Renting grain storage
When there’s a big crop to harvest, a choice between buying and renting grain bins needs to be made.
If producers have enough storage for normal crops, they may prefer to rent space if they can. In situations like this, a common question emerges about how much grain bins should rent for.
“Using current prices for bins and interest rates, with an allowance for risk added, means a rental charge of 12 to 16 cents per bushel for reasonable sized bins,” says Ted Ford, financial management specialist with Alberta Agriculture.
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“Smaller bins cost more per bushel of capacity, but require more labor to fill and unload so they rent for less. Little wooden bins would not attract very much for rent because of the labor involved in using them.”
A hopper bottom on a bin may add another three to four cents a bushel, but provides additional storage and convenience.
“In the end, it will be supply and demand in any area that will determine the rental rate,” says Ford. “When there’s lots of demand the rental rate will creep up. When there is less demand, rental rates drop.”
Rental opportunities for the rest of the year are virtually eliminated if a bin is rented out during the harvest season. The bin owner would want rent for a full year so the renter might as well use the storage space for a while.
Alberta Agriculture farm management specialists can be contacted for further information on grain storage rental and other custom rates.
– Alberta Agriculture
