Is now the time to be thinking more about on-farm storage?

By Eric Richer, Ohio State University Extension, Field Specialist, Farm Management

With harvest here or nearly here, now might seem like an odd time to be thinking about adding more on-farm storage. It seems unlikely that unscheduled grain bin construction will be added before the 2026 harvest, but could this harvest be used to answer key questions about bin size, layout, and cost? Answers to these questions will require intentional thought and planning before scheduling potential new bin construction. This article will focus on the economic benefits of on-farm storage.

Recent Ohio harvest seasons have demonstrated how quickly market conditions can change. In some years, large crops have led to long elevator lines, transportation bottlenecks, and limited delivery opportunities. In other years, drought-reduced production has resulted in very different market dynamics. These changing conditions reinforce the importance of evaluating grain storage economics annually rather than relying solely on past experiences.

When discussing grain storage, farmers often focus first on the opportunities to capture higher prices later in the marketing year. Historically, corn futures markets frequently provide a positive carry from harvest into late winter or spring. Looking at recent years, a conservative estimate of futures market carry from harvest to March is approximately 25-28 cents per bushel. While futures spreads vary significantly from year to year, carrying grain into later contract months may provide additional revenue opportunities.

Basis improvement is another potential benefit. In many Ohio markets, basis tends to weaken during harvest, when supplies are abundant, and to strengthen throughout the winter and spring as grain moves out of storage and processors continue to need supplies. Historical Ohio data suggest producers may conservatively expect about 10 cents per bushel of basis appreciation between harvest and late winter, although local market conditions will vary.

On-farm storage can also help producers avoid commercial storage charges. Using current Ohio custom farm rate surveys, commercial storage costs average approximately 11 cents per bushel per month, while on-farm storage costs average about 5 cents per bushel per month. Over a six-month storage period, that difference can add up quickly. Commercial storage rates have risen substantially in recent years, making ownership of storage facilities more attractive for many operations.

However, some of the most valuable benefits of grain storage extend beyond direct marketing gains. Farmers frequently cite harvest efficiency as one of the biggest advantages of having bins on the farm. When grain can be unloaded nearby instead of hauled to a local elevator or end user, combines spend less time waiting and more time harvesting. In recent Ohio State University Extension meetings, producers estimated the value of harvest efficiency and reduced trucking during harvest at approximately 24 cents per bushel.

Delivery flexibility also provides meaningful value. Storing grain on the farm allows producers to deliver when labor and trucks are available, elevators are less congested, and buyers are offering stronger bids. Producers surveyed at the same Ohio State University Extension meetings placed an average value of about 22 cents per bushel on this flexibility. Having the ability to target ethanol plants, processors, ports, feed mills, or other end users year-round can create marketing opportunities that are difficult to reach during harvest.

When these benefits are combined, the numbers become significant. A conservative analysis suggests that futures carry (25 cents), basis improvement (10 cents), harvest efficiency (24 cents), and delivery flexibility (22 cents) can provide a total benefit of approximately 81 cents per bushel. After subtracting six months of on-farm storage costs estimated at 30 cents per bushel, the average annual net gain is roughly 51 cents per bushel.

It should be noted that on-farm storage has disadvantages. First, it requires a farmer to handle the grain at least two more times on the farm before delivery, which can cause additional damage and require additional labor for unloading and hauling. Second, and maybe most important, on-farm storage can enable a farmer to be a very passive grain marketer. Finally, there are cash flow constraints of the investment and annual operating costs.

Of course, on-farm storage is not free. A recent Ohio case study examined a 70,000-bushel dry storage system that included a concrete foundation, a full-aeration floor, fans, unloading equipment, a spreader, and safety features (no site prep, electrical, or monitoring costs included). Similar projects in 2026 were quoted at approximately $200,000, or about $2.85 per bushel of storage capacity. Note: key inputs such as steel, concrete, copper, and labor can vary with market conditions.

Using conservative assumptions, a 10-year financed storage project costing about $3.97 per bushel after interest could require roughly 7.8 years to repay under the above-average annual net gain assumptions. Lower interest financing options, such as USDA Farm Storage Facility Loans, can shorten repayment periods. Operations paying cash may experience even faster payback periods due to lower financing costs and potential tax advantages.

Before harvest begins, every producer should carefully evaluate both the benefits and costs of storage in the context of their own operation. Storage can improve marketing flexibility, increase harvest efficiency, and create long-term value. Use this harvest season to understand your farm’s storage cost-benefit analysis and incorporate it into a plan as you consider the size and layout of a potential new grain bin.