Is On-Farm Grain Storage Right for You?
By: Roger Slaughter, President and Tom Miller, Grain Handling Equipment Sales
We recently read an article in the Iowa Farmer Today titled, “Storage Savvy”. In this article, Steve Johnson, Iowa State University Extension Farm Management Specialist, shared his thoughts on why growers might build on-farm grain storage versus storing at an elevator.
Benefits to on-farm grain storage:
- Harvest efficiency: On-farm grain storage means no waiting in the long lines at the local elevator.
- Flexibility: On-farm grain storage gives you the luxury of spreading out your sales as well as delivering where and when you please.
- Marketing grain: Capturing the futures carry by selling deferred futures.
- Improved basis: The basis is often weakest at harvest and strengthens into spring and early summer. On-farm storage can help improve your final cash price.
- Drying and shrinking costs for corn: Typically, elevators dry grain to 14 percent moisture whereas farmers can market their grain at a higher moisture level. Farmers can likely dry grain cheaper than local elevators.
On-farm storage considerations:
Trucking efficiency is also something that needs to be considered. Some growers do not have the luxury of a local elevator central to their fields. On top of the wait in line, the trip to the elevator can eat up a lot of time. However, on-farm grain storage is not the right answer for all operations. Evaluating your financial situation is the first place to start. It is important to calculate all costs for both scenarios to choose the best option for your operation. Preventing spoilage is key to ensuring optimum return!
Other things to keep in mind if adding on-farm storage:
- Think through traffic patterns.
- Leave plenty of room for expansion.
- Build your grain bin site in a central location
Planning long term will prevent future obstacles. If you have any questions about adding on-farm storage to your operation or information on winter promotional discounts, give us a call.