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Central Minnesota | We already had storage on farm for 140,000 bushels.
Priced things out from 5 different millwrights. Everyone was competitive. Except one was cheaper by quite a bit. We saved money in alot of areas. I did alot of the transition work myself. The pit was built by a local welding shop at a fraction of the cost. Concrete work was done by a friend. I went with a stepdeck and picked up legs in iowa, and also picked up other things for the millwright, so i saved on freight. We assembled the tower sections, and alot of the legs ourselves. Cone bottom was built by a welding shop, so didn't cost near what buying one from bin manufacturer would have cost. If you can do alot of the work yourself, you can save alot of money. Sure, we didn't get to go to the lake that summer, or any vacations. But we sure saved alot of money on construction costs. And got what we felt we needed for the long term.
Bin cost should always be associated with your marketing plan. In our "area" basis is a big part of the marketing plan/cash flow/balance sheet. I was delivering corn that was over 4.00 cash this year. And will be again next year.
Selling at a 4.09 futures level "here" is the same as in iowa, illinois or anywhere else. But the basis can be terrible here. -.55 in fall. If you delivered that in the fall, that's 3.54 cash corn. With COP for some people in the 3.20-3.40 range, that doesn't leave much meat on the bone. So here we take advantage of bin space to make a huge difference. Roll that 4.09 futures sale. Put a .25-.30 offer in, to roll that over to a june/july timeframe of the following year. Now it's a 4.34 futures sale. Then take a summer basis of -.22 to -.28 and that sale you just had was over 4.00 cash. That bin just made you .40/bushel. And you just paid for 30-40% of the cost of that bin in one year. Or you made your bin payment, and still showed a decent profit after all costs associated with it. After 3 years, your showing a big profit on adding that bin space. | |
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grain set up questions.
