As corn and soybean prices have declined from the highs of 10 years ago, and yields have continued to climb, demand for on-farm grain storage has surged throughout the Corn Belt.

A USDA report earlier this year indicated potential for record grain storage demand this fall. Nebraska saw an increase of about 140 million bushels in on-farm grain storage for the 25-year period from 1996 to 2019, while the U.S. as a whole saw an increase of 2.5 billion bushels, according to USDA National Agricultural Statistics Service data.

Demand for grain storage is nothing new. It's something Scott Vyhnalek has been gradually expanding on his farm near Friend, Neb., for the past five years. At that time, he started building on a site only a half-mile south of his farmstead, and a half-mile north of Highway 6, with the construction of a 70,000-bushel MFS bin.

This year, he added on, with a 115,290-bushel GSI bin, an overhead holding tank with a 2,520-bushel capacity and a concrete pad beneath it, as well as a grain leg, a bucket elevator and drag conveyors.

"I was short on storage. I never have enough storage, whether it's during harvest or just trying to capture a better time frame to sell compared to harvest prices," Vyhnalek says. "My motivation was largely for a more timely harvest and more storage."

"I have scattered grain bins that our fathers and grandfathers built, and so much of it is tucked away in a yard where you can't get to it with the equipment that we have today," he adds. "It was built for single-axle straight trucks and an auger. I chose this location about four or five years ago, and I chose it because it was on natural gas, and it had three-phase electric power. There's plenty of room to expand here, and I can put in a grain dryer on natural gas, and I have three-phase."

Being a half-mile from Highway 6, the site also is centrally located to several local markets, including Flint Hills Resources, an ethanol plant in Fairmont, Farmers Cooperative in Dorchester, Farmers Union Cooperative in Friend, Bunge in Crete, and several small- to midsize feedlots.

The expansion was completed by Petersen Ag Systems of Norfolk.

"A lot of growers have older, smaller bins that might not have a power sweep for unloading or the capacity they need," says Matt Sharer, grain products manager at local GSI dealer Petersen Ag Systems. "They might fill these small bins in half a day, where it used to take a week. A lot of growers are replacing three or four small bins with one big bin with a power sweep or a conveyor, and trending up to new technology. With current grain prices, there's a lot of grain storage being added to maximize the amount of return on bushels sold. We're seeing more and more bin sales every year."

Reaping benefits of on-farm storage

Of course, the big driver of grain storage demand is the opportunity to take advantage of a stronger basis or sell the futures carry in a deferred month.

"A lot of times, harvest prices are at a low point," Sharer says. "If you don't store it, you're stuck with the price at that time, unless you do some forward-contracting to capture the carry in the market. Sometimes growers can gain up to 50 cents to $1 more per bushel by storing and selling at a later date."

However, for Vyhnalek and other farmers, it's also about harvest efficiency.

"With the leg and overhead tank, it speeds up how fast Scott can finish harvest. He's not moving augers all the time," Sharer says. "He's got an overhead load-out, which is going to help loading out grain when he delivers. He can load his truck in a matter of minutes with an overhead tank."

"We're going to do some in-and-out where I can keep a truck going versus tying all my trucks up sitting in line," Vyhnalek says. "When we're hauling out of here, I can have 3,000 bushels ready to load, so I'm not waiting on the auger or the leg. It's all going to be overhead gravity."

Vyhnalek also picks wet corn to haul to a local feedlot, helping him spread out his harvest.

"That's probably one of the reasons why I haven't invested in a dryer yet," he adds. "Usually, by the time I'm done harvesting wet corn, my soybeans are ready, and the rest of my corn typically is 18% moisture and under. I'm not afraid to start putting corn in the bin and dry it using natural air. Once corn gets under 18% moisture, it's manageable. As long as I've got that arrangement with the feedlot, I don't necessarily need a dryer just yet."

Plans for future expansion

When it comes to planning for a new grain bin site or expansion of an existing site, Sharer notes growers should take into account their own budget, plans for future expansion, and the cost of storing the grain versus selling at harvest.

"If the grower wants to add more bushels of storage long term, we like to fit that so they can expand down the road," Sharer says. "We try to find out what their long-term plans are. We try to design it to fit their budget, but also their long-term plans so they don't run into design issues down the road."

After evaluating bin sizes from 100,000 to 200,000 bushels, Vyhnalek ultimately decided to go with a 120,000-bushel bin, which he says was the best fit for him economically. The site also is built with expansion in mind, and he plans to add a grain dryer and wet bin sometime in the future.

"We took my existing bin structure and priced out different options in the size of the bin to go next to it, and different heights of legs," Vyhnalek says. "We settled on a 60-foot-diameter bin, which is the same height as my existing 48-foot-diameter bin. We felt that was the right size of leg that was going to work, because we could conveyor to a larger bin in the future. And my spouting and everything was going to be about the right length for a future wet bin and dryer."

With the ongoing demand for grain storage across the Midwest, Vyhnalek advises growers to start planning as soon as possible for building new grain structures. He also encourages planning for any future expansion and changes that may occur down the road.

"My advice is you can't start early enough on adding grain storage. It just takes time," he says. "Now, with all the additional demand from damaged grain bins in Iowa, a year from now, it might be a nightmare getting components and bin crews."

"So many growers have a large bin site already started, and they're trying to add a leg or a dryer or more storage in there, and you work with what you have," Vyhnalek adds. "I was fortunate I started more on a clean slate. Everybody's situation is a little different, and I would always look for the future. Always look to expand, and ask yourself, what are you going to do on the next phase of the project?"