As of this writing winter wheat harvest is in full swing and spring wheat right around the corner. Presently yields appear to above average, with good quality and varying levels of protein content. The increase in production has added to both the domestic and a global glut of wheat, causing the prices to dip to levels we have not seen in some time. This makes understanding the true value of your grain more important than ever.
For purposes of this conversation I am going to focus on wheat because there are a few more components to the cash price per bushel. When evaluating what the best possible market for your commodity, there are a few things to consider.
Premiums/Discounts - Make sure that you look beyond just the cash bid. Protein scales are the biggest factor as premiums/discounts can add up to significant amounts and not all locations are equal. Protein scales can also change throughout the season as the quality and size of the crop becomes known. Along with protein there can also be other quality factors that can change the value as well like moisture, ergot or vomitoxin levels.
Freight - Understand what it costs to move your production to market. This cost can vary by things like fuel, wear and tear on your truck, time, etc. But the bottom line is that the farther you haul the more it will cost.
- Storing - What does it cost? Whether you are storing it commercially or on the farm, there are costs involved. Some things to think about if you are storing it yourself are: shrink, handling, additional freight to and from the bin as well as the cost of money. Along with those factors also consider whether you are earning the most from your bin investment - am I using it as a way to stay long the market or am I capturing the market carry? Am I recovering enough return to offset the risk of changing grain quality and cost to keep it in marketable condition?
If you do decide to store wheat or any other commodity, the Wheat Growers Bin Power Probe is great way to understand what you have in your bin. Wheat Growers will come out to your bin and collect a representative sample from all levels of your bin- not just the top, bottom or what runs out the door. Once a sample is collected you will receive an analysis of the grain sample along with a no-obligation quote.
If you have interest in the Bin Power Probe or need additional information, please contact your local Wheat Growers location or Wheat Growers Grain Marketing Specialist.