Grain setup keeps pace with farm needs
Twelve grain bins with a total storage capacity of 650,000 bu. form the nucleus of Mike and Matt Allyn’s grain handling system on their southern Indiana farm near Mount Vernon.
That’s a lot of storage capacity by nearly any farmer’s standards.
Just this year, the twin brothers increased their grain handling system by nearly 50% when they added a single new bin that holds 200,000 bu.
"When we ran a capital budget model on it, it was a no-brainer," Mike says.
Harvest flexibility. More storage means the Allyns have more control over when they deliver corn to the elevator, allowing them to take advantage of a favorable basis. They also now have the option to deliver corn to one of two new ethanol plants that are within three miles of their farm.
The Allyns grow 10 different corn hybrids in any given year, and they plant each one in blocks to make harvest a smoother process. Increased storage capacity gives the brothers more harvest flexibility, enabling them to start earlier or finish later in the season, depending on the development of their crops field-by-field. They estimate their average harvesttime is 35 days from beginning to end.
Since 1993, when Farm Journal first learned about the Allyns’ grain handling system, the family has retooled or modified the system at least six different times to accommodate their
expanding farming operation.
During those times, collectively, the Allyns tore down four bins and built six new ones. They added a new drive-over dump, an overhead load-out bin, a new leg to reclaim grain, a large-capacity dryer and two wet holding bins, one that holds 10,500 bu. and another that holds 7,000 bu. The two wet holding bins enable the brothers to load hybrids with different moisture levels in separate bins.
"When one bin is cleaning out, we’ll start putting another hybrid in the other bin," Matt says.
When the large-capacity dryer was purchased in the early 1990s, it could handle twice the amount of grain that they needed to dry at the time.
"We bought the dryer thinking we’d need to have that capacity in the future," Matt says.
Ten-plus years later, the brothers are evaluating the purchase of an even larger dryer.
A master plan. The ability to evaluate and plan for the future is what separates the Allyn family from many other farmers with similar operations, contends Gary Sorgius, grain handling consultant for Ripco Ltd., Otwell, Ind.
|In the near future, Mike and Matt Allyn plan to automate their grain system. PHOTO: Rhonda Brooks
"They’re able to envision what they want to have happen in the scope of their operation five years and 10 years down the road," Sorgius notes.
He says the Allyn twins’ dad, David, has had a long-term plan in place for their grain handling system since the 1970s, when the family had only two 7,000-bu. bins.
He adds that other farmer customers are beginning to evaluate their grain handling systems with a similar, long-term view.
"For years, guys would put up a grain bin and they’d say, ‘This will be the last bin I’ll ever need,’" Sorgius notes. "Most guys don’t make that statement anymore. The ones who look at their operation as a legitimate and professional business have a vision, which helps them make better decisions and fewer mistakes."
That last statement is the main point Sorgius says he wants farmers to grasp.
"Your plans don’t have to be precise, but you do need to be forward-thinking," says Sorgius, who has managed the Allyn family’s grain handling expansions since the 1970s.
He references the new bin the Allyn family installed this year as one example. Sorgius and the Allyns agreed on a specific location for the bin six years ago. At the time, they projected the bin would hold 125,000 bu. Instead, it can store 200,000 bu.
"The important thing was that they saved that specific spot for a big tank; it just ended up being bigger than we’d originally anticipated," Sorgius says.
Design details. The location and placement of the new big-bushel bin were critical factors for the Allyns.
"Gary says the real estate closest to the grain leg has the highest value," Mike notes.
Sorgius explains: "Because the bucket elevator is core to a well-functioning bin system, you want to maximize the size of the tanks around it in order to fill or unload the bins with as little time and wear and tear on the crop as possible," he says.
Too often, he says, farmers tend to stair-step their system by building larger bins behind smaller ones. That tends to cause problems.
"When you have to use a couple of conveyors and more mechanical equipment to carry grain to a bin out behind another bin, you have more maintenance management challenges and grain damage," Sorgius explains.
Farmers interested in retooling their bin system need to analyze their growth during the past several years as well as their plans for the future, Sorgius advises. Those who want to expand acreage or add another person to the operation probably need to evaluate their current system.
"If they produce an average of 3 bu. more per acre per year, that’s 30 bu. more per acre within a decade," Sorgius says. "Multiply that over 1,000 acres, and that’s a lot more grain to manage. That additional volume puts stress on existing systems and signals that a change is in order."
|A 13,000-gal. tank, which the Allyns purchased six years ago, supplies fuel for their 650,000-bu. grain handling system. PHOTO: Rhonda Brooks
Along with a higher volume of grain to handle, there are other considerations, such as power sources and evaluating road access to the bin system.
"Establish things in phases as they make sense, and start with whatever is your weakest link," Sorgius says.
Sorgius notes that the bin-system projects he manages cost an average of $200,000 on the low end and can exceed $1 million on the high end.
He adds that the cost of an individual bin decreases as the size in which it is constructed increases.
"A 50,000-bu. bin costs less than $2 per bushel to construct, while a 500,000-bu. bin costs less than $1.50 per bushel to construct," he says. "The bins that we’re constructing now are typically
between 100,000 bu. and 200,000 bu."
Financing options are available, says William Edwards, Iowa State University Extension economist. "Low-cost financing for storage structures is available from the Farm Service Agency. The initial investment is eligible for Section 179 income tax expensing in the year placed in service, within IRS limits," he says.
As for the Allyns, they believe their next bin system update will be to adopt the use of automation. Automated bins typically include a variety of temperature and moisture sensors to help farmers monitor and maintain grain quality for a longer period of time. The brothers say they believe an automated system would pay for itself within three to five years, based on grain quality improvements alone.
Allyn Grain System through the Decades
(click to download larger image)
- September 2011