A key element in corn production is proper storage. Does this protect farmers against large price fluctuations and the unpredictability of the wet and dry grain purchase market?
An experienced farmer from the province helped us answer this question. West Pomeranian Voivodeship, who has been running a large farm for years.
The market turmoil has been going on for at least 2 years
Owners of farms specializing in corn production do not have an easy life. They are constantly struggling with the falling profitability of agricultural production, which is decreasing year by year.
The selling price of wet corn in purchases was as high as PLN 1,050 per tonne in 2022. On average, the farm achieved production efficiency of 10 tonnes per 1 ha in 2022. In turn, the costs related to plant production ranged from PLN 5,000 to PLN 6,000. PLN per ha in 2022
To put it simply, the farmer could then achieve income of up to PLN 10,000. PLN per ha of wet corn, with costs ranging between PLN 5-6 thousand. PLN per ha. He could therefore achieve an impressive profit of approximately PLN 4,000-5,000. PLN from 1 ha of cultivation. However, that was about 2 years ago – emphasizes the farmer.
In 2023, production costs remained at a very similar level. Unfortunately, however, this did not determine the profitability of the business.
A year ago we also harvested about 10 tons per hectare. But then sales prices collapsed. With the purchase price not exceeding PLN 430 per tonne of wet corn, farmers had to take into account losses. If they dried it, they had to incur additional costs. Therefore, production in 2023 was unprofitable, while it was still a lucrative business in 2022.
Previous years show that the market is so unpredictable that each farmer can make money on the sale of corn one year, and in subsequent years will be forced to pay extra for the business. What were the purchase prices at the beginning of 2024?
At the beginning of 2024, the price of a ton of wet grain (approx. 30% moisture) ranged from PLN 340 to PLN 450. However, the officially given price differs from the actual one. Sometimes it was only PLN 320/t. In the case of dry corn purchase, the price ranged around PLN 700 per tonne. Some purchase centers do not accept wet grain, only dry grain, says the farmer.
Despite everything, the farmer decided to build a large filling hall with dimensions of 120 m x 24 m. So why, in his opinion, was it worth investing in such difficult times?
Will investing in a corn storage hall guarantee profit from sales?
The optimal situation is one that allows the grain to be dried and stored until the pre-harvest season, i.e. until the grain harvest begins. At this time, corn prices usually reach the highest levels on purchasing markets.
Is it worth waiting until the pre-season?
Few farmers can afford to store corn all year round in order to sell it in the pre-harvest season, the farmer notes. – For example, in 2022, farmers who sold wet corn made money. Those who decided to dry it additionally, using expensive gas, incurred costs of up to PLN 1,300/t. If the farmer stored such dried corn, he could later sell it for approximately PLN 800/t by the end of 2023. This means that he lost approximately PLN 500-600 on each tonne sold.
Therefore, in this business, not only experience is important, but also diversification and risk management related to fluctuations in purchase prices.
Investment in a warehouse undoubtedly helps reduce this risk. Storing dry corn allows the farmer to more conveniently choose the optimal and most profitable time in which to sell it at the best possible price per ton.
When is it better to invest in a hall than a silo for storing corn?
Silos seem to be a cheaper and quicker alternative. So why is it worth investing in a grain storage hall?
If we decide to store dry corn in a silo, it will be damaged during transfer. The use of any type of bucket feeders and redlers will cause mechanical damage, which means that the grain is treated as material unsuitable for sale – emphasizes the farmer. – In the case of a charging hall, grain is transported on belts to prevent any damage. It should be borne in mind that dry corn is more susceptible to damage than wet corn. That's why we decided to invest in a hall.
We can store dry corn for 2 to 9 months. Therefore, it should be borne in mind that such a long storage period requires investment in appropriate solutions, such as ventilation systems and mixing devices – in order to cool it.
Why is it so important to maintain a constant warehouse temperature?
When the temperature of stored corn exceeds 24 degrees Celsius, the grain loses its weight. Even though these differences are small, we feel them strongly financially when selling a huge volume of this raw material – emphasizes the farmer.
To prevent concerns that the corn will lose its properties and weight, the warehouse constructed by the farmer together with WOLF System was equipped with optimal ventilation and cooling systems.
Ventilated and moisture-resistant
In the case of corn storage halls manufactured by WOLF System, the coating of wall and roof sheets is additionally covered with an aluzinc coating, which guarantees high durability and anti-corrosion protection for many years.
Roof fans with constant capacity have been installed in the roof of the corn storage halls, which guarantees adequate air circulation and humidity. Photo. WOLF System
Creating appropriate storage conditions has a significant impact on extending the consumption and feed usefulness of grain. Therefore, roof fans with constant capacity are installed in the roof, which guarantees adequate air circulation and humidity.
Proper ventilation is important in a charging hall where corn with specific requirements is stored. Therefore, supply units with the ability to regulate the air flow were also installed in the walls – emphasizes the WOLF System expert.
WOLF System experts recommend that investors use roofing sheets covered with an anti-condensation membrane. Photo. WOLF System
Another important factor to pay attention to when building this type of halls is preventing excessive water condensation. WOLF System experts recommend the use of roofing sheets covered with an anti-condensation membrane.
An individual approach to investment is the key to satisfaction
WOLF System is a construction company with over 30 years of experience in Poland. The company's distinguishing feature is its comprehensiveness and implementation of various projects
It takes experts from WOLF System about 7 working days to erect a steel structure, a larger warehouse hall. Of course, the working time may be longer depending on the complexity of the structure and the size of the warehouse being built. Photo. WOLF System
An individual approach to each investment is evidenced by careful listening to the investor's needs.
Based on many conversations, local visits and taking into account the farm's future development plans, a project is created, thoroughly discussed and then implemented. The company is flexible because it has its own design department that helps investors from the moment the idea for the facility appears.
Sometimes investors come forward with a ready-made project that is commissioned to be built. This is also one of the models of cooperation offered, even when we are dealing with a large construction site with specific requirements.
This was the case of this charging hall for storing corn, located in the province. West Pomeranian Voivodeship. The impressive size of the facility (120 x 24 m) also required the installation of large-sized gates measuring 6×6 m.
It is also worth noting that during the implementation of this large investment, large-sized gates measuring 6×6 m had to be installed. Photo. WOLF System
Despite difficult weather conditions and the need for an individual approach to individual implementation stages, including the additional installation of a ventilation system and oversized gates, the WOLF System construction team met all these challenges. How does the investor himself evaluate this cooperation?
The hall was built within 4 months, which means the contractor fulfilled the contract very quickly. If we plan to expand our warehouse facilities with further stages, WOLF System will be considered in the first place as one of the leading contractors of this investment – sums up the farmer.