Bins are blooming
A lot of shiny steel's going up around farm country, a sign a lot of farmers, grain elevators and processors are gearing up for what could be a monster crop this year.
Earlier this week, officials with ADM announced the grain processor is expanding storage capacity in 3 of its locations, 2 in Missouri and one in Quincy, Illinois, according to a report from Dow Jones Newswires. The 2 Missouri locations -- in Novelty and Center -- will triple storage capacity, and the Quincy, Illinois, location will add both grain storage and a new barge terminal. Altogether, the expansion represents 1.7 million bushels of new grain storage.
Those new ADM facilities aren't the only ones going up in corn and soybean country. Co-ops and farmers are following the trend, building more storage to add to the 2010 figure of total U.S. grain storage of 9.74 billion bushels (an all-time high).
New bins are going up at a breakneck pace from Ohio to Quebec ("Bin companies can't keep up with demand in Quebec," says Twitter user d_mccolm). Some farmers say their local elevators are building storage capacity in amounts that make some wonder "why 1.7 million bushels of additional storage for ADM is such a big deal.
"I think my 2 local co-ops have put up close to 1.5 million bushels of storage apiece in the last year or 2," says Agriculture.com Marketing Talk member Pupdaddy. "They also have torn down a lot of older 'satellite facilities.' I'm sure there are more bins going up out on the farms, but we are also planting corn that yields about 15% more than it did just a few short years ago."
New grain bins aren't cheap, but the cost is getting easier to justify, some farmers say. Pupdaddy says the big crops of the last few years have proven the the worth of new storage facilities to keep grain quality intact.
"All that corn that was stored in piles 2 years ago is probably the reason. You can't suffer the losses those piles caused very long before more facilities become more affordable," he says.
And, depending on your location and year-round weather conditions, steel bins can justify their higher cost better than more temporary storage systems, like bags. Saskatchewan farmer and Facebook user Power House says he's had issues with bag systems in the past that have him returning to more permanent structures for his storage needs.
"People here use $250,000 tractors and $50,000 grain carts and need $60,000 to buy a bagger and extractor. You have to plow snow in each field in the winter to get at them, and there's plastic left all over," he says. "Many new bins are coming up in my area. I can sell my 20-year-old bins now for more than I paid for them. Bins are a solid investment."