GRAIN BANKS IN THE MIDWEST
Research Progress Report 80
September 1963
by W. H. Stahl and W. S. Farris, Department of Agricultural Economics
Summary
Grain banking is a system whereby a farmer deposits grain with a country elevator and later withdraws an equivalent amount of grain in the form of complete feed. Inherent in the system are labor-saving features available to both the farmer and elevator operator. The farmer is permitted to deliver a supply of grain to the elevator at his convenience, thus avoiding the necessity of repeated trips to the elevator in his busiest seasons. When delivery is made by the elevator, the scheduling of processing and delivery permits a more efficient use of labor and machinery. The development of mechanical bulk feed handling equipment at both farm and elevator has encouraged the expansion and use of grain banking.
It is estimated that 2, 304 grain banks were in operation in Ohio, Indiana, Illinois and Iowa in 1961. These grain banks tend to be concentrated in areas of greatest livestock production but are found throughout the four-state area.
Grain banking constitutes an important segment of the grain and feed business in the Midwest. The average elevator with a grain bank handled 234, 374 bushels of feed grain; of this total, 21 percent of 50, 399 bushels moved through the grain bank. Corn constitutes the largest share of the grain bank grain, 80 percent.
Feed handled through the grain bank amounted to 38 percent of the total feed sold by these grain banking firms. They averaged 5, 474 tons of complete feed with 2, 089 tons of this total using the grain bank.
Feeders of beef cattle, dairy cattle, layers, broilers and turkeys all used grain banking facilities. The largest single user of grain bank feed was the hog feeder, taking 67 percent of the total feed distributed by this method.
Grain bank services varied widely as to charges and items included in package charges. The cost to the farmer of processing feed through the grain bank averaged $6.95 per ton. Charges for individual functions were as follows:
Hauling from farm. . . . 5¢ per bu.
"In", "out", & insurance 1-2¢ per bu.
Shelling............... 2 1/2¢ per bu.
Drying................. 1¢ per each % of moisture removed
Grinding and mixing . .	10-15¢ per cwt.
Storage................ 1 1/2¢ Per bu. Per mo.
Delivery............... $1.00 per ton ($3 min.)

This Study
Grain bank operations in the Midwest
were studied to determine their extent and
nature in the area. Specific features covered
This material was prepared under a research and marketing act contract between the Economics Research Service, United States Department of Agriculture and Purdue University Agricultural Experiment Station.
PURDUE UNIVERSITY • Agricultural Experiment Station • Lafayette, Indiana