An ag economist with University of Missouri Extension says the potential for a large corn crop has farmers searching for temporary storage.
Ben Brown tells Brownfield “several people have asked me about the economic viability of bag storage, trying to come up with temporary options to hold product.” He says the economic viability of grain bag storage depends on storage costs at a commercial facility.
“We’re seeing quite a bit of volatility. Just yesterday, a commercial facility told me they had increased storage prices and were considering increasing them already again, because of the cost to them and the demand for storage.”
But Brown says grain bag storage could also be more about harvest efficiency than economic viability. If farmers don’t want to use bags for temporary storage, piling grain is another option, but he says it’s not without risk.
“Grain is exposed to the elements and you have all sorts of challenges picking it up. Unfortunately, sometimes we’re forced into those scenarios where you have to pile grain.”
He says it’s possible farmers could still be searching for temporary storage solutions as corn harvest begins.
“I would imagine there are some people starting to harvest corn early in the hopes of getting a jump on everyone else.”
Grain bins are a more permanent storage investment that can provide a good return for some farmers, but Brown says “the cost of building grain bins has grown very fast. I think that’s part of the conversation around bag storage: is there an alternative to the fixed cost of on-farm grain storage?”
EDITOR’S TAKE:
Anytime there is a prospect of a large crop, storage becomes an issue. Farmers/ranchers are seeking ways to hold on to their crops until prices recover to allow them to market their output. Elevators will quickly run out of storage as well, thus, forcing them to find temporary storage or identify immediate shipping options. In either case, the demand for temporary storage will likely drive costs up and possibly drive quality down if the crop is exposed to weather.
Farmers/ranchers are in a difficult position since they have little control over things like the weather, commodity prices or global demand. They are price takers, not price makers. Anything you can do to relieve some of their stress and concerns would be greatly appreciated. Maybe now is a good time to demonstrate your understanding by offering specials on parts or service.
