By TIM ALEXANDER
Illinois Correspondent

URBANA — Despite some concerns by experts that grain storage facilities won’t be able to hold an anticipated bin-busting corn yield this harvest, a University of Illinois (UOI) economist said the United States will have more than enough capacity to handle record yields.

“We’re looking at 500 million more bushels of corn than last year in Illinois,” commodity risk consultant Tim Abel of MID-CO Commodities in Bloomington, Ill., told news sources. “It will be harder to put away than a year ago.”

Randy Holthaus, grain systems marketing manager for GROWMARK, anticipates a 40 percent increase in grain storage demand from 2006 and said most dealers in the grain storage business have been booked since March.

With the USDA predicting a record corn crop, many corn growers are wondering where all the excess grain will be stored. Darrel Good, a UOI Extension economist, said that though some grain will be piled into temporary quarters the storage situation won’t be as dire as feared.

“The storage crunch will be severe but no worse than we’ve experienced before,” Good told corn producers during a pre-harvest meeting in Mendota hosted by the Illinois Grain and Feed Assoc.
Good took into consideration old-crop inventory, anticipated production, grain usage and storage capacity figures in coming to the conclusion that the United States will actually have around 460 million bushels of surplus storage space.

13.1 billion bushels of corn will be harvested in the U.S. this year, USDA projected, surpassing 2004’s record crop of 11.8 billion. Current on-farm storage in Illinois totals 1.3 billion bushels, while the overall capacity of off-farm storage facilities totals 1.237 billion bushels.

Good said new corn and beans will share space with other fall crops, 2007 wheat, and all corn carried over from the 2006 crop. The largest previously stored crop was in 2005, when 19.288 billion bushels, or four percent less than the anticipated 2007 crop, were stored. Total U.S. storage capacity is estimated by USDA at 20.347 billion bushels.

Good told producers that if the current rate of construction of on-farm and off-farm storage facilities mirrors that of 2006, storage capacity should exceed supply. Local storage problems will contribute to a weak basis, Good predicted.

“With a $.32 carry from December 2007 to July 2008 futures, the average harvest bid is $.775 under July 2008 futures. It appears that the market is currently offering about $.60 per bushel to store corn from harvest to June in this region of the country,” Good said.
More information is available at www.farmdoc.uiuc.edu/marketing/weekly/html/082007.html

Sources: Illinois Farm Bureau website, Illinois Grain and Feed Assoc. website, Peoria Journal Star

This farm news was published in the Aug. 29, 2007 issue of Farm World, serving Indiana, Ohio, Illinois, Kentucky, Michigan and Tennessee.