Grain Elevators Facing Tighter Margins in 2020

Dec 23, 2019 at 10:15 AM CST
Grain elevators face significant challenges in the year ahead as they buy basis on corn, soybeans, and wheat at the highest levels seen in years. Basis for all three of the major grains is significantly tighter across the country from strong end-user bids, limited pipeline supplies, and lack of farmer selling amid an uncertain fall harvest, according to a new report from CoBank’s Knowledge Exchange division. “In addition to having to buy more expensive basis, grain elevators are being compelled to offer farmers a range of incentives to sell bushels,” said Tanner Ehmke, manager of CoBank’s Knowledge Exchange division. “Lower rates on storage, free delayed pricing, and free grain drying are among those incentives, which are eating into the elevators’ revenues.”

Dec 23, 2019 at 10:15 AM CST

Grain elevators face significant challenges in the year ahead as they buy basis on corn, soybeans, and wheat at the highest levels seen in years. Basis for all three of the major grains is significantly tighter across the country from strong end-user bids, limited pipeline supplies, and lack of farmer selling amid an uncertain fall harvest, according to a new report from CoBank’s Knowledge Exchange division. “In addition to having to buy more expensive basis, grain elevators are being compelled to offer farmers a range of incentives to sell bushels,” said Tanner Ehmke, manager of CoBank’s Knowledge Exchange division. “Lower rates on storage, free delayed pricing, and free grain drying are among those incentives, which are eating into the elevators’ revenues.”