Build Another Grain Bin?

By: Wallaces Farmer

Each month the Timely Tips panel answers questions sent by readers. Members of the Timely Tips panel are Alejandro Plastina and Wendong Zhang, Extension economists, Iowa State University; Leslie Miller, Iowa State Savings Bank, Knoxville; and Rob Stout, Master Farmer, Washington, Iowa. Following are the questions they are answering this month.

Do you suggest any rules of thumb for when a farmer should or shouldn’t build another bin? We already have some on-farm storage, but last fall with good yields we ran out of space. Yields aren’t that good this fall, but I end up filling our bins every year with corn and soybeans. I haul the remainder of the corn to town and pay commercial storage at the elevator. I’ve heard a helpful rule of thumb for evaluating on-farm storage capacity is being able to store 80% of your average production. I’m now at about 50%.

Plastina: Every operation is different, so I don’t put too much value on rules of thumb when making investment decisions. Analyzing grain storage alternatives involves discussing not only the production side (how much corn and beans will your operation produce annually over the next 10 years), but also the commercial or marketing side, as well as the cash flow projection. In particular, when do you typically deliver your grain? Closer to February or closer to August?