As of this writing, most farmers have harvested their 2019 corn and soybean crops. Load after load of grain has been hauled to on-farm grain bins for future sale or hauled to nearby elevators or ethanol/bio-diesel plants for immediate sale. 2019 was a challenging year as spring rains delayed planting and the crops had to remain in the field for longer than past years. Industry experts are calling the 2019 crop to be slightly less than average for most parts of the state. A fall snowstorm across the state further delayed the harvest. Wet fields certainly hampered getting the crop out of the field. Dealing with Mother Nature’s fury can be a huge challenge. Read on to learn more about:
- Factors Affecting Farm Profitability
- Available Funding for Grain Storage
- Grain Bin Best Practices
- How to Know What’s Right for You
Factors Affecting Farm Profitability
There are many factors that affect today’s farmer’s bottom line. Production costs (expenses) falling outside of historical levels can mean the difference between a profit or a loss. Specific challenges to the 2019 crop year are as follows:
- Propane (LP Gas) – Not only did pricing fluctuate but availability dictated who received the commodity. Propane terminals only received a portion of their needed allotment due to trucking limitations and pipeline capacity. Homes and businesses were first in line for shipments with the farmer down the line for grain drying needs.
- Market Uncertainty – Tariffs with China, Canada, and Mexico (among others) affected the demand for grain and complicated the need for longer-term storage. South America is becoming a larger exporter of grain commodities, further affecting market pricing. Crop subsidy programs can help with lost export sales but may not come close to direct sales to other countries.
- Ethanol/Bio-Diesel Plants – Changes in the United States Renewable Fuels Standards have critically affected the demand for ethanol and biodiesel in the marketplace. Exemptions to mandated renewable fuel blending have been granted to additional fossil fuel producers further limiting the demand for Midwest grain. A number of ethanol and bio-diesel plants across the Midwest have closed their doors while many others are scaling back production to try and stay afloat. A farmer who had the luxury of hauling grain directly to a local renewable fuel plant now has to transport it to an elevator.
- Upside to a Smaller Crop – Post-harvest grain marketing pricing is higher than expected due to the law of supply and demand.
Available Funding for Solving Grain Storage Issues
There are programs available to provide financial assistance for anyone wanting to build new grain storage facilities or upgrade existing storage facilities. The United States Department of Agriculture (USDA) operates the Farm Storage Facility Loan Program (FSFL) which provides low-interest financing so producers can build or upgrade storage facilities. Since its inception in year 2000, more than 33,000 loans have been issued for on-farm storage. The FSFL is an excellent financing program for on-farm storage and handling for the small, mid-sized and new farmers. Loan terms can be up to 12 years with a maximum loan amount of $500,000. For more details see the facts sheet at Farm Storage Facility Loan Program
The USDA also has a program called the Rural Energy for America Program (REAP) Renewable Energy Systems & Energy Efficiency Improvement Guaranteed Loans & Grants Program 101. The program provides guaranteed loan financing and grant funding to agricultural producers and rural small businesses for renewable energy systems or to make energy efficiency improvements. Applications for Grants or Loan/Grant combo applications are due by March 31, 2020. Energy audit and renewable energy development assistance grants are due by January 31, 2020. Guaranteed loans are accepted on a continuous application cycle. See the program fact sheet for more information. insert here Program Fact Sheet (from the previous AG blog)
Grain Bin Best Practices
A grain drying system can be the most energy-intensive operation on the farm. It makes good sense to pay close attention to this operation to reduce your energy footprint and maximize profits. Many farmers and industry experts have developed best practices over the years when drying grain as follows:
- Avoid grain bin drying as much as possible by taking advantage of field drying. Planting early maturing crops generally offers the best chance for adequate field drying.
- Make sure your moisture tester is accurate by testing against a calibrated standard. If possible, purchase a second moisture tester to provide a sample between the two. Test your moisture testers with the ones at the local elevator where you intend to sell your grain. Your tester and theirs should be very close to the same values, however, it is their tester that counts.
- Do not over-dry beyond what moisture content is optimal for storage or sale. This not only uses more fuel but increases the wear and tear on fans and burner systems.
- Adjust dryer burners per manufacturer’s specifications for maximum efficiency.
- Whenever possible, use a natural air/low-temperature drying system.
- Pre-clean the grain prior to storage to eliminate weed seeds and broken kernels.
Grain Bin Energy Efficiency
Beyond a good examination of the overall condition of the grain bin when empty, some things to look for to reduce energy costs are as follows:
- Ensure the mechanical components of the grain stirring system are in good working condition. Worn bearings, shaft misalignment, and slipping belts increase energy usage.
- Consider replacing older motors with new energy-efficient motors. Improvements in motor design, core and coil materials, better bearings and reduced windage provide energy savings over older motor designs. There is peace of mind knowing your new motor system will be dependable when needed versus will this old motor make it one more season.
- If three-phase power is available from the local utility company or Rural Electric Coop(REC), install three-phase motors versus single-phase motors. Three-phase motors generally operate cooler with less electrical losses than the single-phase motors. Losses mean higher electrical costs.
- Consider the use of cogged or synchronous belts versus V-belts when connecting the motor to the driven system. V-belts can slip when they become hard and brittle and require proper tensioning. Synchronous belts generally offer 3-5% in energy savings.
- Review the blade design of your current drying fan. Improvements have been made to blade design providing energy savings.
- Consider an upgrade of dryer controls to dial in the optimum dryer temperatures and air flows to minimize drying time. A small change to drying time equates to lower fuel costs.
- Moisture sensors can be temperamental. Pull samples for moisture content to ensure the dryer system is operating correctly.
- When air temperatures are cool, run the dryer in an all-heat mode rather than heat/cool.
- Consider total dryer replacement with an efficient dryer in some instances.
- Obtain a grain dryer energy assessment from a qualified energy services provider not engaged in selling any components of the grain itself.
- Check to see if the local utility company or REC offers rebates for making grain bin improvements. A rebate can help with the incremental cost of more efficient equipment.
Where to Start
How do I make energy efficient improvements that make good business sense and are cost-effective? A good place to start is an energy assessment from The Energy Group based in Des Moines, IA. The Energy Group can provide an investment-grade energy assessment maximizing your chance for project approval for loan or grant strategies mentioned above.
The Energy Group can also provide project management for the upgrade once your funding is approved. The Energy Group has helped customers throughout the Midwest save energy for over 30-years and has performed well over 200-grain bin assessments. In addition, The Energy Group has performed many solar studies, performed numerous studies for sales tax exemptions, and can do life cycle cost analysis to make sure the proposed improvement is justified and you are confident in moving forward. Our energy experts identify and evaluate energy-saving measures throughout your operation.
Take control of your profitability. Contact one of our energy experts today; the longer you wait, the more you may be overspending on energy costs.