WHEN THE CORN MARKET CRASHES OVER $1 - Can a GSI Grain Bin save you enough money to still pay?
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- Опубликовано: 12 сен 2024
- It has been a tough year in the corn market as commodity prices are sliding on us! Farmers have had corn in the grain bin so what does that mean for the economics around a grain bin this year in a bear market? Let's jump into it!
Watch all the other GSI videos from this year on the GSI Playlist.
Pervious GrainVue video. • Giving a GRAIN BIN a B...
#GSIPartner
iowANFarmer, Ben Van Roekel, is a 2nd generation farmer in southern Iowa. His goal on RUclips is to showcase what young farmers have to offer to the agricultural community. He hopes to give the general public a glimpse into what life is like on an American corn, soybean, and hay operation. The channel will focus on farming equipment, repairs, precision ag, and daily operations on the farm. Join him in his daily trials and tribulations in the changing agricultural environment.
iowANFarmer
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Email: iowanfarmer52581@gmail.com
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I like the whiteboard edition of your explanation! Keep them coming. I respect how much you prepared your costs stats! Do you mind telling me what your variable cost 3-phase power number was? You did a great job breaking this down - seriously. BRING BACK THE WHITEBOARD in the future.
I don’t have one figured here but the cost of the 3 phase was short of 10K - figuring in the power would be unfair as it has WAS more power than needed.
I love the white board. Much easier to see the issue when it is in writing. Good luck this fall on corn/bean prices.
I think so too! I wisht my hand writing was a little better!
All the math nerds are coming out and loving this video. 😂
Math!
@@iowANFarmer Math. Perhaps the only verifyable science extant.
Huh, now I know why you almost never see a combine operator smiling in a down market!!!!!! Great video, thanks.
Enjoyed the informative video. Really appreciate seeing the numbers getting crunched. Made sense to me. Must have taken hours to prepare this presentation. Appreciate your integrity and humanity. Been a subscriber for years. Greetings from Lacombe, Alberta. Blessings to you and your family.
Glad you enjoyed it! Thanks for taggin along all these years!
I’m not a farmer but I really enjoy watching your channel. This video was an eye opener for me. Thanks for sharing your thoughts on the grain bin financials.
Thanks for watching!
If I see you at the show Tuesday do you want to be left alone or a simple Hello , great content ?
Two years ago I saw you and Andrew looking at equipment and did not want to interrupt.
Always say hello!
I really enjoyed the board and detailed info. Makes learning easy for this guy. Great vid!
Glad to hear it!
Great video, one item that I thought would be worth mentioning in a down year is being able to store grain until prices recover if you can hold off selling some.
You need to give the "Cornstar" family some lessons....they could learn a lot from this...😂😂
when I saw the mustache, I thought this was a different kind of video. Lol. Video is good keep posting
My mustache thanks you.
Thanks for giving the up date. You were not the only one who watched the grain prices head against you. Bins/forward marketing small percentage of grain before you know you have a crop are win some loose some category. Always easy to pick the best option in rear view mirror.
If we could always do that!
I sm very impressed by hiw forthcoming you sre. Thank you.
The drone footage is everything in your videos. What keeps me coming back....
Do you like them at the start? Drone footage is something that is really hard to work into a video.
@iowANFarmer I love your intro. I can see how its hard if you aren't moving tractors. Not a video guy so I can't say when is perfect. But 25-70 second montage in the middle and then another at the end....
Should gather a bunch of drone shots paird with music and create RUclips shorts and Facebook reels...so on
Not an expert but thats what keeps me coming is your style of drone shots
Thanks for the feed back!
This video so far wouldn't make sense where 7 min in it's talking real talk...these videos are important though!!!
Love the white board talk. Most other farmers on RUclips just show you the “fun” stuff. I’m going into my first harvest and I’m terrified.
I’m almost 58, been farming since my teenage years. Started my grain setup in 92’. Started tiling in 96’ and then started irrigation building in 98’. I’ve spent a huge fortune building infrastructure on my farm. I like your numbers and agree with them almost 100% . I was in Mexico on vacation back in January and remember corn dropping and it took alot of fun out of being on vacation. I knew then that hindsight was 20/20
Great comment! We were probably in Mexico at the same time.
OMG Ben!! You sir would make a great math teacher. My eyes didn’t gloss over. Not even once. Thank you for the lesson.
I enjoyed today’s content … thanks for the explanation of the markets and storage
Glad you enjoyed it
Great job Teach!
Glad you liked it!
Ben, don’t forget about the cost of money. If you have a borrowed money on a line of credit, there is a cost per month there as well. The average cost of carry is about 8 cents per month with the higher interest rates. It’s probably a bit different for everyone, but it is something to consider as well. Great video!
That’s correct!
Well done! Excellent approach to the entire down market - especially in the all-around business of farming. Sure, it's a down market but a great look at the long-term side of the farming business.
Absolutely! Well said!
Awesome presentation. You should be teaching current and future farmers.
Wow, thank you!
bins generally make money but last 2 years they lost money this past year been better sell at harvest pretty simple maybe it get better
They say around 80% of the time you’re better off putting it in the bin.
Molly's doing a good job.
The lights are turning on... or you got a huge idea 😂
lol
Great video thank you for explaining it and I agree keep them up
Thanks, will do!
I've never in my life seen someone write dates with the year first
Long term assets are no brainers as they are with you during the up and down markets. No problem with building bins, tiling land, fuel storage tanks. Insurance, seed costs, fert costs, and chemical costs are gone in the blink of an eye.
And it’s very unfortunate there is very little you can do to control them.
LOL! Drive for an elevator, everyone is wanting to get their bins emptied before harvest. I’d be a rich man if I had a dollar for everyone of those farmers that have said to me “I should’ve sold it out of the field last fall.” Hind sight is 20/20.
Yep! But that’s a rarity!
This year gave up 25 years of gain. But time savings from having a good handling system is priceless.
This year hurt
I put in 5 bins and paid most of it in the 21 crop
Right around that time you could pay for a bin in one year!
Is that Molly’s white board for honey-dos?
Thx for the informative video.
That white board isn’t big enough!
Nice. Enjoyed.
Glad to hear!
Great video
10-4 thank you!
A lot of people are paying 5 cents per bushel per month in storage that don't have an asset at the end of year. If you're going to pay the storage you might as well own the bin. If you sold corn at harvest on a July contract, Chicago price for July 15 was 507.
I agree with that. I don’t understand purchasing commercial storage.
I agree with you. Tile and storage. Smart comments
Good. Luck. You have your head screwed on the right way. .
Only way I can keep track of it!
Pretty creative math to justify a f-ing bin! Lol. We sold all our corn at harvest last year avg of 4.90 and hauled it 2 miles but we are very lucky to have an elevator right across the road.
It has been the opposite way too - corn cheap at harvest and a couple $ higher mid summer!
@@iowANFarmer that's only happened twice in ten years, and then you would have to pull the trigger at the high. I've seen a lot of guys keep 7 dollar corn in a bin and take 4 a year later.
I like your white board, and thanks for cleaning it well after each lesson...You did omit the possibility of having a short crop and not but half filling it. Costs would double then
That’s a possibility, but for the most part we are short on storage as it is.
Numbers are the thing that makes or breaks. Like the white board sessions.
Fascinating.
Glad you think so!
Great job
Thank You!
My problem I can't afford to build the bin. It would be fine and dandy but 60k for 12000 bushel bin on 700 acres isn't gonna fly when prices suck and yields down.
Look at a bigger bin
❤ from Norway
Norway in the house!
This is why I enjoy your videos! There's no sugar coating anything, you either go to the Mexican restaurant or Taco Bell....
Good to know!
Scratch the tillage, cover crop, and save on fertilizer. Your soil is your asset. Grain Bin is a must.
I’m not sold on the risk/time needed for cover crops. But I do like no-till!
Yes I love numbers videos
Thanks! They’re hard to do!
Great!!!
Praying always to all farmers I'm from lower Michigan but all farmers may harvest be plenifully$$$$.God bless.
Everyone is going to need it this year!
But wait there is more,for us livestock producers every feed we buy that has corn it is more expensive,we are told buy feed companies that it’s more expensive because it has corn in it and corn is high
Love numbers.....
Great video Ben.
Glad you enjoyed it
usda and fund buyers are running the joint..
They have a profound impact on the markets
Thank you sir!
You are welcome!
interest rates might be dropping and several lines on exchange rates making the u.s. dollar a good place to buy from. prices should be bouncing.
it would be interesting to see on your dates/ where the rate increases happened at and affected the market.
we're pretty small but have some grain bins. i like to think of grain marketing as waves. high and lows tides our goal is to make our sales in the top 1/4 of the high of the year. we know what the bad prices are. we know what the break evens are. if the grains wet, we dont harvest or we haul it all in and dp. if price is dropping, we dump in the bins . then do enough cash sales to prepay fert and seeds. then look at what we finished the checking account with and how much more is in it. that i want to pay some taxes on.
Sound like you have your marketing under control!
My dad was a true figures MAN. Thanks Molly for your camera and editing expertise 👍👍. Bins will never fail you,usually we make the bigger mistakes pull the trigger on sales !! 82,000 ‘/, 18500 = 4.43 per bu. Seems a little 👍what am I missing 🤦♂️. Thanks again you two!!!
The 3 phase power was 10K
@@iowANFarmer🤦♂️🤦♂️🤦♂️👍👍👍
Great presentation ......sure would like to see your whiteboard on the break even point of corn at a variety of market prices, and harvest volumes. If corn hits $ 3.75 , do you plant more , or less ? Great analysis.
I’m not sure how to do that without giving away my own numbers.
@@iowANFarmer maybe assume a hypothetical 50 acre farm , or other , assume equipment is not first year to avoid the accelerated depreciation, estimate fertilizer, and other variable costs, then assume a per acre cost for fixed costs like property taxes , insurance , then come up with a cost per bushel , then discuss the possible market prices......fully agree not to get into your personal finances, but want to get your take on the dire situation at these terrible prices. I'm not a farmer but sure do like how you explain things.
Storing grain long term is a terrible solution to the crop price dilemma. The ans. Is a government that does not artificially devalue prices for their own political gain during an election year. A strong President, not beholden to china, can force the issue to restore a fair market value for Ag production.
Great explanation Ben.
Glad it was helpful!
Great job.
Thank you! Cheers!
Just goes to show anything can pencil out if you get creative with this numbers
interesting ... BUT if you put it in your bin, THEN truck it to the mill, you are handling it TWICE. that costs money too, not a lot ... but it still takes equipment and fuel to transfer that much grain. nice break down!
You might have missed it in the video, I am Charging myself .20 to handle it twice
GSI has been sold by AGCO, is the GSI future uncertain ??
Great question and I will cover that in another video!
Every bushel matters,grain handling is the answer to premium prices,clean grain will not spoil,the point is clean grain pays off using conveying equipment that moves the grain without damaging it.
Innovation in handling equipment coming to Southern Iowa by 2025
You think so huh!?
@iowANFarmer I am a master millwright that has a passion for grain handling,I've seen every situation in handling and innovated it into one conveyor that ties every bin,dryer and cleaner into a self cleaning multi-use system that pays for itself.
I like it
What’s the lifespan of the bin you had built? I’m thinking the bin itself would be good for 20-25 years, at least, with good maintenance. I watch a lot of farmers. TripleR Farms(Alabama) doesn’t store any crop. They do unload it into a building vs trucking it directly in. They’re at the mercy of pricing, good or bad, every year. Idk why they don’t store. They’re primarily corn & cotton.
That bin should last 40+ years easy.
I didn't catch your drying system... we use a GSI laydown dryer in batch.
How does that work out for you?
@iowANFarmer it's worked well while we used an older low volume combine. As I work off the farm it allows me to tackle starting it up and running until the wet tank is empty (around midnight) so family can just run all day to fill it and the gravity boxes. Rinse and repeat... the system was done in 2001 so it's paid for itself.
@@iowANFarmernow we've picked up a newer, much higher capacity machine sooooo this season will be a test.
I hate the idea I didn't sell my grain last fall and put the money in the stock market. S&p 500 is up 18%
True!
2% hydration in 1000 bu is 20 bu
Is that a true statistic?
Good analysis. Thanks. One can quibble with the numbers but it's the thinking that counts. Doesn't the FSA give some favorable interest for investments in storage?
That helps the numbers out! But I did not use an FSA loan on this bin.
understand you whats the option no grain bin you can sell it when havest direct on trailer ?????
Btw what’s the break even on an acre of corn?😮😅😊
One last thought when this bin is clear. How much more does another bin help. More storage or a second crop like wheat or soybeans for diversification in down years.
I would like to have more storage already!
Hello!
Hello!
@@iowANFarmer 👌
I feel like GSI put you up to this one?? 🤔
I can harvest 3,000 bushels a day by myself. You guys harvest 15,000 bushels with five people. It looks like I'm just as efficient and I'm using old junky equipment that doesn't cost much
We don’t run 5 people unfortunately. Lots of the time it’s 3-4.
Do you think RFK Jr.'s pledge to revamp American Ag will completely change the current "system" we have in the US? The System being the same few row crops, GM seeds, heavy spray applications, etc.
I think RFK would definitely look to shake things up.
Great presentation. Send it to Michael Bloomberg. Most Americans have no clue about the economics of farming. Hey, what’s the difference between farming and gambling? The casino gives ya free cocktails 🍹.
We can get those at seed/chemical meetings!
How much does it cost to store it at a co-op or elevator company? if you have it stored why don’t you dollar cost average and sell the same amount every week rather than attempting to time the market.
Probably changes from one elevator to the next but initial cost to store then a fee per month
More white boards for sure.. do one on your hay or tile..
I might be able to do something like that!
Did you take advantage of the Farm Service grain storage loan? Near as I see, it would have saved you about $1,000 a year, I know it depends on your local FSA office and committee how quickly and easily it is to get in place. In years like this, every dollar has value in securing next year.
No, that’s a good program but didn’t work in this situation! Great question!
Biggest payback in a down market is the carry.
Farming is a losing game unless you can control the market . The only people making money from farming is the people that are not doing the work . Land is to high and equipment is to high you use part of your crop for planting from one year to the next . Because the seed companies have a patent on that grain . You can’t even give it away because you would be sued by the seed company .
So I'm in the logging business and I am taking 40% less for a load of logs now compared to 2022. So we can't contract like farmers. Bottom line everything is down. You can't put a price on your time.
Logging has gotten that bad? Do most loggers own the lumber or just contracted to cut it?
We ran around 2000 acres into the mid 80's. We had about 40K bushels of storage in 5 bins. Compared to then, your numbers are scary! Operating costs were a lot less back then. Great video! I wish more people could see what it really costs to grow food for a nation.
Thanks for the info!
We are always screwed
The grain bin has been a tombstone the last two years. A bin only makes money if you sell the carry in a down market. Even then your forgetting interest costs on your money. You could have been gaining %5 each month on a CD if you delivered sold bushels at harvest! Bins are a crutch. Store it and forget it doesn’t work 5 out of 8 years. It only count based on dollars not BS like going on vacation or being able to put in tile or paying taxes because you can defer receiving checks. This is dumb farmer logic trying to convince themselves they did a good job.
You are building equity by buying grain bin
Absolutely!
If you just want it to pay for itself that is a low bar-you need a return over and above your initial investment
Agreed, but the life of this bin is a lot longer than 10 years that’s when the real payback happens
Yea we have two small butler grain bins on the farm we just bought probably installed in the 60’s and i could use them if we ever did oats or barley but no one in our valley does grain anymore probably for over forty years in our area just pasture cattle and alfalfa here- also you get a deduction for depreciation on those bins so you are coming out ahead for sure
Don't look for it to get better Mexico stopped buying corn from the United states 😢
But railway strike might be over!
@@iowANFarmer can you say you Joe Biden or FJB 👍
Always like to see the numbers getting crunched. It probably takes hours of homework to produce this kind of informative video. Been a subscriber for years and appreciate the integrity and humanity that you present. Greetings from Lacombe, Alberta.
You did a good job breaking things down for us to see but with Biden economics and Harris going after the prices of food isn’t good for the country and the farmers producing it and countries are not buying or grains they can get it elsewhere .
Only thing that matters is price of fuel. Where would the numbers be with $2-2.50 fuel? What would new equipment cost with lower fuel? What would repair parts cost with cheaper fuel? Who did you vote for last time? Who are you voting for this time? Elections have consequences...
For farmers we’d be happy to see $3 gas. It makes ethanol way more profitable. Fuel is a very small part of the budget.
what has changed to cause a down market in corn? Are other agricultural commodities likewise down?
All great questions! Multiple factors but you need someone smarter than me to tell you.
@@iowANFarmer If corn is down $4, then my gasoline with 10% ethanol should go down $.40. Makes cents to me.
@@donbrutcher4501 I believe ethanol production is about 1/3 of our crop.
Cole. The corn star is crying poor Meanwhile spending big money on a house re construct and paying his own family rent
Cole addressed that this week. The house project is all of his own money from his investment portfolio.
I don’t know the situation so I cannot comment on it!
Corn isnt worth anything this year. Glad i went all beans. All of the ethanol plants Neg basis.
Beans are down big time too!
@@iowANFarmer sitting at the coffee shop yesterday morning with 2 big farmers (2,000 and 6,000 acre) their discussion was storage, one was still hauling in last years crop. Pipe line to the river is full, ethanol plants dont want it and the price is tanking. Sounds like decent yields and nowhere to go with it. Grain bags to the rescue? And yet beef prices and food prices at all time highs.
Great video Ben, excellent info, I pray that this November things have got to change for the better, have to, not gonna lie things are tough right now, everything is inflated like a blimp, thanks for sharing, look forward to seeing the next video 🇺🇲💪✊🤙👍 #T2024
It has to start going back up at some point!
@@iowANFarmer yes it does, it's just rediculous that it's that low right now, farmers have to haul a lot to even make anything, an there's only so much in the fields
@@derrickpettit86 correct!
USDA ALWAYS TELLS THE TRUTH
It be nice to fact check!
You are making too much sense. Keep doing it.
I’ll do my best to!
Did you not know what being a farmer was before you started farming? Don't worry play the government game.
Been better off last 2 yrs without bins and selling straight from field lol
a market study shows that around 20% of the time harvest price is the best.
Yeah. Something u didnt take into consideration is risk storing it. Risk of spoilage. Risk of handling etc
Game is rigged they have the data, they already have the tech to track.
Let me see your 500,000 house or your 750,000 shed
I’d love to show you them! Give me 30 years and I might be able to make it happen!
8-24-24, $3.74/bu
Yeah, it’s getting even prettier