Grain storage is a top priority for many Upper Midwest crop farmers, given that more of the crop will be held on the farm this season.
“Over the past year, low commodity prices have caused some farmers to hold over more grain than in previous years,” says Sara Bauder, Extension agronomy field specialist with South Dakota State University. “In addition, according to some experts, the current tariff situation may affect grain markets into growing season 2019.”
These issues, plus the potential for high yields, the need for harvest efficiency, and commercial storage limitations and fees may cause some significant storage issues. Current commercial storage rates vary from 5 cents to 7 cents per bushel per month.
“There are a few storage options available to farmers, but the main priority is a facility that is safe, keeps grain dry, and has aeration for temperature control,” Bauder says.
To pencil out what the best storage option is, Jack Davis, SDSU crop business management field specialist, suggests producers compare storage rates with their on-farm storage costs, including costs related to interest, shrink, handling and drying.
“Returns to storage can be captured by selling the crop for later delivery at a price that exceeds the spot cash price plus the cost of owning and storing the crop,” Davis adds.
Farmers can accomplish this by using a forward cash contract, selling deferred futures contracts or storing the crop unpriced in anticipation of higher cash prices, he says.
A forward cash contract eliminates all uncertainty about the return to storage, Davis says. Forward pricing eliminates downside price risk but also eliminates a return from higher price levels. If you sell a deferred futures contract to price the stored crop, the basis levels will still have to be set, which can impact the actual return to storage. And if you store a crop unpriced, this offers the chance to capture higher prices, but provides no protection from lower prices.
Alternative storage options
If crop producers are determined to store more grain on the farm than they have traditional storage space for, there are a few options. Ken Hellevang, a regional grain storage expert for North Dakota State University Extension, offers some tips when using older grain bins and grain piles.
“In a pinch, some farmers may attempt using old bins that have been out of service for many years. This can be done, but safety and functionality are key,” Hellevang says.
Consider these points when using an older bin:
• Not all bins have perforated floors. However, they may include in-floor aeration. If no aeration exists in bins that hold more than 3,000 bushels, aeration tubes should be added for temperature control in long-term storage situations.
• Fan covers and proper aeration of bin roofs (e.g. roof vents) are often overlooked. Yet they are considered highly useful tools in keeping grain cool for long periods of time.
• Check old bins for structural integrity and tight seals — especially between the floor and base of the walls.
• Sanitize old bins.
Large grain piles are another storage option. These are commonly seen at grain elevators and cooperatives. They can be a short-term solution to a grain storage issue. However, open piles are completely vulnerable to moisture damage, Hellevang says.
Although many believe that wind blowing on an open pile can aerate it, this is simply not the case. A 1-inch rain can increase a 1-foot layer of corn by 9% moisture. Covers are available for grain piles that can help shield grain from the elements and direct drainage away from the pile.
In addition, aeration systems can be added to piles.
Sometimes producers have to weigh the cost of spoiled grain against the cost of a cover and aeration system based upon intended length of storage, Hellevang says.
If you are planning to store grain on the ground, first prepare the ground surface with a substance that has low permeability (lime, asphalt, cement) and add a crown for proper water drainage.
Consider locating piles away from possible flood areas and near electricity if aeration will be used. Grain placed in piles should be dry to control temperature. Ideally, corn should be at 13% to 14% and soybeans at 11% to 12% moisture.
Storing dry grain in bags is another option. Corn and soybeans should be put in bags at the same level of moisture as stated for ground piles. Poly bags do not stop insect infestations, mold growth or heating, so it’s important that grain is properly dried before using bags.
Placing bags in a north-to-south orientation can help reduce moisture issues and keep heat more even throughout the day. If heating within the bag occurs, this type of storage does not allow for controlled aeration.
For more information on grain storage options, visit NDSU’s Grain Drying and Storage website.
Source: South Dakota State University Extension