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On-farm storage a growing potential for growers

In the face of rising costs and increased opportunities for marketing, more farmers are weighing the option of building or increasing the size of on-farm grain storage facilities.


September 17, 2009
By Blair Andrews

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In the face of rising costs and increased opportunities for marketing, more farmers are weighing the option of building or increasing the size of on-farm grain storage facilities.

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Location is important but ease of flow means less handling of grain, thereby maintaining its quality.  
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On-farm storage also gives farmers more choices for selling their grain.
Photos courtesy of Helmut Spieser, OMAFRA.


 

Although economic uncertainty and a drop in grain prices cooled the interest somewhat early in 2009, Bill McIntyre, sales and service with Melbourne Farm Automation Ltd., says sales were strong in the previous two years. He says reducing the rising costs of grain drying and handling was a key motivator. “Drying charges are typically half of what they are at a commercial elevator. But to make a fair comparison, you have to take into consideration the cost of investment, plus the time and management that is involved to dry or handle your own grain.

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However, keep in mind those savings are going back into your pocket.” Depending on the moisture of the grain, McIntyre notes that, based on customer feedback, the fuel costs of drying grain at the farm will range between 10 to 18 cents per bushel (not counting the cost of your investment), whereas commercial elevator costs run in the range of 40 to 60 cents.

McIntyre says on-farm storage also gives farmers more choices for selling their grain. “On-farm drying and storage also gives farmers more flexibility in marketing the crop. It gives you more avenues if you’ve got it at home, including the feed trade and commercial buyers. And you usually get a premium.”

McIntyre adds that a move by commercial elevator companies to close locations in some areas has also caused farmers to think about building their own facilities. As for whether to go ahead with building or expanding on-farm storage, McIntyre recommends that farmers weigh several factors, including the costs of their current expenditures versus the cost of the project. Cost considerations include capital, depreciation, insurance, maintenance, elevation of the grain in, elevation out, labour, profit margin, fuel and electricity. “Do you have the time to handle the grain yourself? What are you going to put through for capacity? Weigh that cost against other services in your area. Weigh your opportunities for marketing. You’ve got the grain sitting at home and you’re not paying monthly storage fees, hoping that the price will go up.” As a general rule of thumb, McIntyre says a bin or dryer will pay for itself in three to five years.

Several main considerations
Whether improved grain prices or the need to manage energy costs renews farmers’ interest in on-farm storage in the future, there are some design features that could be considered now to ensure an effective and efficient system. Of utmost importance is the layout. McIntyre says the configuration should allow for easy expansion in the future without hampering the other activities of the farm operation. “If you’re buying a dryer, don’t size the dryer for what your operation is right now. Size your dryer for what you think the potential size of your operation will be in five years.”

Agricultural engineer Ralph Winfield agrees. It is a point that the Belmont, Ontario, farmer stressed in the 2009 Grain Dryer and Storage Workshops that were organized by Ontario Ministry of Agriculture, Food and Rural Affairs engineer Helmut Spieser. Winfield says farmers should ask themselves if the location will give the grain-handling system room to grow in the future. “Location is very important: once you place the first bin, you are committed to that location.”

McIntyre cautions against planning for too much, reminding people to make their forecasts as realistic as possible. Simplicity is also preferable. “As far as how grain gets into and out of the system, make it flow easily. The less that you can handle that grain, the better you can maintain the quality of it,” adds McIntyre.

Winfield says the plan should also provide for an elevator leg. He concedes that this provision may not be included in the first draft of the design, but Winfield suggests that an elevator leg will become an important consideration. “I know when you start out, you use a portable auger. But most people get tired of using portable augers after three or four years. Then the question is “where do I put the leg?”

Other key questions include:

  • Is there adequate electrical and natural gas service at the site?
  • Is drainage adequate for the receiving pit?
  • Is there potential for neighbours to complain about the noise from fans and moving grain?

Winfield says the last point could influence the choice of the dryer fan for the operation, adding that an axial fan will be noisier than the centrifugal type.

Perhaps the second most important consideration for on-farm storage is accessibility. Transport trucks should be able to manoeuvre around the facility with ease, and they should have all-season access on the site. “When the buyer comes to get (the grain), they’re going to come at their convenience, and they will want to bring that truck in off the road,” says Winfield.

While Winfield discussed guidelines for layout at the session, Helmut Spieser added that truckers appreciate designs that make their job easier. “They’re in the business of trucking; not manoeuvring things. So we want a road that will support them.”

Spieser offers the following guidelines to help improve traffic flow around the on-farm grain storage facilities:

Driveway entrances:

  • Should be a minimum of 50 to 60 feet wide at the road to allow easy access into the site and to get the truck and trailer(s) off the road quickly and safely.
  • Should be marked as a “truck entrance,” if the farm has multiple driveways.
  • Should be free of any visual obstructions to approaching traffic in both directions.

Driveways:

  • All weather construction, elevated two to three feet above bottom of ditches.
  • Properly constructed with excavation of virgin material, geotextile fabric, two-inch coarse stone topped with “A”gravel, graded and compacted.
  • Surface graded to shed water.
  • A minimum of 20 to 25 feet wide.
  • Manoeuvring aprons should be at least 150 feet long to allow the lining up of tractor trailers to dump pits, load-out bins or platform scales.
  • Turns should have a minimum turning radius of 46 feet (14 metres) to allow for easy turning.
  • Site driveways so that guy wires and guy wire support posts do not cause a snagging hazard to wagons and trucks.

Overhead load-out bins: 

  • Minimum 14-foot clearance between support legs.
  • At least 14-foot clearance below the overhead bin support structure.
  • Locate roads so truck’s load is facing the road.
  • Position slide gate controls on the driver’s side of the truck to allow easy signalling of truck driver.
  • Avoid any spouts hanging above the driveway that could get damaged by dumping trailers.


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