Annual Cost of Storing Ohio Corn and Soybeans Since 1973

By Carl Zulauf and Eric Richer

The cost of storing the average Ohio corn and soybean bushel since 1973 is examined.  Storage cost is measured three ways:  per bushel, relative to harvest price, and per acre of production. 

All three measures are at or near post 1973 highs as total costs to store corn and soybeans have roughly doubled since 2020 and now exceed $1 per bushel for both corn and soybeans over a 12 month storage period.  This notable increase occurred after a long period (1974-2019) during which declining interest rates and thus interest opportunity storage cost per bushel largely offset increasing physical storage cost per bushel.  These storylines underscored the important role of interest rates and thus interest opportunity cost in offsetting or reinforcing on-going increases in physical storage cost.  The reinforcing role has been especially noticeable since 2020.

Procedures: 

Starting this study with the 1974 marketing year postdates the increase in price variability that occurred in the early 1970s (Kenyon, Jones, and McGuirk).  The study ends with the last complete marketing year, 2024.  Cash price is the average monthly price paid to Ohio farmers by first handlers as reported by USDA (US Department of Agriculture), National Agricultural Statistics Service.  Storage starts in October, the month with the lowest average cash price.  Storage cost includes (a) physical storage cost at commercial facilities to keep the crop in useable condition and (b) interest opportunity cost of storing instead of selling at harvest.  Annual physical storage cost is from USDA, Commodity Credit Corporation through the 2005 marketing year. 

Thereafter, it is for an Ohio country elevator, cross checked with another first delivery point.  Interest opportunity storage cost is calculated by multiplying (a) the October Ohio cash price times (b) the average one year US Treasury bill rate quoted on an investment basis for October as reported by the Federal Reserve Bank of St. Louis.