If Missouri corn acres increase for 2007 to meet ethanol demand, one key question is: Where will all that corn be stored? Judging by the demand during the recent winter grain-bin discount season, farmers are planning to store some of those additional bushels in new bins on the farm.
"The grain-bin business is popping," says Marty Bunton of Liberal Seed and Farm Supply in southwest Missouri. "One of the manufacturers I represent was looking at June delivery for bins ordered the first week of February. I've been selling bins for 35 years, and that's the biggest lead time I've seen for a winter order."
Many bin manufacturers say a three-week lead time is more typical, although farmers faced some six-week waits for bins ordered in late summer and early fall 2006 at many Corn Belt locations.
"There's been a lot of grain storage put up on farms here in southwest Missouri and southeast Kansas over the past couple of years," Bunton adds. "In many cases, farmers who used to haul grain directly to town now have to store their corn and deliver it later in the year to ethanol plants. That's why there are a lot of grain bins going up on farms that never had on-farm storage previously."
Steel prices caused sticker shock last summer, as the economic boom in China and India put pressure on raw material prices.
GSI's Gene Wiseman says the cost of building a steel grain bin these days typically runs from $1.50 to $2 per bushel, depending on the size of the bin and how many additional features, such as stirring devices, are ordered. The cost of steel accounts for 80% of bin construction. Concrete costs also continue to rise, so the cost of the pad, and bringing electrical service to a new site, also can significantly impact the cost per bushel, especially on smaller bins.
Read more about crop planting intentions and on-farm grain storage in the March issue of Missouri Ruralist.