Big crop leads to storage problems

Expect to see a lot of grain piled up on the ground outside Red River Valley elevators this fall.

That could expose tens of millions of bushels of stored grain, particularly corn, to weather damage.

"It's a concern," said Tom Lilja, executive director of the North Dakota Corn Growers Association.

Wheat already is piling up outside elevators in the western half of North Dakota, where the crop is common.

Wheat, the area's first major crop to be harvested, will yield 39 bushels per acre statewide, up from 31 last year, the U.S. Department of Agriculture estimates.

BNSF, the state's dominant shipper, is doing its best to move wheat out of state quickly, said Kevin Kaufman, group vice president for agricultural products at the Fort Worth, Texas-based railroad.

The railroad has 30,000 grain cars, up from 29,000 a year ago. BNSF also added locomotives and is working hard to identify and resolve delays in supplying grain cars to elevators requesting them, Kaufman said.

The average delay in North Dakota is about five or six days, roughly two days less than a year ago, he said.

That's a big improvement, especially since this year's wheat crop is better and the attractive price (about $5.50 per bushel) is causing many farmers to sell their wheat at harvest, Kaufman said.

The outlook for moving corn quickly isn't as bright, he said.

Corn produces about three times as many bushels per acre as wheat or soybeans.

A record corn harvest, which will begin in early October, is expected.

USDA pegs North Dakota corn production at 275 million bushels, up from 155 million last year.

Minnesota corn production is estimated at 1.2 billion bushels, up from 1.1 billion last year.

There are bound to be delays in transporting corn this fall, but it's too soon to estimate how bad they'll be, said Steve Strege, executive vice president of the North Dakota Grain Dealers Association.

North Dakota Public Service Commissioner Tony Clark said potential delays in moving corn are "worrisome."

The PSC regulates grain elevators, many of which have increased their storage, in part because of rising corn production.

Licensed capacity at 396 state-licensed elevators stands at 286 million bushels. That's up from 133 million bushels of capacity 30 years ago and 250 million bushels 10 years ago.

Those numbers don't include federally licensed grain-storing facilities. There are about 100 such facilities in North Dakota.

Companies with elevators in more than one state typically choose to be licensed by the federal government.

Reynolds (N.D.) United Co-op grain elevator is among the elevators that increased storage. Its nearly completed expansion will increase storage from 1.2 million bushels to 2 million bushels.

Storing corn outside still may be necessary, said Paul Coppin, elevator manager.

"We're all happy about the good crop. We're just not sure where we're going to put it," he said.

Elevators make money by buying grain and reselling it at a slightly higher price.

Losses of 1 percent to 4 percent can be expected for temporary storage in a well-managed, covered corn pile, according to a report prepared for the North Dakota Corn Council.

Losses could be as high as 50 percent for corn exposed to weather for a full storage season, the report said.

Readers can reach Forum reporter Jonathan Knutson at (701) 241-5530