Maintain the Grain

Putting grain into storage has always been a common practice, and the need to store grain grows after a season or two of above-average production, right now, for instance. "Grain producers had pretty good harvests the last two or three years," says William Edwards, a retired Iowa State University Extension economist. "There's been more grain and more money."

But it's not just about finding a storage spot for increased yield. There are financial reasons for growers to hold on to some of their grain, rather than selling it all immediately after harvest. Storing grain adds flexibility to marketing.

"The grain market is better in January," says Craig Abell, a Syngenta business development manager. "If you're not locked into the local elevator, you can shop around."

Additionally, a grower who has grain throughout the year may be a more appealing supplier to the expanding ethanol market. "Ethanol producers would rather not store grain on site; they'd rather have it delivered throughout the year," Edwards says. "In order to work with them, producers have to do the storage."

Storage Options

Given all of these factors, it's no surprise that new storage bins are appearing on farms across the country. In fact, there's more on-farm storage today than there ever has been, Abell says. "One reason is harvest efficiency: The elevator might be open from 7:30 to 5, but on the farm, you can unload on your own schedule." There may also be tax benefits to building storage; in many cases, growers can expense the purchase.

But while on-farm storage in a traditional upright storage bin is one possibility for storing grain, it may not be for everyone, says Jeff Spence, grain division manager at Crystal Valley Co-op in Lake Crystal, Minnesota. "If you're looking toward retirement, you might not want to spend the money," he says. "But if you're expanding, you might. The more aggressive growers are out there purchasing acres."

The potential downsides of storage bin ownership include the cost (financing may be available from the Farm Service Agency) and the time needed for maintenance and monitoring.

Another on-farm option is the one-time-use plastic bag. "If you have a big crop, it's a really economical way to have temporary storage, compared to a $250,000 grain bin," Abell says. And for growers who rent acreage, renting on-farm storage space may be possible.

"The grain market is better in January. If you're not locked into the local elevator, you can shop around."

For off-farm storage, investing in condominium storage space or renting storage space built by commercial elevators are two alternatives. Elevators can usually build storage space at a lower per-unit cost than a grower can, and the elevator takes on maintenance duties. "But condo storage offered by commercial elevators has become less popular in the last few years, probably because of ethanol becoming more important," Edwards says. "Farmers don't want grain tied up at an elevator and to be committed to selling to that elevator. They want more flexibility."

Storage Challenges

With all the potential benefits to storing grain, why isn't everyone doing it? The biggest challenge, aside from the cost to build or rent the storage infrastructure, is managing stored grain throughout the winter and spring to minimize spoilage.

"On the farm, you're responsible for it," Edwards says. "Last fall was challenging; it was very wet and the harvest was late. Farmers were faced with decisions about harvesting at high moisture and then drying, or leaving it in the field, waiting for it to dry down and risking the weather turning."

In his Minnesota region, the cold winters can make for good storage conditions, Spence says. "But some people don't look at the grain until the next summer. They use the 'snow method.' If there's snow on the roof, they think the grain's OK. But I say, 'If the bin had $100 bills in it instead of corn or soybeans, you'd be looking at it every day.' You've still got to monitor it and know when to turn the fans on and what moisture to store it at."

Abell compares on-farm storage to having children on the farm. They both require care. "The mechanical things have to be managed; you need to check the grain every 10 to 14 days. You have to service the fan, the dryer, the spreader. It seems basic, but I can't tell you how many situations I've seen where the bin is full of grain and then the dryer won't work."

Ultimately, the best storage option or combination of options for a grower will depend on the relative costs and how each fits into a farm's overall system, which is the most important point to remember, Edwards says. "Don't look at storage in isolation," he says. "Make sure harvesting, storage and transportation all fit together."