Table 7. On-Farm and Commercial Storage Costs, Corn, 2003 Crop Year
                     
On-Farm Variable Cost Commercial Cost
Ending Date Physical On-Farm On-Farm Physical
for Storage and Fixed Total Storage and
Storage Shrinkage Interest Total Cost Cost   Shrinkage Interest Total  
--- per bushel---
October 31, 2003 8.8 0.3 9.1 14.6 23.7 17.7 0.3 18.0
November 30, 2003 9.0 1.3 10.3 14.6 24.9 17.7 1.3 19.0
December 31, 2003 9.2 2.4 11.6 14.6 26.2 17.7 2.4 20.1
January 31, 2004 9.4 3.5 12.9 14.6 27.5 19.7 3.5 23.1
February 29, 2004 9.6 4.5 14.1 14.6 28.7 21.7 4.5 26.2
March 31, 2004 9.8 5.6 15.4 14.6 30.0 23.7 5.6 29.2
April 30, 2004 10.0 6.6 16.7 14.6 31.3 25.7 6.6 32.3
May 31, 2004 10.2 7.7 18.0 14.6 32.6 27.7 7.7 35.4
June 30, 2004 10.4 8.8 19.2 14.6 33.8 29.7 8.8 38.5
July 31, 2004 10.6 9.9 20.6 14.6 35.2 31.7 9.9 41.6
August 31, 2004 10.8 11.0 21.9 14.6 36.5 33.7 11.0 44.7
                     
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. Corn shrinkage is assumed in the Kansas State University study to start at one-percent per bushel for the first month of storage and increase at a rate of one-tenth of one percent for each month stored thereafter. 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 2003 as reported in the Agricultural Finance Databook.