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| Hey Coup-
The way I read the discount schedule, 30% corn would be 6 cents per 1/2 point. 15 points of moisture x $.12 = $1.80 per bushel. (I don't know if it is graduated)
If you were storing the corn, they would likely bring it to 14%, making things even worse.
It doesn't matter what price the corn is marketed at, so the $4 per bushel value is irrelevant. It's simply cost per bushel.
You bring in 1 bushel of 30% corn, they shrink it automatically to 1 - (.014 x 15) = .79 bushels of dry corn. No elevators use the actual 1.2 shrink coefficient.
So, to figure out what they are actually charging for "shrink," simply take 21% of the $1.80 charge. You are getting 79% of the corn, so 21% of the charge is going to shrink.
($1.80 x .21 = $.378)
This means they are charging $1.80 - $.378 = $1.422 to dry the corn. This equates to almost 9.5 cents per bushel to dry. This value would be less for dryer corn, but most of the corn in this area will come out around 30%. We just put up a new system, so I won't know what our (per bushel) price will be for quite some time, but it better be a lot less than 9.5 cents per point (not to mention that our shrink will only be 1.2% per point).
As you said "dryer would more than pay for itself this year on most farms."
Is there a flaw in my thinking?
Edited by Illinoisfan 10/27/2009 21:51
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ADM changing discount schedule: More of this to come?
