This fall’s record-breaking corn crop may cause storage and transportation challenges for the nation’s corn growers.

Record Corn Crop May Bring Storage, Transportation Challenges, NCGA Notes (10-15-04)

Prospects of the largest U.S. corn crop in history and record demand have generated excitement across the Corn Belt in recent months, but members of the National Corn Growers Association (NCGA) in some parts of the country are beginning to experience the downside of a bumper crop – storage and transportation challenges.

This year’s enormous corn crop, coupled with a robust soybean harvest, is expected to put a strain on grain storage facilities and transportation infrastructure across the Midwest. Farmers have harvested just one-third of what is expected to be an 11.6-billion-bushel corn crop, and already local elevators and on-farm grain bins in many areas are approaching capacity.

But despite the transportation and storage challenges faced by farmers this fall, Ohio grower Mark Schwiebert said most growers are optimistic about a second straight record crop, record yields and ever-expanding market opportunities for corn. The benefits of a record crop far outweigh these challenges, NCGA leaders say, and there will be plenty of corn to satisfy both traditional demand for livestock and new demand for markets like ethanol.

“If you’re going to have a problem, this is a good problem to have,” Schwiebert said. “When you’re talking about such a good crop and good yields, storage issues kind of come with the territory.”

Roger Sy, a Newman, Ill., farmer and vice president of the Illinois Corn Growers Association, agreed. “It can be tough, but it’s a lot more fun to harvest this type of crop than it is to bring in a short crop,” he said.

Sy said elevators in Illinois are filling up quickly and coops are beginning to pile corn on the ground. “There’s more corn on the ground here than we’ve seen in years,” he said. “And what’s amazing is there is still a lot of corn in the fields. There are piles in just about every little town around here. It’s something everybody’s a little worried about.”

Sy said most of the corn coming in from the fields is averaging only 12-14 percent moisture, so if the weather cooperates and the ground piles are picked up soon enough, spoilage likely won’t be an issue.

According to the U.S. Department of Agriculture (USDA), Illinois, Iowa and Indiana are likely to experience the most significant storage capacity deficits. The three states combined are expected to produce 7 billion bushels of grain, but have storage capacity for just 6 billion bushels, USDA said.

“The ratio of grain supply to elevator storage capacity, especially from Iowa east, has been pushed to levels not seen since the mid-1980s,” said Bill Hudson, a consultant with the ProExporter Network.

Growers in southern Illinois are experiencing unprecedented yields this year, Sy said, and the result has been logjams at local grain elevators.

“They’re waiting four or five hours to unload at some elevators in southern Illinois,” Sy said. “Most of these elevators were built 40 or 50 years ago and they just weren’t made to handle this amount of corn. The elevators are doing everything they can and working around the clock to make room for the crop, but they’re having problems getting enough rail cars in.”

Corn producers in Nebraska, Minnesota, South Dakota, North Dakota, Ohio, Missouri and Michigan may also have a difficult time finding enough covered storage for their bountiful harvests, USDA said.

Gary Marshall, CEO of the Missouri Corn Growers Association, said the state’s farmers are already looking for every possible nook and cranny to store their corn.

“ It’s going to be a problem, especially since our production in Missouri is 47 percent higher than last year and 41 percent above the five-year average,” he said. “The basis is very wide and will be until we can move grain into other market areas. But that will take time.” In the meantime, Marshall said, farmers are filling every available structure that will hold corn or, as a last resort, they’re also piling corn on the ground.

Marshall said the volatile state of grain transportation networks is contributing to the problem. “Since barge traffic on the Missouri River is shutting down early this year (due to insufficient flow levels), there is minimal opportunity to relieve the surplus harvest stockpile with movement of grain out by barge,” he said. “We can’t get railcars to move the grain out, barge traffic is shutting down and independent grain truckers are just not there in adequate numbers to help remedy the situation.”

Kelly Brunkhorst, ag promotions coordinator for the Nebraska Corn Board, said transportation reliability is likely to be an issue in that state as well. Though the corn harvest is just 19 percent complete in the state, Brunkhorst said several farmers expressed concerns about storage and transportation issues during the Nebraska Corn Harvest Tour last week.

“What we heard on the harvest tour last week is that a lot of the corn hasn’t come in yet, but the bins are being filled up quickly with soybeans,” he said. “It sounds like transportation is going to be questionable in some places and farmers are going to have to start looking for extra places to store their grain.”

Nebraska is expecting a record crop of 1.33 billion bushels. Historically, 40 percent of the corn crop leaves the state, making reliable transportation critically important. “Transportation issues are going to keep us on our toes this fall,” Brunkhorst said. “Capacity is going to be tight. The shuttle and unit trains are relatively on schedule right now, but as we get further into harvest, we might run into more difficulties.”

Schwiebert, who farms near Hamler, Ohio, said he is already seeing the consequences of the bumper crop in his area. “The timeliness of unit trains is going to be a concern this fall,” he said. “Our local grain coop isn’t accepting any more grain right now because it’s full and it’s waiting on a train. That isn’t uncommon, but it could be more of a problem this year.”

At 160 bushels per acre, USDA forecasts the average yield in Ohio to be above the national average. “The yields have been good and, in some cases, excellent,” Schwiebert said. “So there’s some added pressure for storage. We’re not yet seeing piles outside, but we very well could as harvest progresses.”

Further complicating this fall’s harvest is the fact that transportation and storage rates are on the rise. Barge rates on the Upper Mississippi, Illinois and Ohio rivers have nearly doubled since August, according to USDA’s Oct. 14 grain transportation report. Barge lines say the rate increases are due to increased northbound steel movements and bumper grain crops. Additionally, limited capacity and higher fuel prices are responsible for increased rail and truck freight rates.

Some elevators are raising storage fees as well. Farmers in Illinois and Indiana reported paying up to an additional 4 cents per bushel to store their corn in local elevators.

Last reviewed October 15, 2004