Carry Decision & Sell at Harvest or Store?

It answers whether to sell at harvest or store the grain and sell later. It builds your total cost of carry per bushel — interest on the tied-up value, physical shrink, quality-discount risk, facility cost and one-time handling — and compares it to the market carry, the price gain you expect by deferring the sale. If the market carry exceeds the cost of carry, storing pays; if not, selling at harvest is the better move.

Per bushel after m months: interest = harvest price × annual interest × (m/12); shrink = harvest price × shrink rate per month × m; quality loss = harvest price × quality-discount rate × m; facility = facility cost per bushel-month × m; plus a one-time handling charge in and out. Summed, that is the total cost of carry, and the deferred price must beat harvest price by at least that much to break even.

Market carry is the difference between the deferred (futures or expected cash) price and the harvest price — the reward the market offers for holding grain. Cost of carry is what it actually costs you to hold it. Storing only pays when the market carry is larger than your cost of carry. The tool plots both as lines over the months so you can see exactly where the market reward overtakes the holding cost.

It is the price the grain must reach later just to cover the cost of carrying it — harvest price plus the total cost of carry per bushel. If you cannot realistically expect the deferred market to reach that price, storing destroys value and you should price at harvest. The break-even price rises every month you hold, because interest, shrink and facility costs keep accruing.

It is the storage duration at which the accruing cost of carry equals the linearly-accrued market carry — the crossover on the chart. Before that month, the cost of carry is still ahead and storing loses; after it, the market carry pulls ahead and storing pays. If the per-month cost of carry exceeds the per-month market carry, there is no break-even month and the tool reports 'never'.

Shrink is the dry-matter, moisture and handling loss that occurs while grain sits and moves — you take fewer sellable bushels out than you put in, and you sometimes over-dry to store safely. That lost quantity has value at the current price, so it is a real per-month cost of holding. Wetter grain and more handling raise shrink, which is why the rate differs by commodity in the table below.

Use the option that matches where the grain will sit. On-farm bins carry a lower per-bushel-month facility cost (you own the bin) but still cost interest, shrink and quality risk. Commercial elevators charge a higher monthly rate but remove the bin investment and management. The tool swaps the facility cost when you toggle storage type, so the comparison stays honest for your situation.

Substantially. Interest is often the largest single component of the cost of carry, because it is charged on the full value of the grain — at 8% on $5 corn over six months that is about 20 cents a bushel before any other cost. When interest rates are high, the bar for the deferred price to clear is higher, and storing pays less often. The tool lets you enter your real loan or opportunity-cost rate.

The shrink, quality-discount, handling and facility rates by commodity are representative figures drawn from the University of Illinois farmdoc grain-storage framework, Kansas State Extension MF-2474 'Grain Storage Costs', and Iowa State Ag Decision Maker File A2-35. They are typical planning values; adjust them to your own grain quality, drying and facility if you have better numbers.

That is speculation, not carry. The carry decision assumes you have a deferred price target you can actually lock — a forward contract or futures hedge. Storing unpriced grain on a hunch adds price risk on top of the storage cost, and if the market falls you lose both. Best practice is to store only when the carry is in the market and you can capture it with a hedge.

Sometimes, through basis. Even with a flat futures price, the local cash basis often strengthens after harvest as the glut clears, and that basis gain is part of the market carry you capture by waiting. Enter your realistic expected deferred cash price — which embeds both futures and basis — as the deferred price, and the tool will tell you whether the combined carry beats your cost.

Enter the bushels you are deciding about; the per-bushel figures do not change with quantity, but the total net gain or loss does. Seeing the whole-lot dollar figure — net gain per bushel times bushels — often clarifies the decision better than cents per bushel, because a small per-bushel edge on a large lot is real money, and a small per-bushel loss on a large lot is a real leak.