New grain bin in Red Wing part of growing storage trend

December 2, 2018

RED WING — A new conditional-use permit passed by the Red Wing City Council on Monday will give Red Wing Grain an additional 1.3 million bushels of grain storage capacity.

“We serve over 1,200 farm customers in a 75-mile radius,” said Jim Larson, owner of Red Wing Grain. “Last year, with the lack of China exports, there’s a lot of uncertainty in our business.”

The expansion is just the latest addition for the company. With its downtown facility long landlocked, the company opened a new western location at Cannon Bottom Road in 2006 with a grain bin, then expanded that site with a bunker in 2011. Now, the company plans to add another grain bin at the site.

Dan Rogness, the city’s community development director, said the new bin will be the same as the first one at the Cannon Bottom Road site, essentially doubling storage. The bunker also can hold grain long term.

“Currently, there is over 600 million bushels of commercial grain elevator storage in Minnesota and another 2 billion bushels of grain storage space on-farm in Minnesota,” said Bob Zelenka, executive director of the Minnesota Grain and Feed Association in Eagan.

Most of the storage capacity is full, he added, mainly due to this fall’s crop yields and the Chinese tariffs.

Richard Eustice, president of Janesville Elevator Construction Inc., said most new storage capacity is not being built at commercial elevators but on farms.

“We’ve seen quite a bit more activity on the farm end,” he said. “There’s a few commercial guys putting things up, but most is on-farm storage.”

With elevators charging per bushel per month of storage, a farmer who is waiting for prices to go up can lose a lot of his or her profit in elevator charges on a hundred-thousand bushels, Eustice said.

“(An on-farm bin) pays for itself after a few years,” he said.

While most on-farm bins have historically been built for corn storage, Eustice said he’s seen a small shift toward storage of soybeans due to the tariffs causing trade wars with China.

“They want to hold out for a better price,” he said.

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