CoBank’s new report on shuttle loader ‘saturation’ in the U.S.

decrease font size  Resize text   increase font size       Printer-friendly version of this article Printer-friendly version of this article

CoBank’s Knowledge Exchange Division released a new report on the increased concentration of shuttle loader facilities in the U.S. grain belt. In the report, titled “Shuttle Loaders Approaching the Saturation Point,” CoBank economist Dan Kowalski explains that shuttle loading has revolutionized grain transport over the last two decades, but rapid construction and expansion during the 2000s has led to the potential for overcapacity. For grain cooperatives and multinational companies, compelling opportunities to invest in new facilities are increasingly limited.

“It is now estimated that the remaining feasible locations west of the Missouri River represent the last 1-2 percent of worthwhile opportunities,” notes Kowalski. “With capacity at, or near, the saturation point, grain managers considering a new shuttle loader must be realistic about the potential returns on investment.”

The cost of building a shuttle loader facility has soared from about $7 million in the 1990s to about $25 million today. In the past, grain handlers could expect a solid 15-20 percent return on investment (ROI), but as the number of shuttle facilities increased throughout the 2000s, anticipated ROI slipped to 10-15 percent and then down to 5 percent. Today, new shuttle investments, particularly in the western Grain Belt, may not break even, according to the report.

“The firmly entrenched perception that a shuttle loader enables growth, critical access to export markets and market intelligence, can lead co-ops to infer that if they do not build, the business will deteriorate over time,” says Kowalski. “Ultimately, co-op leadership is attempting to derive the cost/benefit of a major investment, while multiple unknowable risk factors loom on the horizon.”

Kowalski argues that larger grain merchandisers with multinational reach have a very different vantage point when considering investing in a shuttle loader. While they have access to export markets, sound infrastructure assets and are financially stable, these firms often lack direct origination from interior parts of the Grain Belt.

“Depending on the size and reach of each firm, the objectives for considering building a new shuttle loader tend to be very different,” Kowalski said. “However, both middle-market grain handlers and multinational firms will experience heightened risks associated with these investments and will need to employ a comprehensive operational and strategic review before committing to new ventures.”

The new report was issued by CoBank’s Knowledge Exchange Division, a knowledge-sharing practice that provides strategic insights regarding the key industries. Knowledge Exchange draws upon the internal expertise of CoBank, deep knowledge within the Farm Credit System and boots-on-the-ground intelligence from customers and other stakeholders to enhance the collective understanding of emerging business opportunities and risks.


Buyers Guide

Doyle Equipment Manufacturing Co.
Doyle Equipment Manufacturing prides themselves as being “The King of the Rotary’s” with their Direct Drive Rotary Blend Systems. With numerous setup possibilities and sizes, ranging from a  more...
A.J. Sackett Sons & Company
Sackett Blend Towers feature the H.I.M, High Intensity Mixer, the next generation of blending and coating technology which supports Precision Fertilizer Blending®. Its unique design allows  more...
R&R Manufacturing Inc.
The R&R Minuteman Blend System is the original proven performer. Fast, precise blending with a compact foot print. Significantly lower horsepower requirement. Low inload height with large  more...
Junge Control Inc.
Junge Control Inc. creates state-of-the-art product blending and measuring solutions that allow you to totally maximize operating efficiency with amazing accuracy and repeatability, superior  more...
Yargus Manufacturing
The flagship blending system for the Layco product line is the fully automated Layco DW System™. The advanced technology of the Layco DW (Declining Weight) system results in a blending  more...
Yargus Manufacturing
The LAYCOTE™ Automated Coating System provides a new level of coating accuracy for a stand-alone coating system or for coating (impregnating) in an automated blending system. The unique  more...
John Deere
The DN345 Drawn Dry Spreader can carry more than 12 tons of fertilizer and 17.5 tons of lime. Designed to operate at field speeds up to 20 MPH with full loads and the G4 spreader uniformly  more...
Force Unlimited
The Pro-Force is a multi-purpose spreader with a wider apron and steeper sides. Our Pro-Force has the most aggressive 30” spinner on the market, and is capable of spreading higher rates of  more...
BBI Spreaders
MagnaSpread 2 & MagnaSpread 3 — With BBI’s patented multi-bin technology, these spreaders operate multiple hoppers guided by independent, variable-rate technology. These models are built on  more...


Comments (0) Leave a comment 

Name
e-Mail (required)
Location

Comment:

characters left


Pacesetter Grain Hopper

The Pacesetter Gain Hopper features original and innovative ideas like the patented RollerTrap™, the industry’s easiest to open and maintain trap ... Read More

View all Products in this segment

View All Buyers Guides

Feedback Form
Feedback Form