Freight redirection behind Viterra's 17 silo closures

SILO SLASH: 17 Viterra grain sites to close


Grain
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Viterra has closed 17 of its upcountry sites indefinitely.

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A group of farmers met on Thursday last week after it was announced the Robertstown silo would be closed.

A group of farmers met on Thursday last week after it was announced the Robertstown silo would be closed.

VITERRA said it had the long-term future and supply chain efficiencies in mind when making the tough decision recently to close 17 of its upcountry sites.

Two weeks ago, the company informed growers that six sites open last year at Minnipa, Kyancutta, Brinkworth, Paskeville, Millicent and Walpeup in Vic would not "play a future role in the Viterra network".

A further 11 sites that were not open the year prior at Cungena, Waddikee, Kielpa, Wharminda, Orroroo, Redhill, Robertstown, Long Plains, Stockwell, Wunkar and Alawoona would also be closed permanently.

Viterra operations manager Michael Hill said the company was making changes to its site footprint to reflect the changing delivery patterns of growers and the changing environment, and provide customers with the most sustainable and efficient supply chain.

"Since 2010, the average truck size has increased by 30 per cent and those bigger trucks are delivering to our bigger sites," he said.

"That's why we are choosing to focus our expenditure on those larger sites, where we can offer higher levels of service through increased elevation capacity, operating hours, segregations, classification offices, larger weighbridges and improve the turnaround times. It is also where we will incorporate any new technology.

"Other reasons include a need for better quality management and food safety requirements."

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Mr Hill said Viterra planned to open 67 sites across SA for the 2019-20 harvest and the company's overall storage capacity and amount of segregations would not change for the major crops grown in this state.

It will also hire the same amount of harvest staff.

"Forty of those sites take 90pc of our receivals," he said.

"The sites that were closed represented less than 2pc of total receivals (based on a five-year average).

"The benefits from efficiency gains made from closing these sites will be reflected back to the growers."

We will try to be as open as possible with our growers on these decisions and where money is being spent going forward. - MICHAEL HILL, Viterra

Mr Hill said the company planned to meet with its operations managers next week to see where new infrastructure could be best allocated for the coming harvest.

"We spend $40 million every year on capital and maintenance," he said.

"We will try to be as open as possible with our growers on these decisions and where money is being spent going forward."

This includes bunker storage capacity increasing at the larger sites of Roseworthy, Snowtown and Cummins by 50,000 tonnes.

"Roseworthy will also have an additional drive-over hopper stacker, improving elevation capacity to 3500t per hour," Mr Hill said.

"We still have about 10mt of storage capacity within the existing network, which will more than cater for the needs of growers if we do get a bumper harvest again."

Worlds End cropper Simon Schmidt says all SA graingrowers need to stand up to Viterra, or it might be their silo being closed next year.

Worlds End cropper Simon Schmidt says all SA graingrowers need to stand up to Viterra, or it might be their silo being closed next year.

Furious farmers meet

A group of 30 farmers affected by the Robertstown silo closure met on Thursday last week to discuss possible actions going forward.

They planned to meet with the Eudunda silo committee to talk about its future after being told the bunkers there would be decommissioned.

Worlds Ends cropper Simon Schmidt attended the meeting, with Robertstown his preferred silo.

He said all SA graingrowers needed to stand up to Viterra, or it might be their silo being closed next year.

"It seems all Viterra want to do is make their life easy by having big central hubs, like Roseworthy or Saddleworth, and encourage everyone to cart there," he said. "But it's going to cost us big time."

Mr Schmidt's family has been farming in the district for more than 100 years.

And while he concedes they are experiencing one of the worst droughts in history, "there is a lot of land around here that can produce some big tonnages".

Viterra says these silos don't get used to their capacity, but often their segregations determine where we can and can't deliver. - SIMON SCHMIDT, Worlds End

"I can understand the commercial aspect of closing a site for a year, but closing 17 sites permanently won't help the farmer in the future or the rest of those working in the system," he said.

"Eudunda will probably be next. They're already closing the bunkers there.

"Viterra says these silos don't get used to their capacity, but often their segregations determine where we can and can't deliver."

Mr Schmidt calculated he could go from incurring freight costs of $16.80/t to port to paying a private freight operator up to $25/t to get it to Roseworthy, then an extra $10/t to get it to port.

Robertstown farmer Simon Niemz was concerned about the cost of having to cart his grain further, possibly to Roseworthy.

"We may also have to increase on-farm storage because we won't be able to get our grain to Roseworthy fast enough," he said.

Mr Niemz was also disappointed about Viterra's lack of communication with growers about the closures.

"Not everyone was emailed," he said.

Robertstown farmer Naomi Mosey said local roads weren't made for bigger trucks or extra vehicles.

"The roads between here and Eudunda are not built for that many loads at one time of the year," she said.

"It's alright if they cart out of here throughout the year, that's only one semi. But not semis going both ways."

Viterra logistics manager James Murray said the company decided to decommission bunker storage at Eudunda because it had been under-utilised.

"Even in record harvest of 2016, only 30 per cent of the capacity at the Eudunda bunkers was used," he said.

"So when these sites are under-utilised, we reallocate that infrastructure to where it will be better utilised.

This story first appeared on Stock Journal.

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