Grain Storage Serious Concern
In Midwest As Harvest Comes In

LINCOLN, Neb. —(AP)— With much of last year's grain harvest still in storage, Midwest farmers are in a near panic about where to keep their expected bumper crops.

"There is a world glut of grain with no place to go," said Pat Ptacek of the Nebraska Grain and Feed Association. "We're looking for any available storage — whether it's airplane hangars, warehouses — anything with a roof."

The scenario is being played out in every farm state as the U.S. Agriculture Department predicts record and near-record corn and soybean crops.

Last year, rail gridlock, driven by Union Pacific Corp.'s takeover of Southern Pacific Rail Corp., stranded Midwestern crops.

Much of last year's crops are still in storage because of stagnant demand overseas, brought on partly by the Asian economic crisis and partly by numerous U.S. embargoes against other countries.

To make matters worse, commodity prices are the lowest in years.

"Nobody was prepared for a double whammy," Ptacek said. "It's going to get real ugly."

The state of Kansas is trying to find warehouses, old airstrips and even National Guard armories to store grain. The state also is considering leasing state equipment to grain elevators to help pile grain on the ground, said Tom Tunnell of the Kansas Grain and Feed Association.

Iowa has already given some facilities permission to dump grain on the ground.

"We're going to have trouble," said Donna Gwinn of the state Department of Agriculture and Land Stewardship.

The Agriculture Department last week forecast U.S. corn production at 9.74 billion bushels, which would be the second-largest crop on record and two percent above the August prediction. Nebraska's corn production, based on Sept. 1 conditions, is forecast at 1.24 billion bushels, up three percent from the Aug. 1 forecast.

The Agriculture Department forecast this year's U.S. soybean harvest at a record 2.91 billion bushels. Nebraska soybean production is forecast at a record 183.8 million bushels, up nine percent from the August forecast and 30 percent above 1997.

"We are looking at potentially ... a 100 million to 200 million bushel shortage of storage capacity" in Nebraska, Ptacek said.

The Nebraska Grain and Feed Association is coordinating with private companies and the state to compile a list of possible temporary storage sites around the state.

Tim Troyer, who farms corn and soybeans near Milford, said he probably will have to sell his crop at a loss rather than try to find and pay for storage in the hope that prices increase.

"We don't have much choice," he said. "You get 15 days free storage down at our local elevator; then it's 12 cents a bushel" to store it until the end of the year.

Compounding the problem is that Nebraska has lost facilities that had a total storage capacity of 450 million bushels in the past 10 years, according to the Nebraska Agricultural Statistics Service.

Ptacek said some large grain silos in such cities as Omaha and Lincoln have closed as those cities have grown.

"They've been pressured to close through the loss of rail service, through neighborhood complaints or through city ordinances that discourage truck traffic," he said.