Connection Spring 2015 - Page 13

NEWS GRAIN Growing room C urrently, United Ag has roughly 5.2 million bushels of grain storage capacity split between four locations, including El Campo at 420,000 bushels, Port of Victoria at 400,000 bushels, Hillje at 3.3 million bushels and Danevang at 1.1 million bushels. The last storage addition was in December of 2008 at the Hillje elevator when two upright bins were added to increase the capacity by 850,000 bushels. Prior to the drought in 2011, United Ag had operated at near capacity levels in both 2009 and 2010. Since 2011, the elevators have operated at 120 percent capacity in 2012, 130 percent capacity in 2013 and 138 percent capacity last year. United Ag has been able to operate at above capacity levels by shipping sorghum to port at harvest, transferring corn bushels to available storage further south, utilizing our cotton warehouses as flat storage (in 2012 and 2013), and After operating over capacity for three straight years, United Ag adds storage capacity to Danevang location. securing additional off-site storage. Although each of these strategic plans allowed our producers to continue delivering grain with little interruption and created the ability for United Ag to turn away zero loads, they still brought about unnecessary cost and inefficiency. The most notable costs were excessive freight charges and the inability to store sorghum to gain basis appreciation. These costs and inefficiencies associated with insufficient storage weighed heavily enough with the United Ag Board of Directors that a decision has been made to build an additional 1.08 million bushels of storage at the Danevang location. The decision to place the additional storage at Danevang was primarily based on the lack of space needed for grain coming from the south. This additional storage will be in the form of flat storage that will provide flexibility to accommodate other types of commodities, such as cottonseed. The 42,000-square foot flat storage building will be located directly west of the cotton gin with the pit near the existing grain dryer. The pit will be set up to unload both hoppers of a trailer at once allowing the facili