Guide looks at costs of on-farm grain storage

ALTHOUGH the prospect of higher grain prices can be attractive, investing large sums of money in on-farm grain storage may, in certain circumstances, prove a costly mistake.

ProAdvice consultant Chris Warrick said farmers should take a broad range of factors into account before investing in grain storage.

"You need to work out exactly how much the storage could earn and compare that to expected returns from other farm business investments, such as buying more land, a chaser bin, a wider boomspray, a second truck or paying off debt," Mr Warrick said.

The GRDC has put together a guide containing questions and equations relevant to grain storage.

A step-by-step template is included to help farmers work out the potential financial gains, such as marketing, harvest timeliness and freight savings from carting grain direct to port after harvest.

It also contains calculations to work out the fixed costs of on-farm storage, such as the annualised capital costs of all the infrastructure, site works, concrete and equipment, as well as the opportunity cost of capital, as well as variable costs including hygiene, cooling and insect treatment.

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Topics:  grains

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