Caution Advised for Grain Elevators in Year Ahead

Sara Schafer reported today at AgWeb Online that, “‘Cautious.’ That’s the word Will Secor, a grain and farm supply economist with CoBank, would use to describe the year ahead for grain elevators.

“‘There are some bright spots based on the fundamentals for corn and wheat,’ he says. ‘But there’s extreme caution when we think about the overall picture, as we incorporate what is going on in the soybean market.’

“Even with the recent news of President Donald Trump and Chinese President Xi Jingping agreeing to a trade truce, uncertainty remains. Combine that with farmers in challenging financial positions, likely interest rate hikes and other macroeconomic forces, and the outlook for grain elevators in 2019 looks volatile.”

Ms. Schafer noted that, “‘The big issue is the large crops,’ he says. ‘For an elevator, it’s not just the size of the crop, but it’s where the crop is; we have some surpluses in localized areas, but generally, there is tight supply of storage and capacity.’

Illinois and Nebraska will have the largest grain storage shortages, Secor says. Iowa, Kansas, Indiana, South Dakota and Ohio will also come up short.

“‘We’re hearing of a lot of producers using ag bags and opening up bins they haven’t used in years,’ he says. ‘It’ll be really interesting to see how it plays out.'”

This entry was posted in Agriculture Law. Bookmark the permalink. Both comments and trackbacks are currently closed.