Assess Your Local Grain Situation
Mark Nelson
More on the Kansas Grain Storage Situation
September 30, 2009
With the additional information provided by
today’s USDA Grain Stocks Report, we’ve been
able to update our one-page “Kansas
Grain Storage Situation” analysis. Today’s
report, while providing a bit of good news
regarding the availability of grain storage in
the state, still suggests that the combination
of fuller than normal bins for this time of year
plus an expected record fall harvest will
undoubtedly cause storage and potentially, grain
marketing challenges this fall.
The Issue: There’s a Lot of Grain Out There
As of September 1, there was nearly 463 million
bushels of wheat, corn, grain sorghum and
soybeans in storage in Kansas (both on and
off-farm). This amount of total grain in
storage was 26% more than a year ago and 13%
more than the ten-year average. The crop taking
up the most bin space is wheat, representing 76%
of all grain stored in Kansas. Stocks of wheat
(29%) and corn (32%) were both above year ago
levels while stocks of grain sorghum (-6%) and
soybeans (-22%) were below 2008 levels.
The good news is that this 463 million bushels
of stored grain is 32 million less than I had
projected a week or so ago, indicating that
farmers and elevators worked hard over the
summer to make a little room for this year’s
fall harvest.
The bad news is that we still have a lot of
grain in storage. The 463 million bushels in
storage on September 1 is the highest level
since 2000’s 482 million. How tight will it get
as we harvest our anticipated record fall
crops? We can estimate it by beginning with
September 1 stocks and adding in the KASS
estimated 880 million bushel fall harvest (corn,
grain sorghum and soybeans); then subtract
estimated fall consumption of 357 million
bushels (the ten-year average amount of corn and
milo that will be fed or turned into ethanol,
soybeans turned into meal and oil, wheat into
flour and the portion of all four of these
commodities that will be shipped out of Kansas
for possible export).
Our new estimate is that there will be 986
million bushels of grain and soybeans that will
need to be in storage somehow, someway in Kansas
as of the end of harvest. This amount of grain,
if realized is 133 million more bushels than
last year’s record December 1 grain stocks level
and represents 78% of available on and off farm
storage capacity in the state.
Clearly the potential for storage challenges due
to high grain stocks and a large crop coming on
are real this fall. Challenges will likely
include longer than normal lines at harvest,
grain piled outside, weaker than normal basis
levels and some elevator locations not accepting
grain for “storage,” instead asking that all
grain delivered be priced immediately. Clearly
there will be varying conditions across the
state which is all the more reason for a review
of your local situation, including a visit with
grain elevator staff regarding storage
availability and marketing options, and the
development of a backup grain storage and
marketing plan in case conditions change during
harvest.
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