Save the Grain – Grain Bagging
In recent years farmers have invested in steel grain bins to store grain until well after harvest season and sell when prices go back up. With insured farmers storing more grain, it increases the exposure for both the insured farmer and also for the insurer.
When a steel grain bin is damaged in a storm and grain needs to be removed to save it, storing the grain in polyethylene agricultural bags, a practice known as grain bagging, is an excellent option. Polyethylene agricultural bags, also called ag bags, have only been used in the United States to store grain since 2008. The practice first became popular in South America where farming is commonly done on rented land and farmers do not want to invest in and build steel grain bins on leased land. Bags vary in width and length, with a common size being 10 feet X 300 feet, which will hold 13,000 bushels of corn. For the insured and the insurer, there are a number of advantages to using ag bags to store grain after a loss to a grain bin.
- Cost Savings - Unloading the damaged steel bins and loading the grain into grain bags on site is an economical option. Grain bagging costs only about 7 cents per bushel, plus the costs for labor and rental of the equipment to load the bags. Storing the grain on site is much less expensive than trucking it to another location and paying for storage, or worse leaving it in the damaged bins and paying for a total loss.
- Time Is Critical - Ag bags and a loader can be brought to the insured location quickly to unload the bins to save the grain. The bags can be set up close to the damage storage bins, as long as the ground is level, to expedite unloading the grain. Operating off of the power take-off (PTO) from a tractor, specially designed equipment is used to load and unload the ag bags. Ag bags can be loaded at a rate of 30,000 bushels an hour.
- Long Storage Life - With a white exterior to minimize heat absorption from the sun, and a black interior lining to block ultraviolet light, grain can be stored from 6 to 18 months.
- Preserves Market Strategy Options - In recent years farmers have increased their capacity to store grain to better manage price fluctuations, which typically drop at harvest time. When a loss occurs to a grain bin, the insured farmer may have been storing the grain waiting for the market price to increase. If the grain in the damaged storage bin can’t be salvaged timely and is lost, the insurer pays the insured the current market price for the grain, which may have been low at the time of the loss. Being able to recover the grain from the damage bins and store it in ag bags minimizes the loss and allows the insured to continue to store the grain until prices are favorable.
When a storm hits damaging steel grain bins, consider using polyethylene bags as an economical and practical option to save the grain.