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Record-Breaking Harvest Costing Farmers

Dumping corn

Indiana farmers are expecting a huge crop this year, but that won't add up to record-breaking profits.

There's such a large volume of corn and soybeans being harvested, they're running out of places to put it all.

That means it's costing farmers more to store the crops than it does to produce them.

Running Out Of Room



The truck traffic at Kokomo Grain Company is constant.

"We will process between 400 and 500 trucks a day in the 12 to 14 hour day at this facility," said Senior Grain Merchandiser Mike Silver.

That can add up to 750,000 bushels of corn and soybeans per day. The trucks dump the grain quickly, but a long line soon snakes around the storage facility's entrance.

Indiana and several other Midwestern states are poised to break records with this year's yields. So, the grain elevators at the Kokomo facility are already halfway full.

And, there's plenty of crops that still have to be harvested.

"It's been kind of an unusual harvest where normally we get corn started early and then beans kick in, but we've had an unusually wet fall," said Grain Manager Tom Madru. "So, the beans have been delayed. Normally, we'd be done with beans for about two weeks now, but we're just finishing up beans."

But, there's a problem – room to store the remaining crops is dwindling.

Some grain elevators are still holding a surplus from last year, because the rough winter slowed down – and, in some cases, stopped – grain transportation.

"Railroad performance this year is substandard for what it should be and what it's been in previous years," Silver said. "So, we're not able to ship out the amount of grain this year that we typically do on the rail."

Kokomo Grain usually loads 85-car trains with corn and soybeans to make room for crops at harvest time. This year, they weren't able to do so.

Like other farmers and storage facilities, they had to get creative.

"We're putting a corn pad out for the first time since 1985," Madru said. "The volumes are really up this year and we're anticipating that and we're just trying to create more space so we can handle the crop issue."

Others are resorting to a more temporary method of storage – using large plastic bags or converting machine sheds into grain elevators.

The Indiana State Department of Agriculture doesn't know yet if the state will run out of storage space before the end of the harvest.

If there is a problem, it will likely come with the last 10 percent of the crop.

"The slow or slower harvest as a result of intermittent rains has, as we know, allowed for some grain to get down the Ohio River on barges," said Indiana Department of Agriculture Director Ted McKinney. "Some trains have gotten out."

That may not be enough to free up the space needed over the next few weeks, though.

Storage Shortage Could Be Costly



The cost of storing grain is already higher than the cost of producing it.

And, because there's a big supply of corn and soybeans this year, the prices have been dropping.

That combination of factors means farmers could end the year in the red.

It's hard to believe when you get such a big crop that you might be losing money.

-Purdue Extension Educator Paul Marcellino



"It's hard to believe when you get such a big crop that you might be losing money," said Purdue Extension Educator Paul Marcellino. "But, with the prices that we may be receiving next year, if it's still more pressure on our elevators, the basis is going to widen so the price is going to go down. Do, yes, we could be in a situation where farmers are going to lose some money this year."

Lower prices for grain could translate into steady or declining costs for livestock farmers and consumers of corn-based products – at least in the short term.

But, it will also likely have a negative impact on farmers and the communities they live in beyond just this year.

"We don't want farmers to stay at a below cost of production," McKinney said. "Not healthy for our rural communities, certainly for the farmers, for equipment manufacturers, for people who provide inputs to farmers. Just not a healthy setting for rural Americana. So, we hope prices come back to some sense of an equilibrium. But, it's not going to be immediate. It's going to be months, maybe even a couple of years."

Some farmers are waiting to harvest a portion of their crops until December or January because values are so low.

But, harsh winter winds and low temperatures could damage them and cause another financial blow.

Farmers could get some relief from their insurance, but the payout will likely be a small fraction of their losses.

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