There are many advantages to on-farm grain storage, but David Wilson says the primary one for him is convenience.
“Even if I couldn't get more money for the crop itself, I would have on-farm storage just for the convenience at harvest time,” says Wilson, who farms near Lincoln in central Alabama. “It's the ability to get the crop out of the field and not having to sit in line. If we have a good wheat crop this year, the lines could be backed up to the point of creating major problems.”
Wilson says more wheat has been planted in his area than in many years. At one time, he had a 1,900-acre wheat base. “You just can't put a dollar figure on the convenience of not sitting in a line. I can remember a time when farmers waited in line for 13 to 14 hours, and fights would break out when someone would fall asleep and the person behind him would drive ahead. We didn't have to wait in those lines,” he says.
Wilson, who is a director of the United Soybean Board, farms about 3,500 acres along with his son Jeremy, who represents the fourth generation on the farm. The crop mix includes wheat, corn and soybeans.
“We've been in that rotation for many years. We raised cotton for six years, but we got out of it and probably won't get back into it. We also have about 300 acres of grass that we cut for hay. We've also got about 140 acres of switchgrass that we sell mostly as a mulch product,” says Wilson.
“This spring, we're looking at growing a lot more soybeans than normal because we didn't make a crop last year due to the drought,” he says. “We fertilized heavily last year, and considering current prices, we made the decision to use the fertilizer from last year because we didn't make a crop from it. We thought we could utilize that better with soybeans than with corn. We're planting about 700 acres of corn this year, and the remainder will be in soybeans, either single or double-cropped. We have 1,300 acres of wheat, and that'll be double-cropped.”
Wilson's family pioneered the use of no-till farming in his area of the state, and he continues the practice to this day.
After installing new grain bins this past year, he now has a total on-farm storage capacity of 240,000 to 250,000 bushels. “I added two 60,000-bushel bins last year along with a 16,000-bushel drying bin. I am extremely happy with my drying bin setup — a Shivvers unit. Even with last year's limitations, we ran a good amount of grain through it. I had 2,700 acres of corn, but not much came from it.
“With the Shivvers unit, you put the grain in and level it in the bins. We have two 15-horsepower fans with heaters, and we run the heaters with natural gas. We turn on the heaters and set it at the moisture we want. The augers run around the bottom of the bin and take off the bottom layer, which is your driest grain. It takes off layers, and if the sample is too high in moisture, it shuts off. If the sample is dry, it keeps running. It is totally automatic, and it was drying my grain for less than 10 cents per bushel last year, including the cost of electricity,” says Wilson.
When he put in additional storage last year, Wilson says he was going for a 250,000-bushel total capacity because his average crop should have produced more than 500,000 bushels.
“So I pre-sold 220,000 bushels for delivery in September because I didn't have enough storage to hold it all — I felt like I had to move that grain. But as it turned out, I had to get out of half my contracts. I didn't have a storage problem, but my storage still paid off because I got out of half of those contracts. The broker knew the situation, and he made me an offer of 65 cents per bushel to hold them over until December.”
In most years, says Wilson, on-farm storage pays off from a financial standpoint. “There are very, very few years when it doesn't pay to have storage — to hold it until at least December. I sell a lot of grain in December. You can usually get another 20 cents to hold it until that March contract, which you can start delivering in January. And if you have a real good year, you can carry some money into the next year.”
Not exact science
Determining how long it will take for a grain bin to pay for itself is not an exact science, says Wilson.
“I have put in grain storage and paid for it in one year. Then again, I've put in grain storage and it took five years to pay for it. In a normal year, the storage I put in last year would have paid for itself. But you can't pay for it if you don't have anything to put in it. On average, I think you need to figure that it'll take five years to pay for it.”
Wilson prefers to market at least 50 percent of what he thinks he'll make from a crop, and he tries to get it done before the crop is in the ground. He owns three 18-wheelers and sells mostly to the end market.
“You always plan for an average year, and that's all you can do,” he says. “You can't plan for a really good year and you can't plan for a bad year, and last year was a very bad year.”
In 2007, Wilson put in 11 center pivots, but he never started two of them because he ran out of water.
“We were late getting several of our pivots started. But if we had started them earlier, we probably would have run of water even quicker. We have three wells and one of those went dry last year. We made a pretty good crop with those wells, but that's still not but 600 acres under irrigation out of a total of 3,500 acres,” he says.
Prior to this year's growing season, Wilson says he'll be digging two additional wells. Like other Alabama farmers, he hopes 2008 won't be a repeat of 2007, when the state was plagued by a 100-year drought.
“You're not supposed to have to irrigate 24 hours a day, seven days a week. Irrigation is set up to do that, but that will exhaust your water source in a hurry. On our farm last year, we had one half inch of rain through three months. But the rains this winter have replenished our sources. We now have ample water and that's always good for starting off a growing season. I don't think we've had a single acre of wheat to be drowned this year, so we haven't had too much rainfall. But we did have some trouble getting out nitrogen because conditions weren't dry enough,” says Wilson.
Recalling last year's drought, Wilson says he still has 120 bags of seed corn in the hoppers stored underneath his shed.
“It stayed hooked to the tractor for more than a month, but we never had enough moisture to plant. So we parked it in the shed for planting this year. It was the worst drought any of us have ever seen.”