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Alton, Ia | You are somewhat correct about the 7 cents. In my personal situation, I would use a higher interest rate than 5%, since I have short term operating loans at a higher rate. I use the highest rate I am paying on a note when I figure my cost of storage. If you are debt free, then you should use your savings rate. (or loan me the money!) You'll also have direct costs if storing such as tractor and auger wear, fuel, etc. to fill, electricity for fans, electric for loadout augers, etc. Then you'll have management time, checking the grain once a month or so, more in summer. And risk. If it goes bad before delivery, your problem.
7 cents to me is barely enough to make it worthwhile. Some extension people estimated 8 c to load and unload from storage, I think that's high for us, but maybe a good average. But I don't think I'd do it for 20 c total. It's amazing to me what corn going from < $2 to almost 4 has done to the cost of carry. Between interest and storage risk, we need more to want to store. | |
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Am I missing something here on corn storage ??
