Explained Carl Zulauf, an agricultural economist at Ohio State University: “One of the most profitable strategies for the past five years has been to wait to sell.”
This represents a significant change in agribusiness, which contributes an estimated $8.8 billion a year to Ohio’s economy.
It’s also transformed other agriculture-related businesses, such as one area builder that has seen 90 percent of his work shift to grain storage systems.
The U.S. Department of Agriculture reports that on-farm grain storage capacity in Ohio has grown by 90 million bushels in the past eight years to an all-time high of 500 million bushels.
Of the latest boost to the state’s on-farm storage, 100,000 bushels came from Clark County at the Pleasant Twp. operation of Bart Neer, an addition experts say is typical of the trend.
Neer farms 2,900 acres, some his own, some rented.
Although he sells all the crop he raises on rented land at the elevator each fall to split with land owners, Neer stores the crop he raises himself.
The newest bin boosted his total on-farm storage to 300,000 bushels, which can handle nearly all his personal harvest.
The additional money he makes from storing is not all profit, of course.
Neer estimates the initial cost of putting up and operating a bin at $1.90 a bushel.
But he said the higher prices he can sell his corn for will allow him to recoup those costs in five to seven years.
He also says he’ll need the extra money when it comes time to replace increasingly expensive farm equipment: tractors to plant and harvest, semi-trucks to deliver crops and combines that can run well into six figures.
Sims Construction in London, Ohio, is one of many businesses linked to agriculture to have his work transformed by what’s happened on the economic front in prime corn country.
Madison County, where Sims is located, ranked second in corn production among Ohio’s 88 counties last year with more than 15.5 million bushels. Bordering Champaign County, fifth in the state, harvested more than 14.3 million bushels. Clark County ranked 20th at 10.8 million bushels.
All three counties harvested those crops on fewer acres than farmers planted 20 years ago, harvests made possible by higher corn yields.
Aside from increased yields, “there are a couple of things going on” to drive grain bin construction, said Tom Capehart of the USDA’s Economic Research Service.
“For one thing, we’ve had record corn production in the last few years, so there’s a lot of corn out there to store.”
Helped by ethanol plants, corn prices have been high enough that some farmers have shifted from planting wheat to corn in some areas and even planted corn on fields in consecutive years rather than rotating in a crop of soybeans.
Neer said that area farmers can particularly benefit from on-farm storage because the area is “pretty blessed” with markets for corn.
Ethanol plants in Greenville and Bloomingburg and a corn sweetener plant in Dayton all provide places to sell corn aside from the traditional markets.
Local co-operatives, including Truepointe, whose board Neer serves on, provide a ready pipeline for converting crop into feed for the poultry and other livestock markets of the Southeastern United States.
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