The pitfalls of “free” storage

By Jon Scheve, Superior Feed Ingredients, LLC

I’ve written several newsletters in the past about the negative price impacts “free storage,” “delayed pricing” or just “free” DP have on farmers. Every year many farmers thank me for giving them ideas on how to explain to other farmers why free storage isn’t really free and why they shouldn’t use it.

Usually, I address this issue after the free storage programs start; however, this year I thought I would try a different strategy and remind farmers of the negative effects of “free” DP ahead of time. With corn prices below breakeven values, farmers need to do all they can to get the best price possible, and “free storage” is NOT going to help anyone. 

Preventing the use of “FREE” storage 

Soon end users will start to offer “free” storage to farmers. While some also call it “price later opportunities,” “delayed pricing” or “DP” it refers to when farmers sign over their grain to an end user or commercial facility, and then wait to price the grain later, hopefully at higher values.… Continue reading