Record Crop Brings Challenges

Transportation, storage become growing concern as corn crop reaches record levels. Compiled by staff

Published on: Oct 18, 2004

Prospects of the largest U.S. corn crop in history and record demand have generated excitement across the Corn Belt in recent months, but corn growers are beginning to experience the downside of a bumper crop – storage and transportation challenges.

This year’s enormous corn crop, coupled with a robust soybean harvest, is expected to put a strain on grain storage facilities and transportation infrastructure across the Midwest. Farmers have harvested just one-third of what is expected to be an 11.6-billion-bushel corn crop, and already local elevators and on-farm grain bins in many areas are approaching capacity.

But despite the transportation and storage challenges faced by farmers this fall, Ohio grower Mark Schwiebert says most growers are optimistic about a second straight record crop, record yields and ever-expanding market opportunities for corn. The benefits of a record crop far outweigh these challenges, National Corn Growers Association (NCGA) leaders say, and there will be plenty of corn to satisfy both traditional demand for livestock and new demand for markets like ethanol.

"If you’re going to have a problem, this is a good problem to have," Schwiebert says. "When you’re talking about such a good crop and good yields, storage issues kind of come with the territory."

Several piles of corn can be spotted across the U.S. Most of the harvested corn is averaging 12-14% moisture. If the weather cooperates and the ground piles are picked up soon enough, spoilage likely won't be an issue.

According to the U.S. Department of Agriculture (USDA), Illinois, Iowa and Indiana are likely to experience the most significant storage capacity deficits. The three states combined are expected to produce 7 billion bushels of grain, but have storage capacity for just 6 billion bushels, USDA says.

Corn producers in Nebraska, Minnesota, South Dakota, North Dakota, Ohio, Missouri and Michigan may also have a difficult time finding enough covered storage for their bountiful harvests, USDA says.

Gary Marshall, CEO of the Missouri Corn Growers Association, says the volatile state of grain transportation networks is another problem facing growers. "Since barge traffic on the Missouri River is shutting down early this year (due to insufficient flow levels), there is minimal opportunity to relieve the surplus harvest stockpile with movement of grain out by barge," he says. "We can’t get railcars to move the grain out, barge traffic is shutting down and independent grain truckers are just not there in adequate numbers to help remedy the situation."

Further complicating this fall’s harvest is the fact that transportation and storage rates are on the rise. Barge rates on the Upper Mississippi, Illinois and Ohio rivers have nearly doubled since August, according to USDA’s Oct. 14 grain transportation report. Barge lines say the rate increases are due to increased northbound steel movements and bumper grain crops. Additionally, limited capacity and higher fuel prices are responsible for increased rail and truck freight rates.

Some elevators are raising storage fees as well. Farmers in Illinois and Indiana reported paying up to an additional 4 cents per bushel to store their corn in local elevators.