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Storage shortfalls contributing to market bottleneck

An ag economist says lack of storage capacity is adding to some of the challenges the industry is facing.

Joe Janzen is with the University of Illinois. “You see them on the transportation side with things like low water-levels on the Mississippi River. We get bottlenecks that create massive dislocations and then widening basis levels and a break between the price end users are paying the prices that producers are receiving.”

Research from the University of Illinois’ FarmDoc team showed that capacity has only grown by 337 million bushels in the last five years, but had it expanded at the same rate as production it could have been 27.5 billion bushels. Surplus storage at the end of 2025 was just 5 percent, down 10 percent from 2000.

And, farmers are using 80 percent of their on-farm storage. Janzen tells Brownfield there hasn’t been much incentive for farmers or elevators to expand. “We’re in a situation where it’s really hard to justify some of these investments given that we’re in a high-interest rate environment and construction costs are high. The margins from crop production are not generating the kind of capital that we need to see these kinds of investments.”

He says farmers may want to add on-farm storage, but the investment requires careful planning within their long-term marketing plans.