Large Fall Harvest On The Horizon

Sep 01, 2020

Grain Trucks

Dale Hayek, Grain Division Manager

Due to the uncertainties 2020 has created, I hesitate to put anything in print because how we perceive a situation today tends to evolve into something entirely different in the future. That being said, looking at our trade territory right now, it looks like we will have a large crop coming at us this fall and I hope the crop finishes out in these last few weeks without any unforeseen disasters. With current price levels, everyone will need all the bushels available to market.

As I have stated before, Farmers Cooperative has been shipping aggressively since July of 2019, and we haven’t taken our foot off the accelerator since. We are glad we made the decisions we did, as we want to accommodate this year’s harvest movement and do so with as little disruption as possible. We are still shipping several trains in August and September to empty out and have as much space available for this fall.

With all of the export business we are seeing, we will be shipping out soybeans by rail at harvest, something we haven’t seen in recent years. We have several trains on the books and hope the railroads will be able to facilitate the large export programs at the Texas Gulf and Pacific Northwest. With other business sectors in the railroad’s matrix struggling due to the economy slow down, we are optimistic that both railroads should be able to handle the grain business. The main factor that will be different on rail logistics this year is that the entire cornbelt will be shipping at a high pace. As opposed to last year, where there were production issues in some states, they didn’t ship grain and rail freight was more available.

Corn demand is good, especially on the export side. The main offset to this equation is ethanol demand. With the economy slow down and some schools functioning remotely, this continues to restrict demand. It will be a challenge for us to get to the levels of ethanol usage we were at in the past. This pandemic has forever changed the way our economy functions and how our workspaces have changed, especially in the larger cities.

Every year I mention how we are getting as empty as possible before harvest, and this year is no exception. In addition to that, the new concrete bin construction in Frankfort, Hanover, Jansen, and steel bin in Ohiowa are in their final phases of completion, if not already done. Also, the new bin complex is quickly taking form in Ruby and our contractors have been working nonstop (weather excluded) to have it ready for the fall. It won’t be complete when the first harvest bushels arrive, but it will be utilized for the fall harvest. In total, these projects will increase our permanent storage space by over 3 million bushels this year.

We are also erecting four covered bunkers in Hanover, Jansen, Daykin and Milligan, totaling 3.5 million bushels. Every year, we have several exposed piles throughout our company. With this year’s large crop, we are going to tarp a greater percentage of those bushels to minimize our weather risk.

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