Macroscope | Bumper harvest amid global supply glut sees US grain warehouses run out of space

US grain warehouses are filling up so fast with a bumper harvest that they are storing soybeans and corn out in the open despite the risk of damage and even refusing crops from farmers without binding contracts.

The scramble shows that even in the third year of a global supply glut the exceptional yields and weaker than expected US exports still wrong footed some farmers, storage operators and traders, meaning the outlook for farm incomes and prices might get even bleaker than now painted by official forecasts.

Growers, still hoping to wait out the downswing, want to store as much of their crops as possible, but warehouses are rejecting spot deliveries because of a lack of space, in some cases for longer than farmers can remember.

“We’re out of storage,” said Richard Guse, a Minnesota farmer who also co-owns a grain elevator. “Our next best option is to find a place to sell it, so you get that harvest pressure.”

Minnesota, Iowa and Nebraska, which account for a third of US corn and a quarter of soybean output, have produced record yields thanks to near-perfect conditions after some bad weather early in the growing season suggested yields could drop.

As a result, farmers in southern Minnesota are getting paid about 15 US cents less per bushel for their corn and soybeans than they would if there was enough space, estimates Ed Usset, grain marketing economist for the Centre for Farm Financial Management at the University of Minnesota.