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Avalanche of grain piling up on Nebraska ground

Wednesday, Nov 4, 2015

Jim Meuret has seen bigger piles than the golden mountains of corn growing outside elevators across Nebraska once or twice in the 30 years he has been in the grain business, but he can’t tell you when.

“This is certainly one of the top three or four years,” Meuret, co-owner of J.E. Meuret Grain, said during a recent interview.

Farmers are reporting exceptional yields, and mostly dry conditions have made for a quick harvest.

Nebraska’s corn harvest was 75 percent done as of Sunday, well ahead of the 57 percent at the same time last year, according to the U.S. Department of Agriculture’s most recent crop progress report.

The soybean harvest was 97 percent done, just ahead of the 94 percent at this time last year.

Nebraska’s corn and soybean crops are both expected to set records this year.

Farmers are expected to bring in 1.66 billion corn bushels, up 3 percent from last year, with average yield also a record at 184 bushels per acre, up 5 bushels from last year.

Soybean production is expected to be 291 million bushels, which would be 1 percent above last year. Yield is forecast at 56 bushels per acre, up 2 bushels from a year ago.

Even with a steady growth of storage capacity over the past several years, row crops have overflowed about every bin and silo in the state. 

The Nebraska Public Service Commission has approved emergency storage for 77.8 million bushels, the vast majority of it corn and sorghum. That's a 19 percent increase over the 65.4 million bushels approved last year. Soybeans generally have to be stored inside because they are more easily damaged by the elements.

Federally licensed grain merchants in Nebraska, such as the Aurora Cooperative, have applied for about 147 million bushels of temporary and emergency storage this year, down slightly from the 151 million bushels seen last year, according to the U.S. Department of Agriculture.

Lincoln commodities broker Clay Bradley said many farmers are holding onto their corn and soybeans, hoping for prices to tick up and for crop insurance payments to be calculated. When the row crops start to sell, it could go in an avalanche.

On the Chicago Board of Trade Tuesday, December corn ended at $3.81 a bushel and January soybeans at $8.79 bushel.

Bradley said demand for corn remains strong, but the abundant supply being produced this year has kept prices low. Exports also have been weak due to competition from countries like Brazil, Russia, Romania and Ukraine.

Rail and agricultural experts say the tracks that will carry Nebraska's bushels to market are running smoothly and they don’t expect the weeklong delays that plagued shippers two years ago.

“If and when the markets improve, all railroad locations will try to move their product at the same time and create some spot transportation shortages, but overall it seems to be in a better balance this year," said Meuret. "We should be able to move the product, providing the market is there.”

The big question is when farmers will move it, said John Miller, chief of Burlington Northern Santa Fe Railway’s agriculture unit.

“We’re asking shippers all the time: What do you see? Where is the demand? When is it going to pick up? When will the farm decide to sell and is there anything coming we need to be aware of to make sure our resources are aligned properly?” Miller said.

The issue in 2013, he said, was strong growth in all sectors of rail business, consumer products, industrial products, agricultural products, oil and coal. BNSF has invested heavily in upgrading its infrastructure since then.

The company hauled nearly a million carloads of agricultural commodities in 2014, about 10 percent of its total volume last year. Approximately 100,000 carloads of agricultural products, mostly corn and soybeans, originated from Nebraska on BNSF that year.

In the past three years, BNSF invested more than $500 million in Nebraska, including construction of two double-track segments on the Ravenna subdivision, which runs 130 miles from Lincoln to Ravenna.

The company plans to spend $6 billion this year to maintain and upgrade its system.

Other railroads also have been upgrading. Union Pacific has increased its grain hopper fleet by about 10 percent since 2013, adding 1,600 hopper cars from late 2013 through 2014. The company also bought 261 locomotives in 2014, according to company spokeswoman Calli Hite.

Union Pacific had 207,476 rail cars originate in Nebraska in 2014, a 28 percent increase over 2013, when 162,050 originated here.

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