ASFMRA Blog - 2020 Journal Article: Corn and Soybean Returns to Storage

2020 Journal of the ASFMRA Article

Indiana Corn and Soybean Returns to Storage

30-Year (1988–1989 to 2017–2018 Crop-Marketing Years) Indiana Average Net Returns to Storage for Corn by MonthOn-farm storage is a common merchandising tool. However, information regarding optimal storage strategies remains incomplete. A recent study sought to provide farm managers a better understanding of the opportunities for earning storage returns and the strategies for doing so that best fit their operations by evaluating historic returns to storage for corn and soybeans in Indiana.

Results indicated that storing corn and soybeans on-farm in Indiana can be a profitable merchandising strategy. Furthermore, results suggested that farm managers should consider employing a portfolio of marketing strategies since it is not possible to predict with certainty which individual strategy will generate the highest returns in a given year. Using a portfolio of marketing tools, including unhedged storage, simple storage hedges, and rolling hedges is recommended to capture upside potential and spread out risk.

In practice, however, every year is different. Farm managers must read storage signals in a given year and adjust their strategy accordingly. While the empirical application of the paper focused on a case study of Indiana, the strategies described and implications of the results are widely relevant for farm managers throughout the Midwest and beyond.

The authors included Timothy G. Baker, Aaron J. Edwards, Christopher A. Hurt, James R. Mintert, and Nathanael M. Thompson.

The full submission, entitled “Indiana Corn and Soybean Returns to Storage,” may be found in the 2020 Journal of the ASFMRA. The Journal includes an additional 18 articles on topics as wide ranging as:

  • Decision-making patterns for U.S. producers
  • Potential for genomics and impact on ranch profitability
  • Farmland investment
  • Impact of weather fluctuations and quality effects on land price trends
  • Pricing on seed corn and nitrogen fertilizer
  • Much more

If you are interested in having an article published, please review the Manuscript Guidelines. Manuscripts may be submitted to the ASFMRA at publications@asfmra.org.

PICTURED: 30-Year (1988–1989 to 2017–2018 Crop-Marketing Years) Indiana Average Net Returns to Storage for Corn by Month

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