Is there a new grain dryer in your future?

The farmer on the phone wasn’t sure where to start. After limping through last fall, he wanted to upgrade his grain handling capacity. But should he trade dryers or add more wet holding capacity?

Two factors complicated the issue. First, he farms primarily rented land near an area that was developing rapidly before the economy tanked. However, he owns his grain center. Second, he’s already in his 50s, and not sure how long his son will farm.

He turned to Purdue University Extension, starting with his local ag educator. Specialists helped him ask the right questions. How many more years would he farm? What would he do with his grain center if development forced him out? What was his current debt? How much more debt could he handle?

When grain prices hit the skids after the January Crop Report, he pulled in his horns. At last report, he was leaning toward upgrading his dryer, but holding off on further improvements.

Key Points

• Think through long-term consequences before upgrading dryer, adding bins.

• Arrive at decision quickly to boost chances of getting equipment.

• For information about energy grants, visit www.rurdev.usda.gov/IN.

Fluid situation

Adding to his Excedrin headaches was the need to make a quick decision. For the first time in years, people were stacked up waiting to talk to grain dryer and grain bin reps at the National Farm Machinery Show. Most company reps insisted their company will do everything it can to deliver what they sell. Yet some farmers wonder if it’s only a matter of time before you’ll be ordering equipment for 2011, not 2010.

There are also those who think farmers are overreacting. Many dryers were rarely used for years before 2009. Some believe they’ll sit idle again.

On the flip side, there’s the central Indiana farmer who insists he’s not risking another season like 2009. He struggled with a dryer more than 30 years old. Betting that another wet harvest won’t happen for five years isn’t a gamble he’s willing to take. He’ll take delivery of his new dryer any day.

A quick look at the steel market

By JOSH FLINT

With steel prices dropping back to levels of a couple of years ago, grain structure pricing is equally favorable.

Roy Michels, with Wabash Valley FS in Graysville, Ill., sees potential for steel prices to climb as the economy begins recovering.

“I look for prices to climb before steel mills gear back up in order to push the pricing,” he says.

He also services farmers in western Indiana.

Richard Minnick, Minnick Grain Equipment, Quincy, Ill., says that if the U.S. adds a tariff to Chinese steel, steel prices will go up and so will grain bin prices. He agrees that the economy will gradually pull steel prices back up, though not to 2008 levels.

2008 Farm Bill could make upgrading your dryer cheaper

By JOSH FLINT and TOM J. BECHMAN

Forty-five Indiana farmers out of 81 who applied received government funding to help upgrade their grain dryer. The Renewable Energy for America Program grant typically reimburses farmers for 25% of the project. The idea is to boost efficiency and use less energy.

In Indiana, REAP grants are handled through the Indiana Rural Development office, says Dean Edwards, director of business programs. Applicants must replace existing infrastructure, not buy a dryer for the first time, he emphasizes. Grants typically range from $1,500 to $250,000.

File now

For those considering a dryer replacement for 2010, Edwards suggests applying for the grant now. “You have to apply before you start writing checks for the program,” he says.

Receiving the grant isn’t a slam dunk, Edwards notes. He suggests it fits best for farmers who are going to replace their dryer anyway. Then if they receive reimbursement for 25% of the project, it’s icing on the cake. If your grant is approved, don’t expect reimbursement before midsummer.

“There is no guarantee we’ll be able to fund any applications,” Edwards says.

You’ll need to hire a grant writer to calculate energy savings and complete forms, Edwards advises. His office can supply a list of grant writers. Edwards suggests asking questions before hiring a grant writer to assist you.

To learn more, contact Edwards at 317- 290-3100, ext. 427; e-mail: dean.edwards@in.usda.gov. Or contact Jerry Hay, energy specialist, at 812-346-3411, ext. 126; e-mail: jerry.hay@in.usda.gov.

02103201E.tif

INVESTIGATE, THEN INVEST: Do your homework before upgrading your dryer. Be sure to check out the farm bill’s energy grant program.

This article published in the March, 2010 edition of INDIANA PRAIRIE FARMER.

All rights reserved. Copyright Farm Progress Cos. 2010.