Bins expanding for '07 corn crop

AP Member Exchange

Agweek

BRECKENRIDGE, Minn. (AP) -- A new set of grain tanks at Minn-Kota Ag Products Inc. on the east side of Breckenridge is emblematic of what many ag watchers perceive is a big expansion in grain storage in the region in anticipation of the 2007 corn crop.

While aggregate numbers in commercial and on-farm expansion are hard to come by, individual projects such as Minn-Kota's are obvious in their communities.

Jody Schuler, president of the long-standing company, put it succinctly: "With more corn acres, we're going to see more bushels, and there's going to be a need for more storage."

Like other elevators in the region, Minn-Kota has been piling more grain in temporary storage in the past couple of the years -- on the ground and in bunkers. Last year, it put 700,000 bushels on the ground.

For the past two years, the company has been planning a change, and this year, it happened. Some of the company's old storage was inefficient and inappropriate for today's needs.

In January, it moved the elevator's office to the old Sigco Research Inc. headquarters building that it had owned but leased out. In February, it took down the old office grain elevator that held about 45,000 bushels, plus an old wood annex that was built in 1950 and held another 80,000 bushels. A couple of fairly new steel tanks next to it were removed and moved to a Minn-Kota facility in Barney, N.D.

"We replaced it all with two big steel tanks that (together) will hold about 700,000 bushels," Schuler said. "All together, we're adding about 800,000 bushels of storage and taking down 200,000. We'll still have to put some stuff on the ground, but with additional storage, we'll keep more in-house."

Schuler said the new storage will come in handy this year, despite excessive moisture that has hurt wheat and soybean crops.

"The corn is doing pretty good," Schuler said, despite planting delays. Row crops have recovered nicely in the past two weeks, although some of the soybeans were planted in mid- to late June in drowned-out wheat acres.

Schuler said it's his impression that there's "just a lot of storage going up." Other projects this summer have been in Fairmount, N.D.; Brushville; and LaMoure, N.D.

Expansion is happening all over, and ethanol-related motives never are far away.

Bob Zelenka, executive director for the Farmers Elevator Association of Minnesota, said he sees a lot of commercial and on-farm storage going up, especially with the shift from soybeans and wheat to corn, which is three times the volume.

Historically, about three-quarters of the storage is on-farm, while Zelenka typically focuses more on the commercial, elevator storage.

"The temporary bunkers we see out there are going to be full, and we'll see some ground storage," Zelenka said.

Much of the expanded storage probably will be in temporary bunkers. "It may not strain the transportation system as much in the past. We have 200 million bushels of corn use going to ethanol" in Minnesota, Zelenka said.

Zelenka said that while ethanol seems to be a big driver in a period of "unprecedented growth," there still will be corn exported, though, because some foreign purchasers have limited choices. About three-quarters of the world export trade in corn is from the U.S.

During the past 25 years, the elevator system has changed from being a storage-and-handling business to more of a handling-focused business. Farmers have taken more control.

Zelenka notes that on-farm storage doesn't have to be licensed and bonded, unless the farmer is handling grain for others. He's seen quite a dramatic increase in on-farm storage in southern Minnesota. Some of these facilities have 100,000-bushel bins and sophisticated grain legs.

"When you look at the size of some of the facilities going up, you can be concerned from a safety perspective," Zelenka said, noting issues with moving parts and bin and tank entry procedures. "At the grain elevator, we have OSHA regulations -- a lot of regulations that control the operations of equipment, legs and conveyors. We have procedures for entering bins and training for employees."

Zelenka said it would be good to see the general farm organizations step up their efforts with on-farm bin safety, in keeping with a substantial growth in capacity.

Roger Krueger is grain division director for South Dakota Wheat Growers, based in Aberdeen. SDWG, a cooperatively owned grain and agronomy input business, has 20 elevators in South Dakota and majority interest in a limited liability company shuttle loader based in Oakes, N.D.

The storage and handling infrastructure -- both commercial and on-farm -- is "going to be playing catch-up," he said.

SDWG currently is under an aggressive expansion pace. This year, the company is adding 12 million bushels of storage space in the state -- increasing from the current 40 million bushels to about 50 million bushels. The company is using a combination of types -- large-diameter steel bins, flat barn-type structures and concrete with asphalt floors.

"Our company is viewing ethanol demand as a long-term business reality," Krueger said.