We intended to put up a 50,000-bushel bin before harvest, but we didn’t get our order in soon enough. We are on a waiting list for next winter to get a new grain bin erected. We’re going to be short on storage this fall. Is there still time for forward contracting, or should I seek storage at a local elevator for those extra bushels?

Panel members answering this question include David Erickson, farmer, Altona, Ill.; Mark Evans, Purdue University Extension educator, Putnam County, Ind.; Jim Luzar, landowner and retired Purdue Extension educator, Greencastle, Ind.; and Steve Myers, farm manager with Busey Ag Resources, LeRoy, Ill.

Erickson: Yes, you still have time to execute a well-developed marketing plan, but waiting may limit your pricing opportunities. If you need storage, I would certainly contact local elevators to see what is available and make plans accordingly. Keep your name on the waiting list for orders for next year, but reserve the right to make that purchase decision before the final order is placed.

Evans: At the present time, an inflationary environment is driving investments to commodities, materials and metals for the long term. Grain commodity prices have been a beneficiary of this environment. The question is whether this is a transitionary situation following the pandemic or a longer-term pattern driven by current economic policies. It would seem to be best to seek forward-contracting opportunities that meet your timeline while hedging and seeking storage locally as well. If commodity prices continue strong, it will likely drive storage prices at local elevators higher as well, resulting in higher costs that you will have to evaluate should you go the storage option route.

Luzar: Evaluate forward-pricing opportunities with respect to basis component of price and futures price component. Your elevator should have historical basis data, as do Purdue University Extension and University of Illinois Extension sources. Discuss what kind of marketing tools your local elevator can provide. A large harvest, railcar shortage or other factors could negatively impact basis. Having a toolbox of marketing tools can assist you in capturing some basis gain, even without physically storing the commodity yourself.

Keep updating your marketing plan, so you avoid “hold and hope” storage scenarios. Volatile grain prices appear to be the norm for now. A marketing plan allows you to evaluate elevator carry charges and keep disciplined in how marketing interacts with cash flow.

Myers: Yes and yes — consider forward contracting and seek local storage. There are always several factors to be considered when comparing to store or sell related to carry, market outlook and the cost of holding unpriced grain. I suggest keeping it simple. Consult your local elevator and/or a marketing adviser to help you ponder this opportunity. This is also a time to consider non-cash grain tools, like options or futures positions, in your grain marketing plan. The best plan may be one that involves multiple tools.