The farmers of Corn have plenty of options in terms of marketing their crop. In addition to choosing a location and time, there are different options related to the amount of moisture content when selling their grain using the grain storage equipment.
If the farmer has a limited drying or storage capacity it is recommended to market the grain as soon after harvesting the field when the moisture levels are high. The processor or elevator in this situation will take grains, weigh them and then convert them into "wet" bushels. After that, the grain is dried to the right degree of moisture. In calculating the net revenue generated by the producer is calculated by weighing the moisture discount factor as well as an estimate of the price at which it is sold. The grain can also be dried by first using Farm shop products before adjusting the volume of shrinkage.
Moisture Discount
If you're using the method of calculating moisture discount and the amount of corn's weight is multiplied by 56 pounds in order to get the amount of "wet" bushels. A moisture discount at a specific percentage of the selling price is calculated on each bushel that is wet. This discount shows the expense for drying grain, as well as the weight loss which has resulted from drying. Weight loss is caused by losing water eliminated during drying. Dry matter loss is also referred to as "handling loss" and the percentage of loss ranges between .064 percent up to 1.33 percent when compared to commercial facilities for drying. While the loss percentage is between 0.22 percent to 1.71 percent when drying the grains in the farms' facilities.
Utilizing the method of calculating moisture discount an appropriate percentage of discount is added to the price of sale instead of wet bushels that are sold in the market.
Drying Cost and Shrink Factor
Another method of estimating costs is charging the farmer directly drying costs of the corn up to the appropriate level of moisture. After that, the shrinking factor is evaluated and adjusted according to the number of wet bushels. This allows the buyer to easily adjust the drying costs in accordance with the actual price of electricity and fuel.
On-farm Drying
Many corn farmers prefer drying their corn on their own farms, using Farm Shop products. This gives the farmers the option of storing the grain in the facilities that they own and avoiding bottlenecks when selling the grain at harvest. When drying the grain at the farms, there's the need for additional transportation in order to deliver the product to the purchaser. Additionally, the drying process on the farm may not be a big capacity when compared with the elevator.
The cost of drying on-farm is determined by the following:
- the drying equipment used by the producer
- The moisture content to be eliminated,
- the temperature at the moment and relative humidity, as well as
- The price of electricity and fuel.
In contrast, in the event that you have to choose between drying the corn on your farm or sending it wet to the elevator to sell it, only the variable costs are taken into consideration to dry. While the costs of ownership associated with depreciation, interests, and insurance, etc. remain the same. Variable costs include repair costs and maintenance, as well as the cost of managing the dryer as well as grain storage equipment, etc. However, the main expense is the cost of energy and fuel used to dry the grain.
Field Drying
A number of producers of corn have chosen to dry their corn organically in fields prior to harvest. This is an economical method and lots of expenses can be saved when compared to drying the crop artificially. However, this method can slow harvesting and cause further losses in the field since the ears and stalks become drier. So, the farmers must take into consideration the costs of this process together with potential drying costs and discounts. Loss of harvested may differ depending on the hybrid that is planted. While the corn has been dry in the field farmers still have the choice between farm drying or drying in the field.
Important to remember is that as more water is removed by drying your field, the effect of artificial drying costs as well as moisture are less when calculating the net income generated. Producers must understand the costs of the drying process in addition to the availability of grain storage equipment facilities on the farms and in the elevator prior to choosing the drying process to be employed for corn prior to selling them in the markets.
