Bin-buster ahead: Timing, weather key to Iowa crop storage

CEDAR RAPIDS - What will happen if we have just too much corn?

Timing and weather will be major factors affecting whether Iowa has adequate corn and soybean storage capacity to handle what is forecast to be a bin-buster harvest.

Iowa's corn crop is forecast by the U.S. Department of Agriculture at a record 2.44 billion bushels, 13 percent above the 2.16 billion bushels harvested in 2013.

Soybean production is forecast at 512 million bushels, up 25 percent from last year's 411 million bushels.

'Farmers probably don't have very much of last year's crop left in their bins,” said Charles Hurburgh, professor of agricultural engineering and a grain quality specialist at Iowa State University. 'They're going to fill up their storage bins first because it costs to store grain at an elevator. Even if they put it on a forward-sale contract, they will still have to pay a service charge.

'I think we will begin seeing corn move to the elevators between Oct. 10 and Oct. 15.”

Nearly one-third of Iowa's corn and soybean crops typically are marketed off the farm during the harvest months of September, October and November. Marketing of the rest of the crop is spread out fairly evenly throughout the remainder of the year.

Iowa leads all states with 2.05 billion bushels of on-farm storage capacity. On-farm grain storage capacity includes all bins, cribs, sheds and other structures located on farms that are normally used to store whole grains or oilseeds.

Iowa has the second-largest off-farm storage capacity in the nation, at 1.4 billion bushels, second only to Illinois with 1.45 billion bushels. Off-farm grain storage capacity includes all elevators, warehouses, terminals, merchant mills, other storage and oilseed crushers that store whole grains, soybeans and other crops.

'We've added a lot of storage over the last four or five years,” said David Holm, executive director of the Iowa Institute for Cooperatives. 'We're fairly comfortable that we can store it, even if we have to pile it on the ground.

'What we don't know is how much of last year's crop that we still have in the bins. Farmers have been reluctant to sell it below $4 a bushel.”

Don Roose of U.S. Commodities in West Des Moines said crop moisture could be a factor as the forecast for the nation's Corn Belt calls for above-normal precipitation in the next 30 days.

If the moisture content gets too high, as it did in 2009, farmers will need to dry the grain before storing it to prevent mold and loss.

'We had an extended fall last year, and drydown was minimal,” Roose said. 'If we can avoid a lot of drydown, drag out this year's harvest and bring it in month by month, we should be able to handle the crop.”

Liquid propane is used to dry corn either on the farm or at the elevator. The price of propane jumped sharply this past fall and winter to more than $5 per gallon in some locations as a number of events - including a lot of people heating their homes early in the season and farmers drying corn late in the harvest - severely tested the capacity of the propane delivery system and infrastructure.

Liquid propane was selling for about $2 per gallon in Iowa this week, according to the U.S. Energy Information Administration. The price may rise as demand increases with the harvest and onset of the heating season, but state officials do mot expect a repeat of the 2013 supply problems and accompanying price spike.

While corn producers in the Dakotas and other states are concerned about the ability of the nation's largest railroads to get their crop to market, ISU's Hurburgh said Iowa is fortunate that 70 percent of the state's crop is consumed in Iowa. Most of that crop moves by truck from farm to elevators, corn processors and ethanol plants.

Amy Homan, director of railcar marketing for the Iowa Northern Railroad, said the railroad has more than enough capacity to handle corn for shippers along its north-south corridor.

'We have plenty of cars to handle it because it only takes us three days to get it down to market,” Homan said. 'We can go from the north end to the south end of our 253 miles of track in a relatively short period of time.

'We don't think the grain is going to start coming at us until November or December.”

Jeff Woods, manager of marketing and business development for the Cedar Rapids and Iowa City Railroad (CRANDIC), said the regional railroads should be able to handle the harvest. But for larger national railroads, such as the Burlington Northern-Santa Fe and the Union Pacific, Woods said, 'Their oil traffic is up dramatically due to the Bakken fields, and their intermodal traffic also is up dramatically. They're also hauling a lot of fracking sand, and that's displacing other carloads. The system is just really tight.

'ADM (Archer Daniels Midland) uses a tremendous amount of corn every day. If it needs to source corn from outside of Iowa, we will work with the regional and national railroads to get it here.”

U.S. corn production is forecast at 14.4 billion bushels, up 3 percent from 13.9 billion bushels harvested in 2013. Roose said the good news is U.S. total corn use is estimated at slightly more than 1.1 bushels per month.

With the forecasts of a record corn crop and yields expected to average 171.7 bushels per acre in the United States and 185 bushels per acre in Iowa, crop prices are not likely to recover very soon. Corn for December delivery was priced at $3.40 per bushel Wednesday on the Chicago Board of Trade, far below the $8-per-bushel corn that farmers remember not so long ago.

Roose said some Iowa farmers may already be at or below break-even in terms of what it's costing to produce a crop versus what they will be receiving when it is sold.

He said a variety of factors influence that the calculation, including how much they are paying for farmland rent, the cost of seed and other inputs, and average yield per acre.