter, last week the South Dakota Rail Board voted $450 million to various rail related projects in the state. An undisclosed portion of this will go to build a wye where the BNSF crosses the UP in Sioux City Iowa. The reason it is needed is that an independent railroad has trackage rights to Sioux City on the BNSF, but they currently can not reach an interchange with the UP. In effect, the wye would have the effect of uncaptivating them and the customers along that line.
On a related matter, last week the South Dakota Rail Board voted $450 million to various rail related projects in the state. An undisclosed portion of this will go to build a wye where the BNSF crosses the UP in Sioux City Iowa. The reason it is needed is that an independent railroad has trackage rights to Sioux City on the BNSF, but they currently can not reach an interchange with the UP. In effect, the wye would have the effect of uncaptivating them and the customers along that line.
Thanks dakguy201. Those are the issues I was wondering about. I can see that if the grain is tarped, protected from rodent infestation, and ventilated, it would be adequately protected even though it requires some extra expense.
When you say "on the ground" you are actually talking about a concrete stab, suitably protected from below ground water by a vapor barrier and (after the crop is placed) covered by heavy duty tarps. It will also have a system of air blowers and air distribution ducts laid in place before crop is received.
Let's assume the crop is corn and the farmer is not claiming it is GMO free (not genetically modified). In addition to being weighed it will be tested for water content. Above 20% a price penalty will be imposed or the load rejected. It will then be placed in a vertical silo or on the outdoor slab. In either case, the moisture needs to be reduced to the 13% range to prevent spoilage. Air is blown thru the bottom of the storage facility to accomplish this, and it may have to be heated with propane to achieve a reasonable rate of drying. The vertical silo has a major advantage in the drying process. The silo can be unloaded via a simple system of gravity fed conveyors while the pad requires the services of a bucket loader and possibly trucks to move it to the rail loading facility.
The other two factors are protection from extreme weather events and isolation from rodents and the deer population. Obviously the silo has the advantage in these areas.
What are the disadvantages of storing grain on the ground compared to in closed silos?
The "newer, more progressive", elevators are built out in the country so that they have the space to install storage pads as may be necessary. In general the traditional small town elevator sites are expansion limited by having a rail right of way on one side and other businesses/dwellings surrounding them on the other sides. In addition, during harvest they may create traffic problems with semis awaiting unloading, and the weight of arriving loads punishes city streets. A common solution is to move 5 miles down the rail line to a site that also that has good road access, buy 10 acres of farmland and build anew. The old elevator may continue to be used for specialty crops or as a feed mix facility for local feedlot operators.
I assure you that every manager of such a facility has spreadsheets that compare the costs of outdoor storage to enclosing the same pad(s) with a building or beginning anew with more vertical structures. However, the spreadsheets deal more with the costs of alternatives than shedding light on the question of the current crop being an outlier in terms of size or the new normal. It is the same uncertain situation the railroads face when deciding about capacity additions to existing lines or obtaining additional crews, engines and rolling stock.
Murphy Siding dakotafred Dakguy201 It is normal for crop to be stored outdoors temporarily during the peak of harvest season. Locally, we have three outdoor concrete pads at the elevator as an addition to their silo capacity. Each pad is almost the size of a football field. By November they will all have a pile of corn 30 or so feet high. This year that is not going to be enough capacity, so more will have to be improvised. Some of that corn may go to local animal feeders, but the bulk of it will leave by rail. Man, that is a lot of expensive concrete. At what point do you bite the bullet and buy more indoors storage? I know that some local elevators around my area have been doing the *temporary* corn storage gig for the 30 years that I have lived here. This includes elevators that aren't rail served.
dakotafred Dakguy201 It is normal for crop to be stored outdoors temporarily during the peak of harvest season. Locally, we have three outdoor concrete pads at the elevator as an addition to their silo capacity. Each pad is almost the size of a football field. By November they will all have a pile of corn 30 or so feet high. This year that is not going to be enough capacity, so more will have to be improvised. Some of that corn may go to local animal feeders, but the bulk of it will leave by rail. Man, that is a lot of expensive concrete. At what point do you bite the bullet and buy more indoors storage?
Dakguy201 It is normal for crop to be stored outdoors temporarily during the peak of harvest season. Locally, we have three outdoor concrete pads at the elevator as an addition to their silo capacity. Each pad is almost the size of a football field. By November they will all have a pile of corn 30 or so feet high. This year that is not going to be enough capacity, so more will have to be improvised. Some of that corn may go to local animal feeders, but the bulk of it will leave by rail.
It is normal for crop to be stored outdoors temporarily during the peak of harvest season. Locally, we have three outdoor concrete pads at the elevator as an addition to their silo capacity. Each pad is almost the size of a football field. By November they will all have a pile of corn 30 or so feet high. This year that is not going to be enough capacity, so more will have to be improvised. Some of that corn may go to local animal feeders, but the bulk of it will leave by rail.
Man, that is a lot of expensive concrete. At what point do you bite the bullet and buy more indoors storage?
Maybe -- I don't know -- some of these farmers need to haul their grain to newer, more progressive, elevators. I've been past a couple of the new "supers" in western North Dakota this summer, and they don't have any corn on the ground or on pads.
Dakguy201 Last year the corn crop was 13.016 billion bushels -- a new record. The USDA is estimating now that this year will be 14.395 billion. The biggest corn user is the ethanol producer at 37% of the crop. The corn typically arrives at the plant by truck but the ethanol leaves by rail. The EPA is considering a rule change that would decrease ethanol usage. If adopted, this would mean that even more of the corn crop has to leave farm country by rail. I really don't think there is going to be any short term relief from situation as I suspect the ability of the farmers to produce still is increasing faster than the rail capacity to move it. Locally, we have a siding that usually contains a unit train -- 3 engines and more than 100 covered hoppers -- awaiting a crew. On bad days, one unit train will be in the siding and another sitting on the main. I suspect the average dwell time in that siding is close to 24 hours.
Last year the corn crop was 13.016 billion bushels -- a new record. The USDA is estimating now that this year will be 14.395 billion.
The biggest corn user is the ethanol producer at 37% of the crop. The corn typically arrives at the plant by truck but the ethanol leaves by rail. The EPA is considering a rule change that would decrease ethanol usage. If adopted, this would mean that even more of the corn crop has to leave farm country by rail.
I really don't think there is going to be any short term relief from situation as I suspect the ability of the farmers to produce still is increasing faster than the rail capacity to move it.
Locally, we have a siding that usually contains a unit train -- 3 engines and more than 100 covered hoppers -- awaiting a crew. On bad days, one unit train will be in the siding and another sitting on the main. I suspect the average dwell time in that siding is close to 24 hours.
Dakguy201 Locally, we have a siding that usually contains a unit train -- 3 engines and more than 100 covered hoppers -- awaiting a crew. On bad days, one unit train will be in the siding and another sitting on the main. I suspect the average dwell time in that siding is close to 24 hours.
The normal allowance for loading a unit train is 24 hours. The same allowance is normal at the unloading site.
NKP guy:Another alternative is to buy Berkshire Hathaway B shares...or purchase his big holdings such as KO, XOM, AXP, MCD, Wells Fargo, etc.
He did buy BNSF at the right time...but then again he usually buys at the right time.
Ed
Unfortunately the free market system hasn't been viable in the US for over 150 years. Thats why the trans con roads were given so much land, and why they are regulated today.
It's not a matter of shipping instantly, it's getting LAST YEARS crop out of the elevators, to make room for this years crop. While out door corn piles are a short term norm, It's usually late in harvest, after the elevator is full. Now I've heard of elevators piling last years corn outside before harvest, to make room for this years crop. New (wet) corn has to be dried before you even have a hope of it lasting in an out door pile.
As to the trucking question, the cost to truck a load of corn from the dakotas to the pnw is more than the corn is worth.
Just my Ag background view of things
Tim
Murphy Siding Dakguy201 Locally, we have a siding that usually contains a unit train -- 3 engines and more than 100 covered hoppers -- awaiting a crew. On bad days, one unit train will be in the siding and another sitting on the main. I suspect the average dwell time in that siding is close to 24 hours. Where is that? Elk Point / Jefferson area?
There is an old Milwaukee Road switch yard at North Sioux City. When they bought the line from the State of SD, BNSF rerailed the track most distant from the main and extended it considerably. They also installed plumbing under a cross street so that a long train can be cut and remain on air. Technically, the siding is within the Sioux City yard limits although perhaps 10 miles from the BNSF switch yard. BNSF uses that siding to store trains because if they go into the Sioux City switch yard, they will face a mile backup move across city streets to be wyed to continue their trip geographic south to Lincoln NE.
NKP Guy: It is normal for crop to be stored outdoors temporarily during the peak of harvest season. Locally, we have three outdoor concrete pads at the elevator as an addition to their silo capacity. Each pad is almost the size of a football field. By November they will all have a pile of corn 30 or so feet high. This year that is not going to be enough capacity, so more will have to be improvised. Some of that corn may go to local animal feeders, but the bulk of it will leave by rail.
From what I read in the papers there's an interesting situation west and north of Chicago. First, I'm reading about grain being dumped on the ground because of a lack of car availability; second, endless trains of oil are moving east; third, taconite ore stocks at steel mills are threatened by the railroads being so clogged with traffic from gain and oil.
You have to hand it to Warren Buffet. I wish I had bought BNSF myself, taken it private, and could, like him, watch the profits that must be rolling in. Instead, I took his advice about buying a position in an indexed mutual fund and am having a year almost as good as his.
petitnj I keep asking Congress where the trucks are that use the free highways that nearly put the railroads out of business. The farmers are complaining because the rails have become so efficient that their rates are hard to beat.
I keep asking Congress where the trucks are that use the free highways that nearly put the railroads out of business. The farmers are complaining because the rails have become so efficient that their rates are hard to beat.
Strikes to the heart of the matter. Thirty years ago, as a reporter, I did a story on some small elevators that were making a lot of noise about losing their branch line. One manager confessed (rather sheepishly) that he hadn't shipped by rail for years. Trucks were good enough to haul his grain 500 miles or so to the Twin Ports. I guess he just wanted the railroad available for backup.
Now, it's true, most Upper Midwest production seems to go to the West Coast, a rather longer haul. The elevators (and farmers) go there because the rails give them a good rate in return for that longer haul. If they don't like the service, there is still the Twin Ports, among other options.
But the elevators (and farmers) are like most of us; as Baltimore Orioles manager Earl Weaver once explained to an umpire, in the heat of argument: "All I want is my fair advantage!"
2013 was a record crop year. Unfortunately, with the economy in rebound and increased oil shipments thru North Dakota, the railroads quickly exceeded capacity as the winter slowed things down. The railroads are scrambling to catch up and certainly will feel the crush of this year's record corn crop again.
The railroads have hired crews and bought more equipment and are double tracking where they can, but it will take them years to catch up.
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