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smokeyjay
Advisor

Re: How Much Corn Is In Storage? Too Much

In our area, just one elevator chain, MKC, has 7 million bu. of wheat in one bunker.  It has another 5 million in four bunkers, only 15 miles away from my farm.  Plus 1.2 million of corn at the same place.  A smaller 350k bunker of corn has been reduced by half, having sold it through a large feed mill and elsewhere.  It’s other locations will have similar piles.  Very low wastage.  Good drainage and aeration.  All dry before going into bunkers.  In 2016, over 35 unit trains hauled grain out of the terminal.

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illinifarmer
Advisor

Re: How Much Corn Is In Storage? Too Much

I agree this is the common situation all over the country. This is also one of the reasons why we see basis off the charts last few years. At these terriblely low prices farmers get hurt and like a chain reaction then the coups then the American people at the grocery store. I don’t know that I’ve seen to many administrators or traders houses falling down do to lack of financial maintenance. A local coop out this way lost two 100,000 + bu bins in what was called a tornado incident, however only spot in entire county to get a damage claim. With the insurance $ instead of rebuilding and replacing they just built another site 2+million $. Then of course as you probably already guessed basis doubled last few years.?.
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sw363535
Honored Advisor

Re: How Much Corn Is In Storage? Too Much

With this latest tax "encouragement" to coop marketed grain... and the growth in basis margins coops have taken..... I wonder how much of the grain marketing is bypassing coops?   

Is ethanol really a friend to the coop system or its downfall?

cheapo and several other of us have been noting the basis issues and the merger mania that has become so common ............. In the last year or two becoming coops larger than midwestern states in areas.

 

It looks like a segment of agriculture that is desperately struggling to survive....  or is there another way to see it?

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sw363535
Honored Advisor

Re: How Much Corn Is In Storage? Too Much

Maybe Mike is right we are raising way too much and shouldn't be storing commodities....... This accident wouldn't happen if we wouldn't raise it and store it......... 

 

And Basis wouldn't be a problem if we didn't store it..  Marketing would be easy if we didn't raise it.  Empty bins that's our goal....

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smokeyjay
Advisor

Re: How Much Corn Is In Storage? Too Much

One tiny problem with this thought: the competition. Look at wheat. The U.S. cut production due to lack of profitability and Russia stepped up and took over the number one spot in exports. We can cut bushels out, but we may soon find ourselves on the outside of markets looking in, wishing for a chance. We compete or go home.
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clayton58
Veteran Advisor

Re: How Much Corn Is In Storage? Too Much

what good does market share do for us if it isn't profitable?

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smokeyjay
Advisor

Re: How Much Corn Is In Storage? Too Much

If you have the soil or climate to grow something else, you can compete in another market. But, if you have limited options, you grow what you can. You compete. It is either you or someone else. You compete. If not, you are out of business.
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sw363535
Honored Advisor

Re: How Much Corn Is In Storage? Too Much

Maybe you hit the nail We don’t compete......
All we are in regulated monopolies who don’t compete.
Our wheat sits while others sell.
We don’t compete
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smokeyjay
Advisor

Re: How Much Corn Is In Storage? Too Much

Wheat farmers have always boasted about being the least cost, highest quality producers of commodities. It rings hollow, with the obsession with new paint and highest priced land, while productivity relative to costs fails to keep up.
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sw363535
Honored Advisor

Re: How Much Corn Is In Storage? Too Much

Not sure "spending habits" are the problem in the wheat market.  Or the inventory on hand... 

Or the misleading opinions on wheat in storage.

 

But you are right about not competing............. we don't ..... we sit on production and ask government to fix our problems.

 

Ethanol is wheats biggest problem..... 

What has been the market for low quality wheat for decades?  Livestock feed.... 

We have for years depended on the feeders to use our poor quality carryover.  Now they don't.  That bump of protein comes from distillers grain and the wheat sits under tarps with nowhere to go.  It falls in line somewhere below cotton seed hulls.

If we were a competitive market, wheat would be priced 4th in line behind Soybeans, corn, sorghum...... then the lower quality and surplus wheat .

 

A function of the highly successful ethanol industry.

 

I was looking at a sale bill yesterday for land in eastern colorado... near Cheyenne Wells.  The FSA wheat yield on base was 29 bpa, the second largest base acres were corn with a 91 bushel fsa yield....    Wheat is just a cover crop.

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