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NE IL | It depends. I farm similar acres and have enough storage for 1/3. Used to rent enough bins to store 2/3. I gave up all but one rented bin this year.
As far as the financials, it works great with 3% interest. I’d forward contract most of it via futures, roll out to July and pick up and .50 between carry and better basis. Throw In a little interest, elevation cost and in my case rental and could make .25 a bushel pretty easy. Now, interest would eat up half the .50. I figured by the time I was doing the extra work for a few cents a bushel. Even if you aren’t paying interest you could definitely be earning it on money you have today.
The other problem is logistics. Guys love to tell how nice it is not to depend on elevators during harvest, which is very true. But no one mentions their own breakdowns slowing harvest down and time spent moving snow and getting equipment started to unload. Time is precious during harvest but is worth something the rest of year as well.
I like storage but I haven’t been able to out a pencil to adding any and logistically I like where I’m at. I can still be productive when elevators are closed but have cash coming in at harvest. Another thing that may be in your favor is that if you’re starting from scratch you will have (hopefully) a facility with all storage in one place. I have bins kinda scattered out and it makes it a little bit of a pain this time of year when you want to core bins. | |
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How important is grain storage for a farm? Payback?
