Farmers know that grain prices don’t usually peak during harvest, which is why an investment in on-farm storage can often be justified. However, determining the value of that space in giving a farm the ability to capture the spread between prices at harvest and prices in the future can be complicated.
“I think in general, farmers understand that if they add space on their farm, they can make more money over time. This gets it down to the amount of money you can receive over a period of years,” explains Davis.
After taking the expected average price spread between harvest price and future selling price, storage costs, wait time costs and other factors into account, the ROI calculator app will tell you how long it could take to recoup an investment in on-farm storage.
Davis says typically, the cost of building additional bins can be recovered in four to five seasons, depending on market conditions.