Grain storage value.

[dads706]

This is a two sided question for landlords and renters both.

Local elevators are 20 minutes (if they can take the grain). Major rail terminals are 45 minutes away. I have on-farm storage for 80% of average crop. My facilities have easy access as well as good gravel to unload to and load from, as well as well lit for nights and ample fans for drying/conditioning. I am 2 miles from the renters grain setup for my overflow.

When calculating cash rent, what value do you put on on-farm grain storage?

[hobbyfarm]

I have zero experience with this but I would price storage by the bushel like the mill does and factor it into your land rent payment terms. Sounds like a win win as you can generate income on something that would otherwise sit empty and the tenant farmer doesn't have to haul everything away during harvest.

Maybe I shouldn't be responding as I'm not qualified but my 2 cents anyway.

[Alan Dinan]

Dad had on farm storage for about 80-90% of his grain. Overflow just went to the river terminal at harvest or the elevator 2 miles from home. I always wanted to put up another bin, and he always responded with “If you think prices will be higher this winter, sell now and buy on paper.” As we didn’t have any landlords with storage. 
With that being said, if you have access to more storage, I would use it, because I like to work harder, not smarter! lol 

[ihrondiesel]

Buying on paper comes with its own risks.  I’ve always been told the same thing, but it dang sure doesn’t hurt as bad to see the market fall by $0.50 when you don’t have margin calls.  I have 0 storage, so mine all goes to town.  I always have had an operating loan so I justify it by paying that off and living on cash until the fertilizer bill is due in June.  For whatever that’s worth.  But I’d like to sell cash grain in March when the market is $0.50-$1.00 higher than harvest, too.  

[Dirt_Floor_Poor]

Bins that we have rented before have been in the $0.10-$0.15 per bushel. Storage is different than it used to be. Bins used to be to try and capture higher prices after the harvest lows. That really isn’t the case anymore. Most farms are running such high capacity combines, and often several of them, that there is just no way to be sitting in line, or not running because the elevator is closed. You have to be able to unload on your schedule. We use bins so we can keep combines moving, that is it. You can deliver to the elevators here and price it whenever you want. If we could haul it all at harvest we would. To put grain in bags here you are talking about $0.25 per bushel at least, maybe a little more. So if you have a good setup and the alternative is putting it in bags or not running at all I guess I might be willing to pay up to $0.25, especially if you are going to stand the repair bills on your bins. 

[Sledgehammer]

8 hours ago, Dirt_Floor_Poor said:

Bins that we have rented before have been in the $0.10-$0.15 per bushel. 

That is what it is here also. 
 

Proximity to your farm would possibly drive it up some. Add a dryer that you can use and it would be a little more yet. I know a gentleman who does that here. Has a setup at home and one rented. It almost doubles his daily capacity because he can fill both drying bins vs just one if grain is wet. The second setup is sitting on the rented farm so hauling to the rented bins is a nonissue.  

[from H to 80]

Bin rent here has gone up like everything else 15 cents if you maintain 20-22 cents if they maintain. We also pay for the electricity used on some of them.        Having your own storage is priceless when you are going full bore.

[856 Custom]

Last bin I rented 9 year's ago I think I paid 12¢ a bushel. Not sure, but I know it wasn't any lower than that. That was just air. Motor burnt up once on the sweep and I replaced that at my cost. I always put corn in it and air dryed. He would show me his electric bill when the fan was running and we came to a agreement between the difference of his prior month bill and the following months bill and I'd pay the difference. If you want to know exactly how much, you can have a meter set only for the bin, but that's ridiculous money for them to do that (here) anyway. Bins/ home storage are always open. Elevators aren't. Another thing to remember is all it takes is some windy October/November afternoon and takes the corn down. Very rare, but it does happen. I've used my reel twice since 1999. Be pretty upsetting thinking about the thousands of dollars lost from the wind damage because of the times you couldn't dump because of relying on someone else to dump you