This article is the second of a two-part series exploring many of the advantages on-farm grain storage provides:
Part 1: Why Store Grain? Grain Storage: Driver of Financial Success
Grain Storage Promotes Efficient Operations
As discussed in Part 1: Why Store Grain?, building capacity for on-farm storage offers producers several direct ways to improve their return when marketing grain or beans. But it can also streamline operations, cut costs, minimize field loss, help improve and preserve the quality of the grain and enable the operation to grow identity-preserved crops. Each of these benefits can lead to a demonstrable financial advantage with the added bonus of establishing more control over harvesting and marketing processes.
Rob Huston, Director of Customer Interfaces, Solutions and Services at Bunge, points out one other important factor in deciding to construct on-farm storage: “The additional control over operations you derive from on-farm grain storage can play a large role in risk management for your operation.”
Storage Leads to an Efficient Harvest
The all-to-familiar cliché “Time is money” could not ring truer than for farmers during harvest. Delays stemming from weather, transportation time or equipment availability translate to losses in the field or added costs.
Furthermore, the ideal window for harvesting cash crops in some years may overlap or conflict with the timeline for other important operational activities. At the other end of the line, the local elevator may only accept grains during certain hours or force trucks to wait in queue, causing undesired down-time in the field.
“There is nothing worse than downtime during great harvest weather. You can spend countless hours performing preventive maintenance on equipment, hoping to limit breakdowns, but if you are hauling your grain to the local elevator, your harvest is also dependent on their operations. Any slow down at the elevator causes a need for additional trucks or wait time in the field and slows harvest progress.,” says Bill Jansen, North America Crush Value Chain Finance Partner. “If you can haul to your own storage bins, they’re likely within close proximity, cutting down the number of trucks, drivers and fuel required. This keeps your combine running, making the most of prime harvest days.”
Efficiency Reduces Field Loss
A year with ideal weather may allow grain to stand extra time in the field and prolong harvesting windows, giving growers more flexibility in their harvest timelines. Even in the good years, however, many factors work against quality and yield at harvest — frost, wildlife feeding, wind gusts, stalk deterioration, pests, and fungus all can whittle away at a standing crop.
The common denominator in reducing the effects of field loss lies in harvesting at the optimal time, thereby limiting the opportunity for those detrimental factors to affect yield. “On-farm grain storage enables producers to harvest on the schedule that best matches their needs, because it is always there and ready when the crop matures,” says Huston. “That constant availability helps a farmer minimize risks associated with harvest.”
Investment in Quality
Inclement weather or mechanical breakdowns create delays that can force harvesting in less-then-ideal conditions. But even in good years, grain may come in a few points off from perfect. On-farm storage allows growers to sidestep related discounts at sale.
“Commercial elevators have two moisture issues to consider when buying grain,” says Huston. “The first relates to safety and quality: In a confined space, grain containing too much moisture heats up, potentially damaging the stored grain and also putting the elevator itself at risk.” Furthermore, elevators don’t want to pay producers for excess water weight that they have to sink time and money into removing. “When commercial elevators get the grain down to appropriate moisture levels for storage, they won’t be selling as much weight as you sold them,” he continues. “So they may charge for shrink in addition to drying charges, and these discounts can quickly eat away at your profits.”
On-farm storage gives producers the time and facilities needed to remove excess moisture from their grain. Employing fans to drive air through the grain or heat-based drying equipment can bring grain inside storage bins down to the proper moisture content for sale or safe storage. “Grain in the right moisture content range moves your crops to the top of the quality-factors schedule, where you’ll get the best return for your grain,” Huston says. “On-farm storage can help you get there.”
Identity Preservation
Producers can also make operations more efficient, from a revenue perspective, through contracting to grow identity-preserved crops. “To deliver identity preserved crops, producers must have the storage available to segregate the grain after harvest to ensure it does not co-mingle with other grains,” advises Huston.
A farmer may grow these crops from a particular seed, such as non-GMO or high-oleic content varieties or the contract may require cultivation under particular conditions, such as organics. “In identity-preserved contracts, the buyer pays a premium for growing a particular grain and for storing it in isolation from the rest of your crops,” he says. The buyers of these crops may even employ farm-to-table transparency that pinpoints the precise farm and field it was grown in to inform consumers or regulators, and then traces its pathway through processing or manufacturing all the way to packaging and distribution.
“Without on-farm storage, this opportunity doesn’t exist for a producer,” says Huston.
Dealing with the unpredictability of nature lies at the heart of any farming operation. “On-farm storage provides an additional tool that can create efficiencies, lower costs and improve revenue,” summarizes Huston. “All while contributing to better risk management and greater opportunity.”