Midwest Grain Harvest So Big
It's Outstripping Silo Space

BRIMFIELD, Ill. —(AP)— Overflow corn at Akron Services is sitting on the ground, forming a rich yellow mountain twice as big around and about half as tall as the squat metal silos that don't have room to hold it all.

It's a scene repeated at grain elevators across Illinois and the Midwest this year, as low prices and a larger-than-expected crop have combined to produce stocks that won't fit in the thousands of silos and storage buildings that dot the nation's corn belt. The last time silos overflowed to this extent was more than a decade ago.

Akron Services manager Alan Knobloch, whose outdoor pile included 300,000 bushels at one point, describes the situation as ``more of an inconvenience than an emergency'' at the moment.

But for farmers, it could also mean there's little hope of significant price increases, at least until the surplus is reduced.

``Certainly, the fact that it's there will have a depressing effect on the market,'' said Steve Scates, Illinois director of the U.S. Department of Agriculture's Farm Service Agency. ``We haven't seen corn piled out on the ground in a number of years. That means that our stocks are fairly high.''

Some of the surplus is corn from last year's harvest that producers held onto in hopes prices would increase. The rest came as something of a surprise to farmers who had feared lower than normal rainfall would significantly reduce yield.

Prices are hovering at about $1.90 a bushel, roughly the same as the government loan rate available on the corn.

The USDA this week estimated that farmers produced 9.5 billion bushels of corn this year. More than two billion bushels of that is expected to still be in storage next season.

``Clearly, with that kind of carryover we would expect that prices are going to continue to hover around the loan rate level the next several months,'' said Darrel Good, a University of Illinois economist.

Tom Jennings, a division manager in the state Department of Agriculture, said more than 40 million bushels of corn were in outdoor storage in Illinois alone as of Nov. 1.

``So far, we've had extremely kind weather for these storage conditions,'' he said.

About 120,000 bushels are piled on the ground outside Tremont Co-Op just southeast of Peoria. Manager Rich Sauder said this is the first time he's had to depend on a ground pile in his 20 years' experience, and he hopes to have it picked up by early December.

``Normally I'm able to ship it out, and we just could not ship fast enough. It's a logistics problem,'' he said.

Depending on weather conditions, especially rainfall, less than five percent of grain stored on the ground is lost, Sauder said. He said the storage facility bears the responsibility for maintaining quality.

``If we have a good experience in storing the grain, there should not be any repercussions. Maybe a little lost sleep for some managers,'' he said.

While the unexpected bumper crop might help keep prices down, it helped some farmers who were able to produce enough volume.

``Considering what we raised and what we can get, it's not going to be a bad year. We were fortunate to have good yields,'' said Mike Schachtrup of Brimfield, who farms about 5000 acres.

But he predicted that smaller farmers and those in less productive areas will feel the crunch next year if prices don't come up.

``There's going to be some people who are going to be forced out of business,'' he said. ``The marginal areas will decrease their acres because they aren't going to be able to compete.''

Good said several factors will influence the future of corn prices. A bad harvest in the southern hemisphere could create more markets for U.S. corn, decrease stocks and help prices along. If nothing unusual happens there, next year's U.S. growing season will become the focal point.

Should the pattern of dry weather experienced this year continue into next season, Good said, that could lead to decreased yield, which could in turn lead to decreased stocks and higher prices.

``What we're really saying is we need some threat to our abundant supply to move prices higher,'' he said.