Posted on August, 2, 2024 at 09:24 am
We were supposed to get another grain bin built this summer, but the builder was overbooked. Our options for extra grain this fall are: taking it straight to the elevator, converting a toolshed to corn storage, or lining up someone to put corn in bags. How do we evaluate these options?
Profit Planners panelists include David Erickson, farmer, Altona, Ill.; Mark Evans, Purdue Extension educator, Putnam County, Ind.; Jim Luzar, landowner and Purdue Extension educator, Clay and Owen counties, Ind.; and Steve Myers, farm manager with Busey Ag Resources, LeRoy, Ill.
Erickson: Obviously, part of the comparison is cost and availability of labor to allow considering the second and third options. Storing grain in a shed designed for machinery is more involved than you might think and has the potential to be a real disaster for grain quality and the building. Storage bags could be a good option, but I would encourage you to talk to other farmers who have done this, so you have the benefit of their experience guiding your decision. The easiest option might be taking grain to a local elevator, but you need to consider timeliness, cost and marketing opportunities.
Evans: A favorable basis might persuade you to find alternative storage. Be safe with your toolshed by assuring that you have adequate structural support and can control or monitor grain temperature. Consider how you will move grain from the drying facility to the toolshed, or if it can come straight from the field and be cool enough that it does not overheat.
Bags are a good alternative, but there are several considerations. Make sure your bag material is rated for grain. Silage bags are not strong enough. The grain going in should be dried to 13% to 15%. Bags should run north to south so grain inside has more equal sun exposure. Bags will need to be monitored to fix any holes that appear.
Luzar: Evaluate your possibilities for fall harvest and storage. What is the expected basis level? What are costs for commercial storage? Can trucking logistics accommodate hauling from the field to the elevator this fall? Can your harvest operations handle lines like we experienced last fall?
Fitting the barn for grain storage will entail having load and unload capabilities. Bags will have a cost per bushel associated with the bags, loading and unloading. Will the barn fit into your longer-term storage plans? This option would require a few years of use to justify investment dollars. Does the annual cost of these alternative storage options exceed returns to storage projected?
Fall basis levels may be slipping in your area and make hanging onto physical crop worth more than storage costs. A relatively tight basis in your region may better support selling physical grain and regaining ownership with the futures market.
Each option comes with anticipated costs, returns and risk. Evaluating these variables side by side will allow you to proceed with more confidence. We didn’t mention “storing on the stalk” — way too much risk!
Myers: With your commitment to the new bin, it appears your needs are best met with the elevator or bagging. Converting the toolshed seems to be an expense that is not a fit for the long term. To evaluate the elevator option, consider cost of ownership in shrink, storage and opportunity cost of commercial storage versus an outright cash sale, or outright cash sale and re-own on paper. For bagging, consider the timing, cost and availability to both bag and pick up grain.
Source: Farm Progress