By Andi Anderson
A new analysis of U.S. corn and soybean storage returns since 1973 shows that storing crops after June rarely generates profit. The study, conducted by farmdoc daily researchers, found that net returns to cash and futures hedged storage ending before June are statistically near zero, meaning they just cover total storage costs.
Despite limited returns, the findings support investments in on-farm storage. On-farm systems improve overall profitability by allowing faster harvests, reducing weather-related losses, and offering greater flexibility in post-harvest marketing.
The study noted that while both crops showed minimal profit potential, soybean storage delivered slightly higher average returns than corn. This aligns with long-term trends showing stronger consumption growth for soybeans, which often supports better price recovery.
Data show that average U.S. cash corn prices since 1973 have remained nearly equal in October and November but typically rise through June before declining later in the year.
For soybeans, prices also peak around June, averaging about 111% of the October low. However, both crops see notable price declines after mid-summer, making late storage less rewarding.
When adjusted for costs such as interest, storage fees, and trading expenses, neither cash nor futures hedged storage produced significant net profits over the 51-year study period. Futures hedging offered less income potential but reduced risk, especially during longer storage periods extending beyond January.
Researchers compared their findings with previous studies, all of which reported similar patterns — soybean storage tends to yield slightly higher returns and lower risk under hedging strategies. These results suggest that while large profits from storing grain are rare, strategic storage and on-farm management continue to play vital roles in farm profitability.
Overall, the long-term data reinforce that cash storage after June is generally not profitable, but the operational advantages of on-farm storage still make it a valuable asset for U.S. farmers.
Photo Credit: gettyimages-dszc
Categories: Illinois, Crops, Corn, Soybeans