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A grain company that’s built to move

This Saskatchewan pulse trader chose speed and flexibility over bricks and mortar.

When the Affleck family started their pulse crop business near Regina, Sask., they looked forward to having a couple of months off each year between crops. Three years later, they’re still waiting for that vacation, as demand for their service has far surpassed projections.

Mobil Grain buys peas, chickpeas and lentils from producers, cleans them to export standards and then ships them internationally, mostly to India. What’s different is that the Afflecks’ pulse-cleaning facility isn’t fixed to one location. It can be moved by truck to wherever pulse traffic is highest.

“It’s a bit like an oil rig,” says Lavern Affleck, “in the sense that it’s modular and transportable. You can take it somewhere for the duration of a project, then move it somewhere else.”

Lessons learned along the way

Years ago, the Affleck family was in the seed-growing business, and owned a seed-cleaning plant. More recently, brothers Lavern and Sheldon were partners with a venture capital firm in building and managing an Identity Preserved (I.P.) pulse company with unique colour-sorting technology.

Both experiences gave the brothers an abiding sense of what they wanted, and didn’t want, in their next business.

“We had the choice of how we chose to compete, either through producing the highest quality product, or through achieving the lowest cost of production,” says Lavern. “We thought demand was strongest for the low-cost facility, so we built that first.”

How does Mobil Grain keep costs down? First, because the cleaning plant isn’t set in concrete, they saved on construction costs. Second, the plant is highly automated, so two or three staff can run the show. In just 30 minutes, they can unload a standard-sized grain truck, process it for export and load it into a railcar.

Third, their Internet-accessible database manages the physical plant’s automated processes in an I.P. environment. It also manages the flow of information in real time, producing all documents relating to accounting, producer payments, Canadian Grain Commission reporting, shipping, tracking and exporting. A fourth advantage is the ability to relocate the plant at any time in response to shifts in freight modes, pricing or production areas. In theory, they can serve farmers anywhere there’s a road and a railway.

Focusing on cost of production has allowed the Afflecks to sleep better at night, and build stronger relationships with both sellers and buyers.

“You don’t have to worry about someone coming in and out-bidding you,” says Lavern. “We can pay the farmer a little bit more and charge the buyer a little bit less. It doesn’t have to be much, but it’s enough to give you the edge.”

Pulse market set to grow

Today, Mobil Grain’s single unit buys, cleans and sells pulse crops exclusively in Saskatchewan. While Afflecks’ model could work well for other crops and other areas, Lavern expects to be kept busy with his province’s 4.6 million acres of peas, chickpeas and lentils.

“Pulse crops are established in Saskatchewan very strongly,” he says. “We’ve never had as much forward-contracting as we have now. Two years ago, number-one red lentils were priced at 15 cents per pound on a forward contract; now it’s 40 cents per pound. In addition, the agronomic benefits are great. Anyone who can grow pulses, they love it.”

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08/23/2010 11:22:06