New cooperative grain silos lower transport costs for turkey growers
- July 1, 2008
The Virginia Poultry Growers Cooperative unveiled a $10.5 million grain silo complex near Harrisonburg in early May — just in time to help save money on the high shipping costs associated with getting turkey feed to the organization’s 158 members.
The complex, located on a rail line, contains twin 148-foot-tall silos. Each silo can store 300,000 bushels of corn, the amount that can be hauled in by a 75-unit train. That kind of bulk buy allows the organization to get a freight discount of 13 to 15 cents per bushel of corn, according to James Mason, president and general manager of the Virginia Poultry Growers Cooperative.
The cooperative will reap additional savings because corn can be transported on an as-needed basis by leased rail car — rather than diesel-burning tractor trailer — to the organization’s Broadway Mill. There, corn is ground and mixed with soybean meal and other ingredients to make turkey feed.
Because the company is now a bulk purchaser, Mason says, “it allows us to price our own corn and it assures us a supply of corn.” Still, Mason acknowledges, the expected transportation savings are not much in light of the rapidly rising cost of corn. The price increased from $2 per bushel in 2006 to $6 in May. He blames the current prices on ethanol, which uses corn as its main source of production, and he adds that cooperative members are expecting more price increases.
“The market is so out of whack,” Mason says. “What used to be two pennies on freight savings would be huge, but now 20 or 30 cents doesn’t mean anything because the corn market is so high. We’re just being killed.”