South Dakota Farmers Find Shortage of Grain Storage

July 30, 2014 06:57 AM
South Dakota Farmers Find Shortage of Grain Storage

ABERDEEN, S.D.--Rail congestion and large bounties of crops have some worried about grain storage space as South Dakota's harvest gets underway.

Rail cars are in short supply in the northern Plains, and many officials and farmers blame that on increased crude oil and freight shipments from North Dakota's booming oil patch. That means the bins at many grain elevators already are full, and there isn't space to hold this year's large crop.

"Typically, we wouldn't go to ground storage until two to three weeks into harvest," Jeremey Frost, grain merchandiser for CHS Midwest Cooperative in Pierre, told the American News. "Now, two to three days into winter wheat, we're putting wheat on the ground."

This year's large crop after a good growing season isn't helping matters, he said.

"Those who have brought in wheat are seeing yields well above averages at 50, 60, 70 or even over 80 bushels per acre," he said. "We've not heard of anything less than 55. We're used to seeing 40-bushel wheat."

One thing in the elevators' favor is that low market prices mean many farmers aren't anxious to sell. Some like Slade Roseland, of Seneca, plan to store grain in large bags in the field until they're ready to sell.

"We use the grain bags quite a bit, whenever we have storage issues," he said. "It's 24 miles from our farm to the elevator, so we bag crops in field and haul it in later. It's a very efficient process."

However, once farmers do decide to sell this year's grain and whatever they have stored from last year, it could spell trouble.

"One of the big concerns, going into fall harvest, is all of the grain that is still on the farm," said Tom Bright, grain marketing specialist for South Dakota Wheat Growers. "We know customers don't like the prices, but we don't know what (grain from last year) will be coming to us.

"There is the possibility of a double hit — the push of old crop in August and September followed by a big harvest."

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