• As we fixate more and more on the current price of our fall harvested grains, let’s also think a little about some related farm marketing decisions.
Two things we may want to put through our trusty farm management calculator are; 1) what will it cost us to put grain in long-term storage, and 2) what is the economic gain of marketing our corn stalks?
Cost of storing grain
The availability of storage adds flexibility to a grain farming program. As part of our harvesting system, storage facilities increase the rate at which harvesting can be completed by decreasing the time spent transporting and unloading grain.
Long-term storage also enables the producer to use marketing tools that may be able to capture seasonal price increases and/or better basis levels following harvest. The proper use of storage can increase a producer’s income.
However, maximum storage income results from selective rather than continuous use of storage facilities. Increased income does not always translate into increased profit.
The cost components of storing grain versus selling at harvest are:
• Storage facility cost — we pay this cost if we use storage in any particular year or not
• Interest on grain inventory — putting grain in the bin will have an interest cost of roughly $0.04 per month for each bushel of corn and $0.09 per month for soybeans this year
• Extra drying of corn — long-term storage requires moisture lower than what we can deliver at harvest
• Extra corn shrinkage
• Extra handling cost — commonly called in & out costs
• Potential quality deterioration
Let’s not store our 2013 harvest unless we understand the true costs and have a reasonable expectation to recover these expenses.
Click here for a detailed spreadsheet to assist with our decision making.
Estimating the value of corn stalks
Following harvest, corn stalks are an abundant source of winter feed for low maintenance ruminant livestock. When supplemented with protein, vitamins, and minerals, stalks can supply the nutritional needs of livestock in moderately good body condition during fall and early winter.
Corn stalks are also in demand for livestock bedding, mushroom soil composting, and are a potential feedstock for the production of ethanol.
The obvious advantage of utilizing corn stalks is the wide availability. This has created a small, but important market for stalks as a harvested product and as a standing crop in the field.
As with any market a price must be determined. Three general approaches can be used to help us understand the cost items we are confronted with when considering corn stalk marketing and how to set a price. These concepts include:
• What is the value to the purchaser, based on feedstuffs replaced by corn stalks? If we explore the energy, protein and mineral components of feeding corn stalks we estimate roughly $70 worth of purchased feed can be replaced per ton of stalks fed.
• What is the cost to the seller of harvesting the stalks and replacing lost crop nutrients? At least $40 worth of time, equipment, fuel and soil quality is removed from our farm enterprise for every ton of stalks we may market to someone off the farm. This does not account for the soil organic matter available from keeping our corn stalks on the farm, or any off farm transportation.
• What are stalks selling for on the market? Check your local markets as this figure fluctuates widely across location and seasonal demand.
Click here for a detailed spreadsheet highlighting the array of expenses when considering corn stalk marketing.
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