In 2018, the U.S. Department of Agriculture (USDA) reported that Iowa had enough storage for 3.6 billion bushels of grain. 2.1 billion of those bushels were stored in what is called “on-farm storage.” That means farmers are drying and storing the grain they
harvest in personal storage bins, not at a co-op. You can read about co-op storage here. You might be wondering what the difference is, or why farmers would want their own storage. Good questions!
Personal grain storage is different than a grain elevator or co-op in several ways. First of all, location. An ideal location for a grain elevator would be in a rural area with a lot of farmland very close so that farmers don’t need to haul freshly-harvested grain many miles to get it dried and stored. An ideal elevator is also located near a railroad or waterway, like the Mississippi River, so the transport of grain from the elevator could happen efficiently, rather than having to haul the grain again.
Location is also very important to farmers when they decide to build on-farm grain storage. In order to use their on-farm storage most efficiently, they need to build in an area that is close to several of the fields they farm, if possible. Smaller grain storage facilities could be used for just one or two fields, but many modern grain storage facilities are being built to hold several fields worth of grain. Building in close proximity to several of their fields allows farmers to save time during harvest. During harvest, a combine usually dumps grain into a grain cart, which then dumps it into a semi to take to a grain storage facility. If the semi is having to haul grain a distance, it can slow down the process if the combine and grain cart are both full before the semi can get back.
Farmers build their own on-farm grain storage for several reasons; this blog post will highlight three of them.
This is the big one! Marketing is incredibly important to farmers, as it can allow them to get higher prices for their crops. Instead of hauling the grain into the elevator or co-op right away, farmers can choose to wait to sell their grain if they think they can get a higher price later on. “You can delay sales three to six months into the future and be paid well for your patience ($0.20 – $0.40 per bushel)”- Hertz Blog. This gives farmers the opportunity to make more money each year for their crop, if they market it well. For more information on how farmers market their crops, check this blog out.
On our family farm, our large on-farm grain storage site is three miles or less from the majority of our fields. That is four miles closer than the nearest co-op, and that distance does make a difference in how fast we are able to harvest. There’s never a line at our on-farm storage site of other trucks trying to deliver corn. Our site also does not close down at a certain time. Co-ops are not always staffed to operate the facilities all night, but many farmers need to work late into the night to get all of their crops in, especially during years when harvesting conditions haven’t been ideal. It can sometimes feel like a race to get a crop in before snow comes, especially in Iowa when severe weather often happens very unexpectedly! By using on-farm storage, the race to get a crop in can be lessened.
When corn is ready to be harvested, it has 15-25% moisture. If the moisture is more than 15%, it must be dried before it can be stored. That is where a corn dryer comes in. This is essential for grain storage if a farmer is harvesting corn that is even a little bit wet, as wet corn can get moldy when stored. Co-ops have grain dryers, but if a farmer is using on-farm storage, it is cheaper for farmers to dry their own corn. There are many different kinds of grain dryers, but an estimate of an initial cost for one would be around $100,000. Prices can definitely go up from there. The initial investment is a significant one, but when used over many years, the return on investment (ROI) proves it to be a worthy investment. The other option that farmers have is drying their corn at a co-op before storing it there. This costs more for farmers, but comes with the convenience of not having to buy a corn dryer. Here is a comparison of on-farm drying vs commercial drying.
On-farm storage allows for the United States to produce more corn than we use here. We are able to use corn that is stored across the country to export to other countries. According to the National Corn Grower’s website, “Exports are responsible for 33 percent of U.S. corn farmers’ income. More than 20 percent of the U.S. corn crop is exported annually when accounting for corn and value-added products like ethanol and distillers dried grains with solubles (DDGS).” If we did not have on-farm storage, the corn crop would not be able to be stored and exported throughout the year without significant changes in our co-ops.
Unfortunately, on August 10, 2020, Iowa lost a significant amount of grain storage in the derecho. Straight line winds, some reaching estimated speeds of 140 mph, crumpled many bins. Co-ops and on-farm storage units both suffered in the storm. Corn was also flattened in the storm. The USDA’s Risk Management Agency estimated that 8.2 million acres of corn were impacted by the storm. Some of that corn will not be able to be harvested, so the demand for grain storage may go down some. Many farmers will be turning to alternative methods to get their crops out of the fields and try to make some money, and Iowa grain storage construction companies will be busier than ever before. No matter what, it will be important for farmers to rebuild their on-farm storage grain bins as quickly as possible to be ready for next year’s harvest.