Bloomberg writers Megan Durisin and Jeff Wilson reported yesterday that, “There’s an avalanche of grain coming as U.S. farmers gear up to harvest record corn and soybean crops. And one question looms large: where will it all go?
“Growers are clearing bin space and elevators are prepping outdoor facilities to manage the surge of grain that will come off combines starting this month. But it may not be enough. U.S. supplies of corn, soybeans and wheat — including newly harvested crops along with leftover inventories from last season — will outstrip all crop storage capacity for the first time in records through 1988, government data and analyst estimates show.”
The Bloomberg writers explained that, “A third straight bumper harvest has paved the way for the storage crunch. Adding to the squeeze, a prolonged slump in agriculture prices made growers less willing to sell reserves from last season.”
“Farmers had been waiting to sell, hoping to see a recovery from a three-year slump in grain prices before the end of the marketing year last month. They’ve had no such luck. Corn futures traded in Chicago last week reached the lowest since September 2009. Corn for December delivery was 0.4 percent lower at $3.37 per bushel at 6:50 a.m. local time,” the Bloomberg article said.
Durisin and Wilson added that, “In a bid to beat the crunch, grain buyers have boosted storage capacity ahead of the harvest. Effingham Equity Cooperative in central Illinois purchased another elevator to bring its storage capacity close to 7 million bushels. Still, the group estimates it will have to dump 10 million bushels of corn on the ground — a practice that’s not out of the ordinary with bumper crops.
“‘You have to be ready with logistics and space or you will be plugged at harvest,’ said Effingham general manager Mark Tarter.”
