Crop Harvesting Strategies
By Steven D. Johnson, Ph.D. | Farm Management Specialist | Iowa State University Extension
With one of the wettest springs on record, harvesting this year’s crops in a timely fashion could prove challenging. Start preparation early even though much of the Corn Belt harvest will be later than normal. Expect that producers will file larger than normal crop insurance indemnity claims that will require good records and great communication.
Yield Variability and Harvest Losses
Expect greater in-field yield variability that could affect both quantity and quality of the grain harvested. Plan on making regular combine adjustments as the number of smaller ears and kernels will be more common. Consider there are two basic areas where harvest yield loss occurs: pre-harvest and during harvest. Loss of corn from lodging is represented by whole ear loss due to downed plants. Generally, these losses increase as the season progresses when plants dry and weaken. Under ideal conditions, these losses should account for less than 1% of total crop yield but can be much higher under adverse conditions or with delayed harvest.
Harvest losses cannot be eliminated. However, they can be reduced to 1 bushel per acre or less in good standing corn and soybeans if you take
time to check the performance of your combine. You’ll need to know where losses occur, how to measure them, what reasonable loss levels are and
what machine adjustments and operating practices will reduce those losses. Keep your combine properly maintained and check the operator’s manual for suggested settings to properly gather and clean the grain.
Yield Monitor Data
Try to keep production records for crop insurance purposes by field. This too could prove challenging with the number of acres that were planted
late in addition to replant. Remember, production evidence for crop insurance losses can initially be “soft records” as required by the industry. These records are typically yield monitor data or scales on grain carts with proof of calibration. Also, consider the need for crop insurance “hard records” or those verified by a third party. Examples include crop insurance adjuster information, warehouse receipts, settlement sheets and certified grain bin measurements.
Drying and Shrink
The cost of drying corn will often depend on the moisture levels at harvest, which could be higher than normal. Many farmers prefer to dry corn
on-farm to 13% to 13.5% moisture, especially if it’s to be stored beyond the winter months. Corn harvested and delivered to an elevator or processor
will be adjusted to 15% moisture. Corn to be stored under warehouse receipt will be adjusted to 14% moisture.
Because corn is sold on a weight basis (No. 2 corn weighs 56 pounds), additional moisture for stored corn also reduces the number of bushels. To
compute the extra shrinkage for farm-stored corn, use a shrink factor of 1.25%. Commercial elevators often use a shrink factor of 1.35% to 1.4%.
The extra shrink cost is calculated by multiplying the extra points of moisture removed times the shrink factor times the current corn price.
Storage, Basis and Futures Spreads
If grain can be stored in existing on-farm storage facilities, the ownership costs (depreciation, electricity, maintenance, insurance, etc.) could easily
run 1 to 2 cents per bushel per month. Bushels stored commercially run 3 to 4 cents per bushel each month they’re stored. These commercial storage charges vary among elevators but usually are a fixed charge for the first few months, with a slightly lower charge for each additional month
If you plan on storing longer term, you should dry and cool the grain as quickly as possible following harvest to maintain grain quality and a longer
shelf life for storage. Expect both corn and soybean 2019 ending stocks to decline. As a result, regional basis (cash minus nearby futures) will be
stronger. However, the futures spreads among the trading months will decline and could limit a positive return to storage.
Handling Grain, Interest Charges and Cash Flow Needs
The cost of moving grain in and out of farm storage varies by the type of handling equipment, bin size and bin shape. Generally, handling costs are
greater for flat storage and smaller bins. The extra handling costs associated with most farm storage facilities range from 2 cents to 2.5 cents
per bushel and are accrued each time the grain is handled. With the potential for greater quality concerns with this years’ harvest, consider
limiting the quantity of bushels that you commingle or blend off with old crop bushels.
There’s a time value of money, often in unpaid interest costs for having money tied up in stored grain inventory. If a farmer has a loan, the loan can
be repaid with proceeds from the sale of grain. So interest expense is reduced if the grain is sold at harvest. But if the grain is stored, the loan is not repaid and interest expense continues. Interest costs could run from 1 to 2 cents per bushel per month for corn and 3 to 5 cents per bushel per month for soybeans.
Following six years of above trendline U.S. corn yields, higher prices and crop insurance indemnity claims should benefit producers’ cash flows. However, expect profit margins to remain tight for who that didn’t sell the spring futures prices rallies and U.S. corn planted acres to increase in 2020. Consider the need to improve drainage and compaction in your fields and book propane, fuel, fall fertilizer and seed early.