Table 8. On-Farm and Commercial Storage Costs, Soybeans, 2002 Crop Year
                     
On-Farm Variable Cost Commercial Cost
Ending Date Physical On-Farm On-Farm
for Storage and Fixed Total Physical
Storage Shrinkage Interest Total Cost Cost   Storage Interest Total  
--- per bushel---
October 31, 2002 8.0 0.7 8.7 14.6 23.3 13.0 0.7 13.7
November 30, 2002 8.0 3.5 11.5 14.6 26.1 13.0 3.5 16.5
December 31, 2002 8.0 6.4 14.4 14.6 29.0 13.0 6.4 19.4
January 31, 2003 8.0 9.4 17.4 14.6 32.0 15.0 9.4 24.4
February 28, 2003 8.0 12.0 20.1 14.6 34.7 17.0 12.0 29.0
March 31, 2003 8.0 15.0 23.1 14.6 37.7 19.0 15.0 34.0
April 30, 2003 8.0 17.9 26.0 14.6 40.6 21.0 17.9 38.9
May 31, 2003 8.0 20.9 29.0 14.6 43.6 23.0 20.9 43.9
June 30, 2003 8.0 23.9 31.9 14.6 46.5 25.0 23.9 48.9
July 31, 2003 8.0 26.9 34.9 14.6 49.5 27.0 26.9 53.9
August 31, 2003 8.0 30.0 38.0 14.6 52.6 29.0 30.0 59.0
                     
Note: Estimates of the on-farm variable and fixed costs of physical storage are drawn from a study conducted at Kansas State University (Dhuyvetter, Hamman and Harner, 2000). The estimates assume storage occurs in a 25,000 bushel round metal bin. The first component of on-farm physical storage is a flat charge of 6.7 cents per bushel for conveyance, aeration, insecticide and repairs. The second component of on-farm physical storage is shrinkage. Since the Kansas State study did not estimate shrinkage costs for soybeans, agricultural engineering specialists at the University of Illinois and Purdue University were consulted. The resulting estimate for soybeans is a constant 0.25 percent shrink factor. The cost of shrink is based on the harvest price. Commercial storage costs are drawn from an informal telephone survey of nine central Illinois elevators. Interest opportunity costs are the same for on-farm and commercial storage, and are computed as the harvest price times the interest rate compounded daily from the end of harvest to the date of sale. The interest rate is the average rate for all other farm operating loans for Seventh Federal Reserve District agricultural banks in the fourth quarter of 2002 as reported in the Agricultural Finance Databook.