Storage issues as acreage expands
By Delta Farm Press
A tendency in the US towards increasing on-farm storage, particularly for corn, has created some interesting trends in building, in pricing and in the management of costs, to take the greatest advantage of relatively higher commodity prices, according to this report from Delta Farm Press
December 17, 2008
In response to the ethanol industry, US corn acreage has jumped. Currently, some 25 percent of the US corn crop is being processed into ethanol. Since so much corn was needed for ethanol, where did the extra corn acreage come from?
“It came, generally, at the expense of soybeans and wheat,” said Jeffrey Berg at the recent American Society of Farm Managers and Rural Appraisers annual meeting in San Antonio. Berg, who has helmed Minnesota-based agriculture appraisal company Crown Appraisals, Inc., for the last 15 years, pointed out soybeans and wheat “yield, say, 50 bushels per acre.”
The same acres, growing corn, “yield 150 to 200 bushels per acre.” That means a net storage deficit of approximately 1.5 billion bushels.
As a result, farmers and elevators have been building storage “like crazy” for the last four or five years. When Berg travels to Midwest trade dealer shows in the winter and talks to exhibitors, “I’m hearing incredible stories. They can’t get enough manpower, are bringing in labor from Mexico — all kinds of creative things to get this storage built.
“It’s interesting that for a lot of the concrete elevators, crews of Hispanic workers do nothing but slip-form the elevators. They work 24-7, specialize in pouring concrete for a week and then go to the next job.”
A new concrete annex, “a big 500,000-bushel tube, will cost in the neighborhood of $5 -a very rough number depending on how they’re equipped, aeration, etc -per bushel. Steel will cost about $3.50 or $4. Concrete is still considerably more expensive.”
Flat storage can be built for $1.25 to $1.50 per bushel.
Berg sees a lot of tent storage going up with “agri-lime or asphalt as a base. Then, there is a two million-bushel pile with a tent, or hoop roof, over it.”
To see the remainder of this story, go to: deltafarmpress.com/corn/grain-storage-1212/?smte=wr