DECIDING ON GRAIN STORAGE OPTIONS THIS HARVEST
Oct 14, 2019
Keeping up with fall harvest also means making effective grain storage decisions. With the less-than-ideal spring planting season and excessively wet growing months, harvest has already been met with challenging precipitation and temperatures. Despite these challenges, Agtegra offers numerous opportunities to growers facing grain storage and contracting decisions.
Some grain storage options include Delayed Pricing (DP) and Condo Storage. A DP contract allows a producer to move grain to an Agtegra location without establishing a price. Unlike with storage, title to the grain passes to the buyer upon delivery, including the quality risk. Several advantages to DP include making delivery while avoiding historically low harvest prices, pricing is separated from physical handling of grain, and on-farm storage is not needed and may be cheaper than commercial storage as well. Condo storage is another option available for those producers who have leased Condo space. In addition, producers can implement a Basis Fixed contract, a formula price contract that combines basis and board of trade price. Basis is established at time of contracting and final price is determined when the board price is set. This option helps in avoiding weak harvest basis or low flat price, quality risk passes to the buyer, and the grower can take advantage of future price rallies. Such contracts eliminate storage costs and provide more opportunity for the producer.
Travis Antonsen, Agtegra Director of Origination, offers suggestions for this unique harvest season: “With the later maturing crop and later than normal harvest, it is important to keep a close eye on the moisture level of the crop at harvest time, especially if planning to store for extended periods of time. If storing beans, make sure the grain is free from pods and your bins have adequate aeration.”
While the growing season has been challenging at best, growers can still have hope in terms of profit this year. Agtegra has some attractive contract options to help producers capture market premiums as well as setting favorable price floors while maintaining upside opportunity. “Futures prices have risen quite nicely in September and are inching back towards the crop insurance price levels established in February. Basis levels remain strong as the harvest window has been pushed back due to a slow maturing crop,” Antonsen added.
Agtegra continues to gear its services to its growers throughout every challenge this season, including adapting harvest hours to help growers get as much harvest completed while the opportunity is present. Prior to the October 10th snowstorm, delivery hours were extended and allowable moisture levels for soybeans were increased to help get as many acres harvested prior to the snow.
No matter the challenge ahead, Agtegra is here for its growers every step of the way.
Some grain storage options include Delayed Pricing (DP) and Condo Storage. A DP contract allows a producer to move grain to an Agtegra location without establishing a price. Unlike with storage, title to the grain passes to the buyer upon delivery, including the quality risk. Several advantages to DP include making delivery while avoiding historically low harvest prices, pricing is separated from physical handling of grain, and on-farm storage is not needed and may be cheaper than commercial storage as well. Condo storage is another option available for those producers who have leased Condo space. In addition, producers can implement a Basis Fixed contract, a formula price contract that combines basis and board of trade price. Basis is established at time of contracting and final price is determined when the board price is set. This option helps in avoiding weak harvest basis or low flat price, quality risk passes to the buyer, and the grower can take advantage of future price rallies. Such contracts eliminate storage costs and provide more opportunity for the producer.
Travis Antonsen, Agtegra Director of Origination, offers suggestions for this unique harvest season: “With the later maturing crop and later than normal harvest, it is important to keep a close eye on the moisture level of the crop at harvest time, especially if planning to store for extended periods of time. If storing beans, make sure the grain is free from pods and your bins have adequate aeration.”
While the growing season has been challenging at best, growers can still have hope in terms of profit this year. Agtegra has some attractive contract options to help producers capture market premiums as well as setting favorable price floors while maintaining upside opportunity. “Futures prices have risen quite nicely in September and are inching back towards the crop insurance price levels established in February. Basis levels remain strong as the harvest window has been pushed back due to a slow maturing crop,” Antonsen added.
Agtegra continues to gear its services to its growers throughout every challenge this season, including adapting harvest hours to help growers get as much harvest completed while the opportunity is present. Prior to the October 10th snowstorm, delivery hours were extended and allowable moisture levels for soybeans were increased to help get as many acres harvested prior to the snow.
No matter the challenge ahead, Agtegra is here for its growers every step of the way.