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For many farmers, the decision of when and where to sell harvested grain can be as critical as the harvest itself. Relying solely on immediate post-harvest sales or commercial storage can leave money on the table. On-farm grain storage, specifically grain bins, can be a game-changer.
Grain bins offer a strategic advantage by providing farmers with the flexibility to hold their crops until market conditions are more favorable.
Imagine harvesting corn in October when prices might be $4.00 per bushel, but by January, the price climbs to $4.50. For a 50,000-bushel bin, that's an extra $25,000 in revenue.
Beyond just price capture, on-farm storage brings a host of other benefits:
Market Timing and Price Capture: Freedom to sell when prices are higher, rather than being forced to sell at harvest lows.
Improved Grain Quality and Reduced Shrink: Better control over moisture, temperature, and pests, minimizing spoilage and weight loss.
Operational Efficiency and Flexibility: No more waiting in long lines at the elevator during peak harvest, allowing for smoother field operations.
Reduced Hauling Costs: Fewer trips to distant elevators, saving on fuel, labor, and wear-and-tear on equipment.
Investing in a grain bin, or a series of bins, is a substantial capital expenditure. A single 50,000-bushel steel grain bin, complete with a concrete foundation, aeration, and unloading equipment, can easily cost anywhere from $150,000 to $250,000, or even more for larger, more complex systems.
This kind of investment often necessitates external funding, which is where grain bin financing comes into play.
Grain bin financing refers to the various financial products and services available to farmers to help them acquire, install, and sometimes even expand their on-farm grain storage facilities. It's a specialized area of agricultural finance designed to support infrastructure investments that enhance a farm's long-term profitability and operational resilience.
Understanding these financing options is crucial for making an informed decision that aligns with your farm's financial health and future goals.
Investing in grain bins is a strategic business decision that can significantly impact your farm's bottom line and operational efficiency.
One of the most compelling reasons to invest in on-farm storage is the ability to maximize your grain marketing opportunities. Harvest time often sees a glut of supply, driving down prices.
By having your own storage, you can:
1. Hold Grain for Better Prices Post-Harvest: Instead of selling corn at $4.00/bushel in October, you might hold it until March and sell at $4.75/bushel, potentially adding $0.75 per bushel to your profit margin.
2. Avoid Harvest-Time Price Dips: Mitigate the risk of selling into a depressed market.
3. Access Premium Markets (e.g., Identity Preserved Crops): Some specialized markets require specific handling or storage conditions that commercial elevators may not offer, or they might charge a premium for it. Your own bins give you that control.
Maintaining grain quality is paramount to receive top dollar. On-farm storage allows for precise control over the environment, which is vital for preserving your crop's value. On-farm grain storage empowers you to:
4. Control Moisture and Temperature: Aeration systems in modern bins allow you to dry grain efficiently and cool it for long-term storage, preventing spoilage and mold growth.
5. Manage Pests and Prevent Spoilage: Proper bin design and management can significantly reduce insect infestations and the risk of quality degradation.
6. Meet Quality Standards for Buyers: Deliver grain that meets specific moisture content, test weight, and foreign material standards, avoiding discounts at the elevator.
Finally, beyond financial gains, grain bins streamline your farm operations by making harvest and post-harvest activities much smoother. For example, on-farm storage grants you:
7. Flexibility in Harvest Schedule: Harvest when the crop is ready, not when the elevator has space. This can be critical for avoiding weather delays.
8. Reduced Reliance on Commercial Storage: Eliminate or significantly reduce commercial storage fees, which can range from $0.03 to $0.05 per bushel per month. Over several months, these costs add up quickly.
9. Streamlined Logistics: Fewer trips to the elevator means less time on the road, less fuel consumption, and more efficient use of labor during your busiest season.
The cumulative effect of these benefits directly translates into increased farm profitability. Holding grain for even a small price increase can yield tens of thousands of dollars for a moderate-sized bin. Plus, you earn indirect savings from reducing associated costs.
10. Reduced Fees: Commercial storage fees, hauling expenses, and shrink contribute significantly to your bottom line. For example, reducing shrink by just 1% on 100,000 bushels of $5.00/bushel corn saves you $5,000.
When you're weighing your grain bin financing choices, remember that FBN Finance offers excellent rates on land loans that can be used to fund on-farm storage.
Our deep commitment to helping farmers succeed is evident in every aspect of our service. We're proud to say that many on our finance team have farming backgrounds themselves, which allows us to offer practical financial solutions, including operating lines and equipment loans, that fit your needs.
We've already helped farmers across the U.S. secure over $2.5 billion in financing, a testament to our proven expertise and dedication to supporting farm growth and infrastructure. Plus, we've designed our application process to be fast and entirely online, so you can spend less time on paperwork and more time focused on what matters most: managing your farm.
Click here to start your application today
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Financing offered by FBN Finance, LLC and its lending partners. Terms and conditions apply. To qualify, a borrower must be a member of Farmer’s Business Network, Inc. and meet all underwriting requirements. Interest rates and fees will vary depending on your individual situation. Not all applicants will qualify. NMLS ID 1631119.