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Estimating Grain Transportation Costs
Farmers have many choices of where to sell their grain. However, selling at the highest price isn’t always the most profitable option. The costs associated with getting that commodity to market should also be factored in.
Kelvin Leibold is an area farm management field specialist with Iowa State University. He says ownership costs of the grain truck include depreciation, interest, insurance, and licenses. The operating costs include fuel, repairs, maintenance, tires, and labor. It adds up together as total costs which can vary depending on where you take the grain.
"If you’re five miles outside of an ethanol plant, your market is pretty well determined where you’re going to deliver that corn," says Leibold. "On the other hand, if you’re looking at 35-45 miles to deliver beans to a bean processing plant, then you might be running those numbers a little closer."
During the harvest season, you might compromise extra hauling time if it is more than offset by unloading time. The truck could sit in line for several hours waiting to unload, and you’re paying for the labor.
Kleibold says Iowa State’s Ag Decision Maker website can help you crunch the numbers.
"We have an excel spreadsheet that’s called our Grain Transportation Cost Calculator, and that’ll help you figure out the operating costs," he says. "We also have a grain bid price comparison spreadsheet and they can use that to think about where they might deliver, to different buyers, and that looks at the transportation costs and the grain bids."