Farmers Facing Grain Storage Conundrum
Bernt Nelson
Economist
Chad Smith
Associate News Service Editor, NAFB
photo credit: AFBF Photo, Sydney Garrett
Bernt Nelson
Economist
Chad Smith
Associate News Service Editor, NAFB
As farmers harvest another massive grain crop, they’re facing low prices and little opportunity to send their product abroad. Chad Smith has details on the ongoing storage issue.
Smith: America’s farmers are harvesting large amounts of corn and soybeans, and the question is, do they have enough room to store the incoming commodities? Bernt Nelson, an economist with the American Farm Bureau Federation, says farmers are facing a classic case of supply versus demand.
Nelson: Corn production for the ‘25-‘26 marketing year is estimated at a record 16.8 billion bushels. Now if we kind of switch gears and look over at soybean production, it's also projected higher, at 4.3 billion bushels. If we kind of think about what's happening with demand, demand is lower due to the ongoing trade challenges. And what this really means is that we've got a big crop, and we need to find a place to put it.
Smith: Nelson said the problem is that the national storage capacity for grain crops hasn’t increased at the same rate as production has.
Nelson: Grain storage capacity has gone up only a little bit at the same time. So, if we look at combined on- and off-farm storage capacity as of December 1, 2024, this totals about 25-and-a-half billion bushels. Our big Corn Belt states have added very little new storage space in recent years.
Smith: He said insufficient storage space can have an effect on commodity prices.
Nelson: The increase in crop size with limited increase in demand or storage space could continue putting some pressure on our crop prices. It also could have a big impact on basis. A weakening basis would really add a significant price risk to the farm sector in the bottom line.
Smith: Learn more on the Market Intel page at fb.org. Chad Smith, Washington.
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