11/11/2023 0 Comments National average of value of farm siloThe annual depreciation (percent) of a grain bin with an expected useful life of 25 years is 4 percent (100 percent divided by 25 years equal 4 percent per year). Table 1 shows the expected useful life of grain storage and drying equipment. It is a way of spreading the cost of the grain bin over its expected useful life. The most significant ownership costs are:ĭepreciation is the portion of the original cost of the grain bin that is counted as an expense each year. The farm storage rate is estimated to range from 10 cents (15 x 2 / 3 = 10) to 21 cents (28x 3 / 4 = 21). This amounts to a six-month commercial rate of from 15 cents (9 + (2 x 3 mo.) = 15) to 28 cents (16+ (4x 3 mo.) = 28). A typical rate is an initial charge of 9 to 16 cents per bushel for the first 3 months of storage and an additional charge of from 2 to 4 cents per bushel for each additional month. For example, to compute a farm storage rate for corn for six months, first identify the commercial rate. Nevertheless, commercial storage rates serve as an unbiased indicator of storage costs that reflect current supply and demand for grain storage.Ī suggested rental charge for farm corn storage is about two-thirds to three-fourths of the local rate for commercial storage. Farm storage rates tend to be below commercial rates because the renter must provide labor, manage the grain in storage, and assume the risks of spoilage and shrinkage. So farm storage rates can be based on commercial rates minus an appropriate discount. In some cases grain storage rental is available from a commercial source (elevator) at an established price. ![]() ![]() ![]() Average grain storage rental rates can be found in the Farm Building Rental Rate Survey (North Central Farm Management Extension Committee) and AgDM Information File A3-10 Iowa Farm Custom Rate Survey. Remember, the fixed location of buildings often narrows the market to only a few prospective renters.Įstimating a fair rental value for farm grain storage can be based on:Ī common method is to charge a rental rate similar to what others are charging. Is there a simple and uniform method of figuring a rental rate for farm grain storage? Some useful guidelines are outlined below.
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