Storing grain on the farm gives farmers more harvest and marketing flexibility than transporting it from the field directly to the grain elevator. For the past several years, Kentucky farmers have been adding to their on-farm storage to take advantage of this added flexibility.
“From what I've seen, there are a few completely new systems, but for the most part it's been a bigger bin or two added to an existing facility,” said Sam McNeill, Extension agricultural engineer with the University of Kentucky College of Agriculture.
Kentucky farmers increased on-farm storage capacity by 5 million bushels in 2007, bringing the total storage capacity to 180 million bushels, according to the Kentucky field office of the National Agricultural Statistics Service.
Adding storage means not having to wait in line at the elevators, not needing as many trucks in the fleet and having the flexibility of holding and moving grain at more convenient times when pricing may be more favorable compared to harvest-time prices.
Ethanol production may also be playing a role in added grain storage nationwide, McNeill said. Many of the ethanol plants do not have the storage capacity on site for more than a few weeks' production capacity. That's putting the storage responsibility on the farmer, he said.
High grain prices may also be allowing some farmers to financially afford to update or expand their storage capacity. However, with the high cost of grain production and metal, farmers need to do a cost analysis.
It generally costs between $1.50 and $2 a bushel to put up a bin, he said. Farmers must also consider interest, energy for drying and/or aeration, labor, maintenance and other annual expenses.
Most new bins are larger than they used to be. That's due in part to farmers continuing to farm more acres. Additionally with today's large harvesting equipment, the larger bins are more efficient. Farmers do not have to move from bin to bin as often.
“There's more convenience with bigger bins, but there are more challenges too,” McNeill said.
Challenges include managing the different moisture levels from field to field and differing amounts of debris within the fields. Farmers also need to remember not to hold grain in the bin's roof cone very long because this can make proper air flow difficult and potentially reduce grain quality.
McNeill said generally he gets calls around harvest time from producers saying pricing options show they need to store corn, but they don't have enough storage space. Farmers can put up bins in late summer (and save on interest costs), but they can get the biggest discount on bin construction right after harvest; so there are trade-offs to consider for each operation. Of course, there's still plenty of time to add storage for this year's crop, but it's important to plan for potential expansion before pouring concrete.
McNeill said he expects farmers to continue to add storage in 2008, but perhaps at a slower pace.