The View From Rural Route #8

My long time friend who has farmed all his life and is known for his even manner, suddenly let himself go the other day in frustration over the fact that the nearby giant grain company was telling farmers it would not accept grain for storage.

Wheat harvestIt was harvest, and unless you were a farmer willing to sell your grain as it moved onto the scales at the elevator, or you had contracted earlier to sell at a certain price to the company at harvest, you could not rent storage at any price. Most farmers think that if they hold the grain for a period after harvest, cash prices will rise most of the time. Sometimes, however infrequently, prices are highest at harvest, but that is rarely the case. Therefore, if a farmer cannot put his grain in storage, he feels as if his marketing options are greatly reduced, and he thinks the grain company is taking advantage of him.

Already this year, farmers were blindsided by an issue regarding the so-called basis, which was way out of kilter from normal. It cost some of the producers plenty, so some of them were already steamed and still hot about that when this storage problem came up. Besides, it’s almost un-American to love giant international grain corporations. The grain merchandising industry has consolidated at a withering pace over the last 30 years, reducing competition and local ownership in many places.

The storage cutoff is probably legitimate, if numbers from the grain industry and the government are near accurate. The bottom line is this: Current total commercial and farm storage capacity in Kansas is 1.28 billion bushels; right now 1.4 billion bushels of corn, wheat, soybeans and milo need a home.

There is no room at the grain inn. That might be why on the landscape there are new steel private bins sprouting. They are big, compared to those we put up in the 1950s.

At one recent inventory, there were 400.5 million bushels of wheat in storage; 58 million bushels of old crop corn still hanging around; 19 million bushels of old crop soybeans resting in storage; plus coming in 607 million bushels of corn; 180 million bushels of milo arriving and 146 million bushels of soybeans to account for the crowded elevators.

There’s some hope, with the government thinking that 293 million bushels of hard red winter wheat will be exported by next June, and a lot of that will be from Kansas. Also, a big push is on to increase the alcohol content to 15 percent in ethanol, and if that happens, probably more corn will move from storage to distilleries.

Also, the wheat crop wasn’t quite as large in Kansas as thought in August. The government reduced harvested acres by 2 percent down to 8.0 million, which brought the production figure down to 360 million bushels from 369 million.

There’s trouble anew in wheat country, and the agronomics demand a column or more. It is really dry here in planting season, which is now late, and the options for growers basically amount to giant gambles with several different planting techniques with hopes for non-washing, non-packing rains. It used to be said that the wheat crop is killed off at least nine times before it is harvested. Sometimes, it is hurt. Let us hope not this time.

Jim Suber is an award-winning farm, ranch, and rural life columnist residing on Rural Route No. 8, Topeka.

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Posted by on Oct 25 2010. Filed under Columns, Rural Route #8. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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