Is Grain Storage Worth It? These Tools Can Help You Decide

October 1, 2015 08:28 AM
 
Is Grain Storage Worth It? These Tools Can Help You Decide

Grain storage is a business decision, not a roll of the dice. To approach it that way, you need to periodically reassess whether the market is offering you a return for the risk you are taking holding inventory, says Carl German, University of Delaware Extension grain marketing specialist.

This Excel spreadsheet allows you to fill in today’s prices and your own basis, interest rates and costs of storage for various time frames to see what offers the best return. Simply fill in the values in Column B for those factors listed in green type.

While storing grain on the farm is a good way to increase marketing flexibility, building grain storage isn’t free. So how long would it take for would-be new storage structures to pay for themselves?

That question prompted Grain Systems, Inc. (GSI) to build a web and mobile tool called the GSI ROI Calculator. Start by selecting your crop and entering your acre numbers plus anticipated yield. Then, you can input monthly elevator storage costs (multiplied by months in storage) plus wait time costs. The results estimate the revenue potential of storing grain on the farm versus sending it to your local elevator.

Seeing these results can help you make a more educated decision about whether or not to add grain storage, says Tim Davis, GSI director of grain sales, east region.

“Most farmers know that adding space is advantageous, but this app helps quantify the benefits,” he says.

The tool is available for free as an iPad or iPhone app, or by visiting http://roicalculator.grainsystems.com.

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Comments

 
Spell Check

Jack
Holly Bluff, MS
10/1/2015 08:56 AM
 

  I am unable to open the spreadsheet. Not sure if its the link or just me. I would olive to take a look at it though.

 
 
geo
Battle creek, MI
10/1/2015 07:47 PM
 

  First time I heard of a "grain condo". Super Idea and wish some around here would offer such a service to farmers.

 
 
jim
Sully, ID
10/1/2015 11:27 AM
 

  Evaluation of on farm storage costs need to take into account all costs of ownership and operation. Labor, utilities, property taxes, repairs, shrink and spoilage, insurance etc. It should also include your cost to own and operate an auger or grain leg to fill the bin. Too often these very real costs are ignored giving a very skewed view of the differences between on-farm and commercial storage. At Key Cooperative we provide Condominium storage for producers at a cost of $1.60 per bushel. The producer owns the bin through an LLC. We pass through the actual costs of operation (5.6 cents) annually. The producer is not charged storage because he owns a part of the bin. Unlimited number of bushels can be moved through the condo annully at no additional charge. Lots of other advantages including the opportunity to sell your interests if storage is no longer needed and no concerns about grade or quality deterioration. My point is when considering farm storage please give an honest look at all the alternatives and then make an informed decision.

 
 

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