As fuel prices rise, so do grain drying costs

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PRINCETON, Ky. – With the corn harvest at hand, farmers may be considering how long to let their corn dry in the field before moving into grain bins. Whatever approach they take can be costly.

Natural and liquid propane gas prices have escalated from a year ago. Yet, leaving it in the field to dry can mean losses in the amount of grain harvested, especially in fields suffering from insect damage, said Sam McNeill, an agricultural engineer with the University of Kentucky Cooperative Extension Service.

Now and then. A survey of LP gas prices in central and western Kentucky shows a range from 86 cents to $1.09 this year compared to 65-90 cents a year ago or about a 25 percent increase on average. In comparison, natural gas prices are about 43 percent higher than a year ago.

Some farmers, who have the option of using either natural or LP gas, may want to consider which fuel source is their best option, McNeill said. Traditionally, natural gas has been about two-thirds the cost of liquid propane on a net energy basis, but today that may not be the case.

For example, if propane costs 92 cents per gallon and the price of natural gas is above $10 per 1,000 cubic feet, then LP gas is the better energy buy. Conversely, if natural gas is $8 per 1,000 cubic feet and LP gas is above 74 cents per gallon, then natural gas is the best option.

Conversion factor. An equivalent energy cost of LP gas can be found by dividing the price of natural gas by 10.87. If LP gas is priced above the equivalent energy price, then natural gas is the better buy and vise versa, he said.

A fuel cost comparison spreadsheet has been designed by McNeill and is available via the Internet through the UK College of Agriculture’s biosystems and agricultural engineering department’s Web site at www.bae.uky.edu/smcneill.

Most farmers won’t have a fuel option and for those the decision comes down to how long to allow for natural field drying. The answer depends largely on harvest capacity, dryer performance, the price of corn and drying energy (gas and electricity) and labor costs. But the trade-off often boils down to weighing the cost of excess harvest losses against energy costs for drying, McNeill said.

Excess losses are those incurred by leaving the crop to dry in the field and can be 2 percent to 8 percent above normal loss levels of 1 percent to 2 percent that have been reported for timely harvest.

Plenty to consider. To evaluate their harvest decision, producers need to look at typical yield levels, harvest losses and corn prices at a fixed drying cost for their operation, he said.

For instance. For example, consider a potential corn yield of 150 bushels per acre, excess harvest loss of 5 percent above normal losses of 1.5 percent and a selling price of $2.50 per bushel. The value of the extra corn left behind in the field, 7.4 bushels, is $18.50.

Comparing this figure with the cost of artificial drying shows that $13.32 per acre is needed to remove 5 points of moisture from a bushel of corn. So, the economics for this situation favors heated airdrying.

On the other hand, if corn moisture must be dried by 10 points and all other figures remain the same, the cost of drying increases to $26.65, which is $8.15 per acre more than allowing it to dry in the field.

Based on different scenarios compiled by McNeill, field drying may be the least cost option for all yield levels and corn prices if harvest losses are no more than 2 percent above normal levels. Conversely, if harvest losses are much above normal, greater than 8 percent, then heated air drying for 5 points of moisture is highly favored for all yield levels and grain prices.

Finally, at a medium harvest loss of 5 percent, energy costs for drying 5 points of moisture are lower than the value of the crop left in the field for all yield levels and corn prices. Artificial drying becomes more favorable as price and yield levels increase.

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