Latimer, Iowa (north central) | Remember when figuring out costs to look at the cost of the entire drying system not just utility costs. Utility costs may be .01-.015 per point but the costs of building the bins and dryer are not included in that number.
Our utility costs are .008 per point on natural gas, 3 phase, drying 400,000 bushels per year, much of that early with higher ambient temps with a large mixed flow dryer and lower heat. Add in a few million for bins though and costs are much higher.
Bins and all support equipment (augers, tractors, dryers, legs, pits, site, rock, whatever, etc) are going to run $3.00-$5.00 per bushel to build. $4.00 per bushel at 7% interest is .28 cents weather you are drying 3 points or 10 points. Depreciation on bins/equipment will be another .30 cents per bushel. Used bins and dryers have minimal residual value. Shrink in bins is also a real deal.
If you are handling small quantities, that 16 cents with no shrink and no additional costs isn't the end of the world. Say your corn averages 19%. 4 points times 10 cents (shrink adjusted) is $.40. It would be easy for you to have $0.64 (.58 cents plus another 6 cents for utilities) cents in doing it yourself.
If your market rewards carry/basis at a number more than the costs of carry that is another conversation. It takes alot of volume and markets that reward storage well to make bins work. The largest farms, paying the highest rent, purchase prices for land, in our area, haul their grain straight to elevators in town. |
Corn drying costs
