Storage options help grain growers go to market

Farm Forum

GREENSBORO, N.C. – Putting grain into storage has always been a common practice, especially after a season of above-average production, like 2014. But it’s not just about finding a place to hold increased yield. There are financial reasons for growers to delay selling all their grain immediately after harvest.

“The grain market is better in January,” said Craig Abell, a Syngenta business development manager. “If growers aren’t locked into a local elevator, they can shop around for the best price.”

Additionally, growers who have grain throughout the year may be more appealing suppliers to the expanding ethanol market. “Ethanol producers would rather not store grain on site. They’d rather have it delivered throughout the year,” said William Edwards, a retired Iowa State University economist. “In order to work with them, producers have to do the storage.”

Given these factors, new storage bins have begun appearing on farms across the country. In fact, there’s more on-farm storage today than there ever has been, Abell says. “One reason is harvest efficiency: The local elevator might be open from 7:30 a.m. to 5 p.m., but on the farm, you can unload on your own schedule.” There may also be tax benefits to building storage. In many cases, growers can expense the purchase.

But while on-farm storage in a traditional upright storage bin is one possibility for storing grain, it may not be for everyone, said Jeff Spence, grain division manager at Crystal Valley Co-op in Lake Crystal, Minnesota. “If growers are looking toward retirement, they might not want to spend the money,” he said. “But it might be a better fit for growers who are expanding. The more aggressive growers are out there purchasing acres and storage to go with it.”

The potential downsides of on-farm storage bin ownership include the cost and the time needed for maintenance and monitoring. The one-time-use plastic bag addresses some of these concerns. “If you have a big crop, it’s a really economical way to have temporary storage, compared to a $250,000 grain bin,” Abell said. And for growers who rent acreage, renting on-farm storage space may be possible.

For off-farm storage, investing in condominium storage space or renting storage space built by commercial elevators are two alternatives. Elevators can usually build storage space at a lower per-unit cost than a grower can, and the elevator takes on maintenance duties.

Despite the potential benefits, not all growers choose to store grain. The biggest challenge, aside from the cost to build or rent the storage infrastructure, is managing stored grain throughout the winter and spring to minimize spoilage. Abell compares on-farm storage to having children on the farm. They both require care.

“The mechanics have to be managed,” he says. You need to check the grain every 10 to 14 days. You have to service the fan, the dryer, the spreader. It seems basic, but I can’t tell you how many situations I’ve seen where the bin is full of grain, and then the dryer won’t work.”

Ultimately, the best storage option or combination of options for a grower will depend on the relative costs and how each fits into a farm’s overall system, which is the most important point to remember, Edwards said. “Don’t look at storage in isolation,” he said. “Make sure harvesting, storage and transportation all fit together.”

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