Economic and Marketing Information for Indiana Farmers (Jul. 31, 1967) |
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Economic and Marketing Information
FOR INDIANA FARMERS
Prepared by the Agricultural Staff of Purdue University, Lafayette, Indiana
July 31, 1967
Should you Dry ml Store Corn and Soybeans?
by B. F. Jones and P. R. Robbins, Agricultural Economics
Does it pay to store soybeans
or should they be sold at harvest ? What are typical costs for
storing soybeans on the farm?
Does it pay to dry shelled corn
or take the moisture discount?
What are drying and storage
costs for corn?
Whether to sell corn or soybeans at harvest or store on the
farm depends on the cost of storage and the expected seasonal
price pattern in your area. In
addition, the following factors
affect the decision: (1) Waiting
time at elevator at harvest time.
(2) Convenience of farm storage
facilities including location and
unloading equipment. (3) Availability of storage space. (4)
Need for cash. (5) Alternative
investment opportunities. (6)
Risk of grain going out of condition.
Soybeans
Seasonal Price Changes
Return from storage is determined by seasonal price rise. Indiana farm prices for soybeans
vary within a given month and
among various areas of the state
(Table 1). For the last five years
soybeans have averaged about
60 per bushel higher in the northern one-third of the state than
in the southern one-third with
central Indiana intermediate.
Therefore Table 1 may understate the seasonal price change
for a given farm.
Table 1. Indiana farm price of soybeans, by month, 1956-67
Soybean prices usually rise
from October to the following
May. For 1956-61 average seasonal rise from October to the
following May was 320 per
bushel (Table 2). Annual rise
varied from 70 to $1.06 per
bushel. For the most recent five-
year period annual price change
varied from a loss of 190 to a
gain of 620 per bushel, or an
average gain of 220. However,
for the person who picked the
high month, gains from storage
were much larger (440 vs. 220).
Storage Costs
Storage costs vary from farm
to farm because of differences in
bin use costs, losses and damage
and extra handling required.
The largest item is interest on
money invested in soybeans
(Table 3). This cost may be an
actual cash cost or interest earnings foregone. Taxes and insurance combined are the second
most important item. They vary
widely because of differences in
the tax rates and time of sale.
For beans sold in May, farm
storage has paid at least modest
returns over the past 10 years
with storage costs at 21.70 per
bushel. Storage paid in only
four of the most recent 10 years,
but paid substantial returns for
the 1960 and 1965 crops.
Tax and Other Considerations
Soybean storage costs can be
reduced by selling before tax
assessment. Up to March 1, total costs increase at the rate of
Year
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Average
cents
per bushel
1956
223
229
243
269
307
297
252
233
208
207
228
230
244
1957
234
226
225
224
223
217
226
235
212
205
206
209
220
1958
208
207
212
218
215
217
216
216
198
194
190
198
207
1959
201
204
205
210
216
212
203
195
188
195
204
201
203
1960
203
200
199
204
202
201
202
203
197
194
196
203
200
1961
226
252
271
308
300
258
246
245
221
220
226
280
250
1962
231
231
233
240
238
235
235
232
223
224
229
234
232
1963
242
256
255
247
251
250
247
246
244
257
270
260
252
1964
267
257
255
245
238
236
235
239
250
257
259
278
251
1965
276
284
289
291
277
280
278
258
240
230
235
250
266
1966
269
279
271
280
292
307
343
350
296
278
278
283
294
1967
277
272
273
270
270
273
Object Description
| Title | Economic and Marketing Information for Indiana Farmers (Jul. 31, 1967) |
| Purdue Identification Number | UA14-13-econ196707 |
| Date of Original | 1967 |
| Publisher | Purdue University. Agricultural Extension Service |
| Subjects (LCSH) |
Farm produce--Indiana--Marketing Agriculture--Economic aspects--Indiana |
| Genre | Periodical |
| Collection Title | Extension Economic & Marketing Information (Purdue University. Agricultural Extension) |
| Rights | Copyright Purdue University. All rights reserved. |
| Coverage | United States - Indiana |
| Type | text |
| Format | JP2 |
| Language | eng |
| Repository | Purdue University Libraries |
| Date Digitized | 05/01/2015 |
| Digitization Specifications | Original scanned at 400 ppi on a BookEye 3 scanner using Opus software. Display images generated in Contentdm as JP2000s; file format for archival copy is uncompressed TIF format. |
| URI | UA14-13-econ196707.tif |
Description
| Title | Economic and Marketing Information for Indiana Farmers (Jul. 31, 1967) |
| Purdue Identification Number | UA14-13-econ196707 |
| Transcript | Economic and Marketing Information FOR INDIANA FARMERS Prepared by the Agricultural Staff of Purdue University, Lafayette, Indiana July 31, 1967 Should you Dry ml Store Corn and Soybeans? by B. F. Jones and P. R. Robbins, Agricultural Economics Does it pay to store soybeans or should they be sold at harvest ? What are typical costs for storing soybeans on the farm? Does it pay to dry shelled corn or take the moisture discount? What are drying and storage costs for corn? Whether to sell corn or soybeans at harvest or store on the farm depends on the cost of storage and the expected seasonal price pattern in your area. In addition, the following factors affect the decision: (1) Waiting time at elevator at harvest time. (2) Convenience of farm storage facilities including location and unloading equipment. (3) Availability of storage space. (4) Need for cash. (5) Alternative investment opportunities. (6) Risk of grain going out of condition. Soybeans Seasonal Price Changes Return from storage is determined by seasonal price rise. Indiana farm prices for soybeans vary within a given month and among various areas of the state (Table 1). For the last five years soybeans have averaged about 60 per bushel higher in the northern one-third of the state than in the southern one-third with central Indiana intermediate. Therefore Table 1 may understate the seasonal price change for a given farm. Table 1. Indiana farm price of soybeans, by month, 1956-67 Soybean prices usually rise from October to the following May. For 1956-61 average seasonal rise from October to the following May was 320 per bushel (Table 2). Annual rise varied from 70 to $1.06 per bushel. For the most recent five- year period annual price change varied from a loss of 190 to a gain of 620 per bushel, or an average gain of 220. However, for the person who picked the high month, gains from storage were much larger (440 vs. 220). Storage Costs Storage costs vary from farm to farm because of differences in bin use costs, losses and damage and extra handling required. The largest item is interest on money invested in soybeans (Table 3). This cost may be an actual cash cost or interest earnings foregone. Taxes and insurance combined are the second most important item. They vary widely because of differences in the tax rates and time of sale. For beans sold in May, farm storage has paid at least modest returns over the past 10 years with storage costs at 21.70 per bushel. Storage paid in only four of the most recent 10 years, but paid substantial returns for the 1960 and 1965 crops. Tax and Other Considerations Soybean storage costs can be reduced by selling before tax assessment. Up to March 1, total costs increase at the rate of Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Average cents per bushel 1956 223 229 243 269 307 297 252 233 208 207 228 230 244 1957 234 226 225 224 223 217 226 235 212 205 206 209 220 1958 208 207 212 218 215 217 216 216 198 194 190 198 207 1959 201 204 205 210 216 212 203 195 188 195 204 201 203 1960 203 200 199 204 202 201 202 203 197 194 196 203 200 1961 226 252 271 308 300 258 246 245 221 220 226 280 250 1962 231 231 233 240 238 235 235 232 223 224 229 234 232 1963 242 256 255 247 251 250 247 246 244 257 270 260 252 1964 267 257 255 245 238 236 235 239 250 257 259 278 251 1965 276 284 289 291 277 280 278 258 240 230 235 250 266 1966 269 279 271 280 292 307 343 350 296 278 278 283 294 1967 277 272 273 270 270 273 |
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