Area farmers determine whether to store corn

Wednesday, December 24, 2014
Larry Henbest, a Cassville farmer, harvests a 98-acre corn field. Henbest and his sister, Deanna Burch, planted 515 acres of corn in the Cassville area in 2014. Jason Johnston/reporter@cassville-democrat.com

July corn futures nearly 30 cents higher than December

Corn future prices look to increase next year, which may cause several area farmers to store their crop.

December corn futures increased from $3.31 per bushel in mid-September to $3.81 per bushel on Dec. 5.

"One thing that I always tell my clients when whether it makes sense to store it or not is the cost of storage," said Brian Hoops, president and owner of Springfield-based Midwest Market Solutions Inc.

Those costs are approximately 3 cents per bushel each month, Hoops said.

"That can vary with each individual based on if they have storage on their farm, or if they have to pay a commercial storage facility," he said. "If you look at this year's corn, it's about a 30-cent difference between December and July. It may cost me 21 cents, but the market is going to pay me 30 cents to do it. So, it makes financial sense to do that."

The most recent U.S. Department of Agriculture crop report predicts Missouri corn harvest at 160 bushels per acre, the second highest yield on record, according to the University of Missouri Extension. Production is expected to be up 22 percent, or 24 bushels per acre, from 2013. Corn traded at a record price of more than $8.30 a bushel in 2012 because of severe to extreme drought conditions.

Larry Henbest, a local farmer, said he and his sister, Deanna Burch, planted 515 acres of corn in the Cassville area this year. He started harvesting the corn around Sept. 10 to complete contracts that he bought in July and August.

"It varied, but most of that was over $4," Henbest said.

He did not store the corn because does not have a bin, he said.

"All I have is a barn with a concrete floor to store a certain amount, but I wouldn't have enough storage area for all of it," said Henbest, 68, has been farming since he joined the Cassville FFA in high school.

Some of the advantages of storing corn is that you do not have to wait in long lines at a grain elevator or feed mill, he said.

"You can just take it to your farm and unload it," Henbest said. "Another advantage of storing corn would be if you have a way of drying it like with fans through your grain bin. You may be able to combine it at a higher moisture, and then dry it."

A reason that people would want to sell now instead of storing it is if they need cash right away.

"If you are expecting the price to increase, you do not have to keep your corn to make money," Henbest said. "You can just buy a futures contract. If it recovers like you're expecting, you can make your additional money off of your futures contract."

Costs are built into the market, and that is why there are different prices each contract month under March, May, July, September or December, Hoops said.

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