Steel Products
Excess Corn Crop = More Grain Bin Demand
Written by John Packard
February 13, 2013
SMU noticed the USDA boosted its forecast for domestic supplies of corn this past week. The USDA estimated stockpiles will total 632 million bushels before this year’s harvest. This is a 5 percent increase over the forecast provided by the USDA last month.
We wanted to know how this would affect the steel industry and questioned one of our grain and feed bin sources who provided us with the following information:
An excess corn crop should mean more bin demand. It depends on how many bins are emptied to fulfill demand given the drought impacted harvest of 2012. The farmer will fill existing storage before building new storage even with a bumper crop.
The rains currently will help replenish the ground water tables which will help with the germination of the crops. I don’t think most areas have returned to a normal rainfall level for this time of year. A bigger factor will be how much rain we receive during the growing season this summer. That will determine the size of harvest this fall, and the ultimate demand for additional storage.
So far, we are meeting our forecasts for bin demand each month. We did scale back our forecasts for 2013 based on the assumption there will be existing storage to fill before needing more storage. We are seeing an interest in the large million bushel bins this year again. These bins were introduced in 2011 by some of the manufacturers. Last year sales dropped off as the impact of the drought widened. This year we are seeing more interest in these big bins.
If we get adequate rains this summer, the optimism and interest in bins and Ag equipment should pick up.
John Packard
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