03-28-2011 03:43 PM - edited 03-29-2011 08:12 AM
New story on our newswire (click here) reports that ADM is adding new storage facilities, which will add up to about 1.7 million bushels of additional capacity for the company.
Off-farm capacity is rapidly rising, according to the report: Commercial storage totaled 9.74 billion bushels in December. That's a 15% expansion from 2001.
On-farm storage capacity is up, too, totaling 12.5 billion bushels on December 1--up 2% from last year.
Does increased storage capacity, on-farm and off, change one's marketing view? Anybody adding storage capacity this year?
Thanks for any thoughts.
03-28-2011 10:15 PM
..I think 2 local Co-ops have put up close to 1.5 million bushel of storage apiece in the last year or two..They also have torn down a lot of older "satellite facilities..so I don't know why 1.7 million bushel of additional storage for ADM is such a big deal. I'm sure there are more bins going up out in the farms..but we are also planting corn that yields about 15% more than it did just a few short years ago. 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 affordable.
03-29-2011 06:25 AM
When one considers adding storage, the primary driver of this is deciding whether to keep up with trend line yields. That alone requires additional storage space that reflects a big investment in new storage facilities, not to mention improving current facilities. In the last five years, our co-op has added one 500k bu. covered bunker and two 300k bu. silos, and we still need to add more space just to keep up with the changing crop mix that used to be over 2/3 wheat and 1/3 milo, corn and beans. Now, row crops have out-paced wheat production as producers increased these acres at the expense of wheat.
03-29-2011 09:53 AM
Our local elevator built a 1 million bu bin this winter. Like most they are eliminating outside piles. I have noticed their is very, very few bushels left in farm storage compared to usual. Our local elevator manager didnt know of any!!! left on the farm. There has been a high % of corn on corn here and last year that didnt turn out so well.
03-29-2011 07:54 PM
Near Bloomington Illinois. If your wondering where bushels were lost last year it was in the heart land the 220 bu corn on the coal black dirt here was off 70bu for lots of opperators. We have 5 ethanol plants 3 rail and 3 Barge teminals within 40miles of my farm. Thereb isnt enough corn here for all of them because yields were off. While hauling my corn I notice alot of trucks from north of my area some Wisconsin. Thats 140miles. Basis running from 0 to -.06. Aventine renewables is even. A ny doubts look on thier web site. Check out Adm Decatur. Other areas I know havent been this high. Looks like here we may run out.
03-30-2011 01:24 PM
You pose good questions, John. Some of us here in SW NE have enough storage if we keep to our corn, wheat, and soybean rotations. However, none of us have done this the past four years. It gets a little hairy when we talk about storage. There hasn't been a lot of on farm storage built around here other than those that had very little storage to begin with. However, most of us are still storing all of it. I'm assuming from your story that temporary storage isn't included in those numbers. Around here, most have opted to place corn in bags. I'd hate to guess how many millions of bushels of corn have been bagged. I've even seen commercial elevators here bag several million bushels of corn and wheat. While I'm not a huge fan of the bags because of what a hail storm does to them, they do beat just piling it on the ground without cover. I try to get my bags all picked up before May 15th as that's typically the beginning of hail season. There are several guys here that prefer bags to bins because of the amount less harvest help they require. Instead of having three or four truck drivers to get grain to the bins, they just pull their graincart up to the bagger and dump on the corner of the field. When the corn is picked up, the extractors in most cases can fill a truck in half the time that it takes from a bin.