by Tony Gonzalez
October 10, 2009 5:45 PM
Bumper crops of corn and soybeans are filling trucks and grain wagons, heading for grain elevators, but the elevator managers are wondering just where they will put all of it, according to Richard Wahl, director of the grain warehouse division of the Iowa Department of Agriculture.
As reported on an October 10 posting from wallacesfarmer.com, (a property of Farm Progress, one of the nation’s agricultural information leaders since 1819) the 2009 Iowa corn harvest is expected to be 2.5 billion bushels - a record for Iowa. And more good news: the USDA forecast for soybean production is 506 million bushels—the state's third largest crop ever, trailing only the ‘05 and ‘06 bean crops of Iowa.
The 2009 crop harvest figures add up to roughly 13% more grain than in ’08. Meanwhile, Iowa has been building bins, adding about 2% to its storage capacity. In fact, Iowa has 1 billion bushels of commercial elevator storage and 2 billion bushels of private storage capacity on farms. This is great news in our current economy, right?
Well…elevators will be forced to pile corn grain outside, which is not ideal for several reasons: elevators cannot charge full storage fees when the grain is on the ground. Grain on the ground runs a greater risk of becoming moldy.
Back to the good news: bean shipments going out of elevators have been strong so far this fall, and soybean prices remained relatively strong through the summer, as buying by China increased this year. Today, beans are moving out of storage as fast as they come in.
The problem this fall will be corn. With low prices, farmers are storing more grain this fall, verses selling it at harvest. The corn pile-up at some elevators will become cumbersome as farmers wait for more competitive pricing.
This year's harvest is not only larger than the ‘08 harvest, but it is maturing later because ’09 planting was generally later, resulting in crops maturing more slowly, thanks to cooler-than-normal temperatures in the summer of ‘09.
A significant source of relief for the grain storage situation is the ethanol industry; Iowa has 32 plants operating today, and approximately one-third of Iowa's ’09 corn crop will be processed by ethanol plants to make fuel. Those plants usually have no more than one or two weeks of storage capacity, but they are consistent users of corn. Therefore, these ethanol plants will continue to take corn for processing through harvest; corn that might have otherwise gone into storage, or become moldy on the ground.