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Find a home for corn By Katie Allen
Record acreage and a good growing season will push harvest logistics this year.
An expected record corn harvest this fall could generate great profitability for U.S. growers and grain handlers. The obvious driving force behind the need for more corn is ethanol and farmers’ expectations for higher corn prices due to increased demand. Bottom line: we need more corn.
But as farmers convert soybean, wheat and CRP pastures into cornfields to fix one problem, the heavier crop has brought storage bins to capacity, leaving farmers wondering how to handle it.
The grain estimates for the upcoming harvest explain it all. According to Robert Wisner, Iowa State agricultural economist, corn production will be up 16 to 17 percent from last year. Taking into account a reduction in last year's carry-over stock, total corn supply should be 4.5 to 5.5 percent greater in 2007, given reasonably good summer weather.
The overall soybean supply will likely be down 3.5 to 4.5 percent from last year, with production down 10 percent. Wisner said as all the grain moves into the marketing system this fall, the combination of soybeans and corn will be 10 to 12 percent more than last year, indicating a major handling challenge for grain this year and, in fact, for the next several years.
It’s got to move
Ranges in the estimates show a fluctuation in how this year's corn crop could fare. Good summer weather along with harvest times and time of shipment to elevators will determine the severity of grain storage issues.
“If we have a normal or better crop, on-farm space is going to be very tight,” said Roger Caffrey, grain specialist for MFA Incorporated.
Paul Bertels, director of biotechnology and economic analysis with the National Corn Growers Association, said the United States should expect about 2 billion bushels more corn this year. He said March planting estimates from the USDA show an expected 12.5 billion bushel crop, not including carry-over corn.
“With a 13.2 billion bushel supply in 2005 and 2006, farmers can remember what it was like trying to find storage,” Bertels said.
The biggest pressure for corn storage will be in the eastern Corn Belt, where reasonably dry and mild weather gave the crop a stronger start, Wisner said. Minnesota and northern Iowa, areas that did not have the extreme wet weather of southern Iowa and northern Missouri this spring and early summer, are apt to need more storage during early harvest time.
Wisner said ideal summer weather might offset the disadvantage of late planting and re-planting in areas with more spring rain. While the wet weather caused problems early on, it may help relieve storage pressure and transportation to and from the elevators.
“If the harvest is strung out, it relieves the congestion,” Caffrey said.
Caffrey added that most wheat will be moved out of the grain bins before corn harvest and provide some room for storage. But farmers will use just about anything for grain storage in a crunch.
“Farmers can put grain into machine sheds if they need to,” he said. “Places get used that don’t traditionally hold grain.”
Rick Hilgedick farms nearly 1,500 acres in Boone County, Mo., near Hartsburg, with his father, Wayne and brother, Terry. Of those acres, 700 are in corn. Hilgedick said he has used pole barns to store corn in the past, reinforcing the walls with cables and plywood, when the bins fill up. Depending on the yield, Hilgedick may have to use the barns again this year if storage and time are tight.
“Lines at the elevator get pretty long at harvest time,” Hilgedick said. “That’s never a good place to be when you can be in the field.”
POET Biorefining, an ethanol plant in Laddonia, Mo., is in the process of putting up three additional grain bins for more storage this fall. Robin Venn, general manager of the plant, said the new storage will provide room for 1.5 million bushels of corn, bringing total storage capacity to about 2.45 million bushels.
“We’re building storage so when farmers want to sell, they can bring it here,” Venn said. “As an ethanol plant, we have to have corn.”
But temporary storage may be necessary if the corn is contracted for ethanol and cannot all go to the ethanol plant at one time.
Storage build-up
“All corn has to go into storage somewhere if it’s for ethanol,” said Ken Knuppel, general manager for Grain Bin Supply Company LLC in Cairo, Mo.
Knuppel, who sells Sukup grain bins, has worked in the grain storage business for 14 years. He said business has been good over the past couple of years, mainly due to increased corn volume for ethanol.
Additionally, the increased size and scale of the farm has brought on more centralized storage units, Knuppel said. Where 30 or more bins once were scattered over several farms, larger storage units now reside on a fewer single locations.
New bins needed to be ordered by June or July 1 at the latest to have the materials and labor complete for fall. Knuppel recommends farmers take advantage of winter discounts to save money on new grain bins. He said farmers often don’t use the winter discounts, with concerns that they’re not going to have a crop the next year.
“That can happen, and it’s not good when it works out that way,” Knuppel said. “A grain bin is a long-term investment that is not going to go away, but with the foreseeable future of ethanol, the demand is here to stay.”
Grain bins are a big investment but can provide good returns, Hilgedick said. “We’ve added new bins over the past few years to have more capacity for corn.”
Knuppel said the winter discounts on bins often last into mid-springtime.
Wisner said it’s important for farmers to monitor their crops throughout the summer and contract their crop fairly early.
“At the end of the summer, most contractors are heavily committed,” he said.
In making grain storage investments on the farm, Wisner said it’s important to think of long-term farm goals. Decide the importance of investing in storage for rented land, find the best location for storage units and ask local Farm Service Agency offices about low-interest loans to purchase new storage facilities.Click here to respond to an article Top of page
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