News

On-farm storage could pay dividends for wet, damaged crops

A market analyst says drying wet, damaged crops before storing them this fall is one of the best ways to manage risk if you have on-farm storage.

“You can blend it out yourself. You can dry it cheaper. It’s going to take more handling, of course,” says Don Roose with U.S. Commodities. “Especially if there’s a carry in the market. If you don’t like the price today, you could carry it out to some of these deferred months into the early spring.”

Excessive rain has delayed harvest in parts of Missouri, Iowa, Minnesota and South Dakota, and there have been reports of sprouting corn and soybeans.

“Farmers think as they harvest maybe those sprouts will get knocked off. We’ll see what happens on that,” says Roose. “Probably as much of a concern is running into some mold in areas as well.”

Roose says he’s expecting to know more once fields dry up in the next week.

While drying crops can take care of some quality issues, he says it’s going to be more expensive than usual. But Roose says it can be worth the cost when the crop heads to market.

“This could be a year where the storage pays dividends, but you have to go to work and lock in some carry with it. At the very least, some puts to the downside or leave the upside open. None of us know what’s going to happen moving forward.”

Roose says commercial storage can be an option, but long-term it might be more difficult to make it pencil out.