Evaporating Margins: The Hidden Costs of Wet Corn
Nov 04, 2015
By Mike Preiner, Granular Co-Founder, VP of Product Management
The utility bill for drying corn, regardless of farm size, is a pretty costly one. How expensive? Drying costs vary from farm to farm, but the math is straightforward. It will typically cost between 2.5 and 4.5 cents to dry a bushel of corn by 1 percent, depending on your exact energy costs. For 200-bushels of corn, that comes out to $5 to $9 per acre for each percentage of moisture you need to remove. Typical university budgets for drying costs therefore range between $20 and $40 per acre.
But that’s only one of the issues that comes with harvesting wet corn. Transportation costs are also significant: if you are harvesting corn at 25 percent moisture, you are hauling about 15,000 pounds of water in each truckload. That is money evaporating, quite literally.
Farm operations know the importance of minimizing grain moisture. That’s not a new concept to farmers. But a reminder of the direct impact on profitability is always a good one.
Making sure your entire operation has a better understanding of how this this might affect overall efficiency and profitability is incredibly important. Granular works with one farm whose annual harvest training involves walking employees through the cost of drying, so everyone is reminded of why accurate grain moisture readings matter so much. Once this practice was adopted, everyone understood the urgency of getting the crop out of the field at the right time.
With current commodity prices and the associated margins, the difference between a few moisture points can mean the ability to give field employees a paid day off, or in more dramatic situations, being profitable.
While it is clear that drying is expensive, it is not nearly as clear what can be done to minimize drying costs. We advise our customers to start here:
- Know your harvest capacity and optimize field order: The obvious solution (harvest later) has plenty of associated risks – downed corn is even more expensive than wet corn. Disease potential increases the longer you wait, leaving potential profits on the field. And this list of potential risks goes on.
Granular customers are able to use their historical data to estimate how long it will take them to harvest, so they usually aren’t rushing into the fields too early. Granular helps farmers determine the optimal order of harvesting their fields, taking into account field location, storage capacity, hauling capabilities and elevator location.
- Factor drying costs into seed choice: While a slightly higher-yielding, longer-maturity hybrid may look good on paper, when it comes time to pay your dryer bill, you may not be getting the benefits you thought. Remember that longer-maturing crops can quickly add a lot to your drying bill, depending on when you’re able to get the crop out of the field and the always unpredictable factors that come with Mother Nature.
Use crop growth models to estimate moisture levels: Using a combine or moisture meter to check the grain moisture in a field can be time consuming and expensive. Granular is the only software company that has the ability to provide both field-by-field growth stage estimations during the growing season and moisture estimates after the crop reaches maturity. However, models can never be 100 percent correct, so look for a system that allows you to adjust the model if your field conditions differ from the prediction.
Above shows a sample crop moisture map from Granular depicting northwest Iowa crop moisture levels.
Visit www.granular.ag to learn how Granular can help you manage your drying costs and maximize profitability.