August 2, 2000 | By: Aimee D. Heald
LEXINGTON, KY.

Recently, the USDA announced that loans are available to qualified producers who build on-farm grain storage and/or renovate existing storage facilities. Kentucky producers may be wondering if they should take advantage of this opportunity.

“For producers that have already committed to improving their on-farm storage systems, the answer is simple -- yes,” Craig Gibson, area farm management specialist for the University of Kentucky Cooperative Extension Service. “If debt capital is needed to complete the task, the lower interest cost is enough to answer yes. For others, it is most likely prudent to investigate before making the decision.”

Gibson warns, however, that producers should not procrastinate in making the decision whether to enhance or expand on-farm grain storage. It is important to file loan applications early and to complete the project before harvest time.

“During the past two years, some producers have waited for construction crews to build facilities,” he said. “Materials were shipped weeks before crews were on the scene. Coordinating electrical service and wiring work was also a problem in certain situations.”

Aside from just getting the project completed, simple cost and returns analysis may help producers make better decisions, since the investment amount can vary substantially.

Understandably, producer marketing skills and the variability of commodity prices will affect the returns of on-farm grain storage investments. So, producers must recognize that on-farm storage facilities do not guarantee sufficient returns to justify the investment.

Gibson reminded producers that there are other things to consider when making decisions about on-farm grain storage. Farmers must also look at the potential enhancement in timeliness of harvesting, potential returns to drying on-farm, necessary management in maintaining or improving quality of grain, and other potential benefits.

If you have questions, need additional information, financial examples, etc., please contact your local county Extension office.

Contact: 

Craig Gibson 270-827-1395