Bin-busting 2014 harvest creates storage, transportation issues

For General Manager Tim Luken of Oahe Grain Corp. in Onida, it’s an amazing irony – one of the best years on record for growing crops in South Dakota has turned out to be one of the worst years on record for moving that grain from grain elevators to markets.

“I do believe that South Dakota has probably had the biggest harvest we’ve seen in South Dakota history,” Luken said. “But elevators are probably going to handle the least amount of grain because of the rail car situation.”

Luken said it started becoming tougher to get rail cars as action heated up in the Bakken oil fields of North Dakota in recent years. In addition, last year’s severe winter in the northeastern United States made it difficult for trains to get around on schedule. That still affects grain elevators and railroads, including the Rapid City, Pierre & Eastern Railroad that serves Onida and Pierre.

“They’re doing an outstanding job with what the CP (Canadian Pacific) is giving them. But they’ve got to get the cars from the CP to distribute out to us,” Luken said.

Luken has already tallied up the 31 weeks from Dec. 1 to next July 1 and figures if he gets even 50 cars a week – 1,550 cars total – he’ll only be able to move about 5.27 million bushels of grain at an average load of 3,400 bushels a car.

But that is only about a third of what Oahe Grain Corp. has been handling in a year’s time, he said. That means that already going into next year’s harvest, Oahe Grain could already be facing the same sort of difficulty moving grain.

Bins and cars

Getting grain cars during harvest is often a problem.

But a bin-busting wheat harvest in 2014, the best harvest ever for many producers, added to the logistical problems of getting enough grain cars during harvest. Winter wheat in the area normally yields 50 to 65 bushels an acre, but yielded from 70 to 90 bushels this year. And spring wheat yields that normally run from 30 to 40 bushels an acre this year tipped the scales at 50 to 60 bushels.

Much of the state, from Watertown to Rapid City, saw good yields, Luken noted.

And now comes the row crop harvest.

Corn has been yielding from 110 to 130 bushels for many of the farmers served by Oahe Grain Corp., Luken said.

“I’m not going to say record yields, but it’s been pretty good,” Luken said.

And the sunflowers – an important crop in Sully County, frequently the top sunflower-producing county in the entire United States – are providing yields this year that farmers usually only dream about.

“I’ll bet we’re averaging 2,000 pounds and up to 2,800 pounds flowers. That’s exceptional. I wouldn’t doubt that someone might get a 3,000-pound yield – the flowers look that good,” Luken said.

The problem is moving all of those crops and Luken said his operation has faced an ongoing deficit of railroad cars needed to move the harvest. As of the end of October, Luken said he had received about 250 cars fewer than what he needed to move the crop.

“We just can’t get dug out of this hole,” Luken said. “I’ve got guys calling me every day to ask if they can dump wheat. They want to empty out their bins so they can put corn and sunflowers or soybeans in.”

In some cases, Luken said, some farmers are buying big bags in which to store wheat so that they can empty their wheat out of those bins. Luken estimated that, counting labor costs of moving the wheat back and forth, producers might be spending from 40 to 50 cents a bushel extra.

Big crops, big demand

Down the road at Harrold, General Manager and CEO Randy Brown of Harrold Terminal LLC. said the situation is similar.

“The wheat was phenomenal. It was definitely one of our best years,” Brown said.

That was followed by average-to-above-average soybeans and near-record yields for corn and sunflowers.

“I haven’t heard of any disappointing yields. When you have great big crops, there’s never enough cars,” Brown said, adding that this could be a factor in why a number of producers whom he knows built grain bins this season.

“There seems to have been a lot of on-farm building this year.”

And, notes Brown, the scenario of having so much grain the region doesn’t know what to do with it all is far preferable than what farmers have experienced in other seasons.

“Good problems,” Brown said.