It looks like 2016 will be another year for farmers to start looking at options outside the grain bin.
With much grain still holding over from last year, there will be an increased need for alternative storage options. Grain bagging can alleviate marketing stress and allow you to quickly store your grain and sell when you are ready.
We talked to grain marketing and hedging expert Andy Shissler of S&W trading, who also manages a farm in eastern Iowa about the projected grain marketing outlook, and how to stay on top of your marketing game this year, especially as it relates to grain bagging.
Last year Andy bagged grain for the first time because of storage shortages and low market prices. At first, he said, there was some apprehension about using grain bagging for grain storage. But they took a chance and this year plan to bag 2x as many bags as last year. He claims that all his fears were overcome when he realized how simple the process went. “Unloading, especially, went smoother than expected.” He placed his bags next to an ethanol plant and later sold at an improved basis of 38 cents over harvest for his corn. Since he was allowed to move his grain when he chose, he made more money and had ultimate control over his grain.
Gaining control over your grain when on farm storage options run out is a smart option vs. storing at a grain terminal. You have to keep in mind, they call it a “terminal” for a reason, because that is where your control over your crop will end.
We have also visited with lots of grain bagging customers that say they experienced the most efficient use of their combine because it never has to stop (you can bag directly in the field). They also saved money on labor costs because one person can run a grain bagger, and they lowered their fuel costs because they eliminated unnecessary trucking. Also it was pointed out that if they no longer needed the grain bagger, it could be easily sold-whereas that is not as easily done with a grain bin.
Andy’s projection for this year, as a commodities broker and farm manager, is consistent with last year: there will be a space shortage and to avoid a bad basis farmers will need to look into alternative grain storage.