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Farmers weigh grain-hauling options

Agriculture.com Staff 11/06/2008 @ 10:49am

Hauling grain is a balancing act. Is it best to go just down the road and take what you can get locally, price-wise? Or, should you get on the road and haul to more distant locations if it means a higher price for your grain?

You can calculate whether it's worth it by looking at market prices, figuring trucking costs and distances traveled. But, what works doesn't always necessarily fall in line with the numbers, farmers say. Cashing in on where you haul your grain is often a moving target. And, it depends on where you are.

Many farmers chiming in to a recent Agriculture Online Marketing Talk discussion say they use a mixed approach when it comes to taking their grain to town.

One farmer says he uses four different delivery points: One local co-op, a larger processor a 45-minute drive away, a food-grade processor 30 minutes away and another processor within about an hour's drive. Each location "often justifies the drive," but he doesn't find the situation ideal all the time.

"I wish I could take it all to the local elevator, but the other options have paid off well over the years," writes Marketing Talk member jkaahend. "A little competition is all we have left, and I don't want to lose that."

Trucking costs -- along with maintaining trucks and equipment -- is a definite drawback for some farmers when they look at their grain delivery options. That's the case for Marketing Talk member idalivered.

"Sometimes haul 17 miles to [an ethanol plant]. Sometimes pays. But, my time with a tandem or hiring semis makes this one questionable," he says. "Most of my grain is within two miles. We have a new feed mill starting in a couple weeks that is eight to 10 miles away that will be an interesting competitor."

Still, for other farmers, storing grain on their farm right out of the field is the best option. This does require larger on-farm storage, of course, but for farmers like GoredHusker, who says his storage is ample, and it allows him more year-round marketing flexibility.

"At harvest, mine all goes to the bins, which are five miles, at the most, from the fields. The basis is normally the worst right at harvest. After it's tucked away in the bin, it really depends on how things shake out," he says. "Sometimes, I let it go in the January-March timeframe. Sometimes, it goes in April/May. Most of the time, it goes in June/July. The carry on the board right now to July is roughly 40 cents. Our basis normally tightens by at least 20-25 cents into that time period as well. For holding eight months, I get 60 to 65 cents more per bushel. This is more than enough to carry it."

Don't have the on-farm storage or the trucks to get your grain hauled where you want it to go? One farmer and trucker says it pays to go to the commercial route.

"It all boils down to cash price less freight. If you own trucks they don't run on air or repair themselves for free. Most farmers fool themselves into thinking that they can haul cheaper than commercial trucks," according to Agriculture Online Marketing Talk member tileman 2.

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