Store or sell grain: the price storage has to beat
Put in today's price and what storing costs you. This works out the price you would need later just to break even, month by month. It does not predict prices.
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Commercial storage, or your own bin's running costs.
Fine-tune
What the money would cost or earn if you had it now, for example your operating loan rate.
Grain lost or downgraded while stored.
Aeration, extra handling or trucking later.
Break-even price, month by month
| Stored for | Break-even price | Above today |
|---|
How the break-even price is worked out
Storing grain costs money in three ways: the storage itself, the interest on money you would otherwise have now, and grain lost or downgraded along the way. The break-even price is the price that covers all three:
(price now × (1 + interest × months ÷ 12) + storage × months + other costs) ÷ (1 − loss)
With canola at $650 a tonne, stored six months at $1.50 a tonne a month, 7% interest and a 0.5% loss, that is (650 × 1.035 + 9) ÷ 0.995 = $685.18. The price has to rise by about $35 a tonne, or 5.4%, before storing beats selling today.
Storing only works for grain that isn't already owed. Check what is still due on your contracts against what is in the bins (how to track grain contracts) and how much the bins hold (bin capacity calculator). If the grain is above base moisture, the shrink calculator shows what that costs at delivery.
Questions
How do I know if storing grain is worth it?
Work out the break-even price: today's price plus storage, interest and expected shrink over the months you would store. Storing only pays if you expect to sell above that price. This calculator works out the break-even; it does not predict whether prices will get there.
What does storing grain actually cost?
Three things: the storage itself, the interest on money you would otherwise have now, and grain lost or downgraded while stored. On $650 canola, six months at $1.50 a tonne a month, 7% interest and 0.5% loss adds up to about $35 a tonne.
Should I count interest if I have no loan?
Yes. Money tied up in grain could be paying down debt or earning interest elsewhere, so it has a cost either way. Use your operating loan rate, or what the money would earn.
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Sources and method
Method: the break-even is today's price grown by simple interest for the months stored, plus storage for each month and any other cost, divided by what is left after shrink.
It does not forecast prices or say whether to store; it only shows what waiting has to earn.
Check a grain settlement from a photo
Upload a photo or PDF to see the settlement's figures explained and checked. Add the contract to compare its price, grade and freight.
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