Iowa Public Television


Coping With A Huge Harvest

posted on November 5, 2004

The convergence of bumper crops, increased international trade, and higher fuel prices has led to a record-setting year for U.S. railroads. During one week in October, the rail industry moved the most freight volume in its history, breaking a record set one week earlier.

But the boom in business also has led to some logistical headaches. Rail companies say they're scrambling to buy new locomotives, schedule more trains and hire more people.

Nowhere is that more apparent than in farm country, where the grain delivery system is straining under the weight of this year's huge harvest. Country elevators and grain co-ops -- the staging grounds for the nation's crops -- are working overtime to accommodate the bounty. But it hasn't been easy. Nancy Crowfoot explains.


Coping With A Huge Harvest

When it rains, it pours ... and we're not just talking about this year's bin-busting harvest where corn in some areas has reportedly exceeded 200 bushels an acre & and soybeans have averaged over 50 bushels.

On Monday, the rain in central Iowa slowed farmer deliveries to elevators, which came as a welcome relief to some elevator managers whose bins are almost full.

Tracy Gathman, General Manager, Two Rivers Coop, Pella, Iowa: "The rain is very helpful somewhat, because there isn't any harvest activity going on today. It's also allowing us to get our dryers caught up so that the wet bins are empty so that once harvest hits again we'll be able to take everything at full speed."

The rain may be a temporary reprieve, but the issue of how to deal with so much grain remains. Part of the problem for this central Iowa elevator is not just the current corn harvest -- but the record soybean crop. Much of the high-yielding bean crop is still in the elevator and just now is being moved out. Part of the problem was due to delays by one of their buyers.

Tracy Gathman, Two Rivers Coop, Pella, Iowa: "Seven days into the delivery process the processor closed for two weeks. They told us they had railroad cars coming in that they had to get unloaded and therefore they shut the truck market off and that just doesn't work for us."

Another central Iowa coop which sells to soybean processors was dealt the same hand.

Jay Nelson, Heartland Coop, Des Moines: "What we have in house today is what we're stuck with until they get that type of situation fixed."

Heartland Coop in Avon, Iowa, has a storage capacity of 5.5 million bushels ... Two Rivers in Pella, Iowa, can store just over two million bushels. And both already have begun moving hundreds of thousands of bushels of corn to the ground & even in the middle of a cold autumn rain.

Jay Nelson, Heartland coop, Avon, Iowa: "It's not the most ideal condition with which to put corn on the ground but sometimes necessity dictates you have to do what you have to do and the corn keeps coming at us so we had to find a place to put it."

Fourteen miles away, during the same cold rainy day, Two Rivers coop was constructing its third temporary storage area. The federally licensed facility filed for "temporary storage" with the USDA -- which would allow it to store farmer-owned grain on the ground until April 31.

Tracy Gatham, Two Rivers Coop, Pella, Iowa: "We went to the ground earlier than what we normally do. Normally it's the last 10% of harvest or 20% of harvest that we go to the ground with. We're probably half done to date and we've already got our normal ground piles full."

"Once we reach our licensed capacity with the USDA federal warehouse bureaus then we'll have to go to some type of a forced sale, forced price later, that type of think because we wont have a choice."

Storage is a common problem throughout the Midwest. The USDA says (as of November 2), statewide, there are requests for 56 "temporary" storage piles and 65 "emergency" storage piles ... for a total of 74 (M) bushels on the ground.

In Nebraska, requests total 24 piles for temporary and 34 for emergency storage for a total of 48 million bushels on the ground.

Minnesota, Indiana and Illinois have less than 40 million bushels each on the ground by federally licensed facilities.

So much grain on the ground is due to both the high yield and farmers' reluctance to sell. But still, the large amount of grain that is owned by elevators is difficult to move to the marketplace.

Tracy Gatham, Two Rivers Coop, Pella, Iowa: "We lost the railroad about four or five years ago and we've had to learn how to deal with being a truck house and we go from there."

It would be easier because you could, needless to say a railcar holds a lot more than a semi does but that is beside the point. You could ship it out a little quicker."

But even those with rail service have their own issues this season.

Jay Nelson, Heartland Coop, Avon, Iowa:

"The train that was in today was originally ordered for the 25th of October, so you're about six, seven days behind on this train."

The facility is filling up extremely fast. We are looking at a situation where we could be plugged by the end of the week if another train that I have ordered doesn't show up."

By Friday morning, the expected 75-car train had not shown up. With a full elevator, the temporary solution continues to be ground storage.

No matter the headaches of transportation and storage, neither elevator is complaining that this crop is too big. They agree it is a pleasant problem to have & but it is a situation where both farmers and the marketplace will have to be patient.

Jay Nelson, Heartland Coop, Avon, Iowa: "Eventually, I mean, the corn will find its way to the market. So yeah, eventually the railroads will be able to move the size of the crop, but it's just not going to be in the same timeframe that the market wishes that the grain would move to the market."

For Market To Market, I'm Nancy Crowfoot.


Tags: agriculture corn crops harvest markets news