Grain Dryer Investment Analysis Decision Aid - lsu.edu · PDF fileGrain Dryer Investment...

Grain Dryer Investment Analysis Decision Aid

2016 Delta States Farm Management MeetingVicksburg, MSMay 26, 2016

Presented by : Larry Falconer, MSU Extension Service

Acreage Planted to Major Crops in Mississippi

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

CORN COTTON RICE SOYBEANS WHEAT


• Increase in corn acreage in the Mississippi Delta has led to investment in on-farm storage and grain handling facilities.

• Ability to dry corn on farm may impact:• Farm’s harvest equipment complement• Farm’s harvest schedule• Net price for corn produced• Field loss

• Questions/Comments





Heater Fuel Use

Natural Gas ($/mcf) 4.00$ Drier Capacity ‐ Heat & Cool ‐ (20‐15% MC) (Bushel per Hour) 4700Drier Capacity ‐ Heat & Cool ‐ (25‐15% MC) (Bushel per Hour) 2800

Energy Content (NG) ‐ BTU per cubic ft 1000

Heater Maximum Energy Usage (million BTU/hour) 47.8

Estimated Dryer Fuel Cost ($/bushel)Heat & Cool ‐ (20‐15% MC) 0.041$ Heat & Cool ‐ (25‐15% MC) 0.068$

Electrical UsageTotal Dryer Motor Power (HP) 160

Elecricity Cost ‐ $/KWh 0.110$

Estimated Electric Cost ($/bushel)Heat & Cool ‐ (20‐15% MC) 0.003$ Heat & Cool ‐ (25‐15% MC) 0.005$

Fuel & Electric Cost ($/bushel)Heat & Cool ‐ (20‐15% MC) 0.044$ Heat & Cool ‐ (25‐15% MC) 0.073$


Bushels Dried per Year 1,000,000

Hours Dryer OperatedHeat & Cool ‐ (20‐15% MC) 213Heat & Cool ‐ (25‐15% MC) 357Labor Rate ($/hr) 20.00$

Estimated Labor Cost ($/year)Heat & Cool ‐ (20‐15% MC) 4,260.00$

Estimated Variable Cost ($/year)Heat & Cool ‐ (20‐15% MC) 48,260.00$ Heat & Cool ‐ (25‐15% MC) 80,140.00$

Fixed Cost 50,000$

Fixed Cost per Bushel 0.050$


Moisture % @ Delivery to Elevator

% Moisture Discount

12.0% 0.0%12.5% 0.0%13.0% 0.0%13.5% 0.0%14.0% 0.0%14.5% 0.0%15.0% 0.0%15.1% 1.3%15.6% 2.6%16.1% 4.1%16.6% 5.6%17.1% 7.1%17.6% 8.6%18.1% 10.1%18.6% 11.6%19.1% 13.1%19.6% 14.6%20.1% 16.1%20.6% 17.6%21.1% 19.1%21.6% 20.6%22.1% 22.1%22.6% 23.6%23.1% 25.1%23.6% 26.6%24.1% 28.1%24.6% 29.6%


Acres per Day 250 price per bu 4.50$ Base Moisture 15.5% NG Price ($/mcf) 4.00$

Acres Field Yield Wet Bushels% Moisture @

Harvest% Field Dry Per

Day

Lost Bushels Delivered Under

15.5%

% Moisture Discount

Delivered to Elevator

Day 1 250 211 52,750 20.0% 0.5% ‐ 14.6%Day 2 250 210 52,500 19.5% 0.5% ‐ 13.1%Day 3 250 209 52,250 19.0% 0.5% ‐ 11.6%Day 4 250 207 51,750 18.5% 0.5% ‐ 10.1%Day 5 250 206 51,500 18.0% 0.5% ‐ 8.6%Day 6 250 205 51,250 17.5% 0.5% ‐ 7.1%Day 7 250 204 51,000 17.0% 0.5% ‐ 5.6%Day 8 250 202 50,500 16.5% 0.5% ‐ 4.1%Day 9 250 201 50,250 16.0% 0.5% ‐ 2.6%Day 10 250 200 50,000 15.5% 0.5% ‐ 1.3%Day 11 250 199 49,750 15.0% 0.5% (294) 0.0%Day 12 250 198 49,500 14.5% 0.5% (586) 0.0%Day 13 250 197 49,250 14.0% 0.5% (874) 0.0%Day 14 250 195 48,750 13.5% 0.5% (1,154) 0.0%Day 15 250 194 48,500 13.0% 0.5% (1,435) 0.0%Day 16 250 193 48,250 12.5% 0.5% (1,713) 0.0%Day 17 250 192 48,000 12.0% 0.5% (1,988) 0.0%Day 18 250 191 47,750 11.5% 0.5% (2,260) 0.0%Day 19 250 190 47,500 11.0% 0.5% (2,530) 0.0%Day 20 250 189 47,250 10.5% 0.5% (2,796) 0.0%Day 21 250 188 47,000 10.0% 0.5% (3,059) 0.0%Day 22 0 188 ‐ 10.0% 0.5% ‐ 0.0%Day 23 0 188 ‐ 10.0% 0.5% ‐ 0.0%Day 24 0 188 ‐ 10.0% 0.5% ‐ 0.0%Day 25 0 188 ‐ 10.0% 0.5% ‐ 0.0%Day 26 0 188 ‐ 10.0% 0.5% ‐ 0.0%Day 27 0 188 ‐ 10.0% 0.5% ‐ 0.0%

5,250 1,045,250 (18,689)


Acres per Day 250 price per bu 4.50$ Base Moisture 15.5% NG Price ($/mcf) 4.00$

Acres Field Yield Wet Bushels% Moisture @

Harvest% Field Dry Per

Day

Lost Bushels Delivered Under

15.5%

% Moisture Discount


Day 1 250 225 56,250 25.0% 0.5% ‐ 29.6%Day 2 250 224 56,000 24.5% 0.5% ‐ 28.1%Day 3 250 222 55,500 24.0% 0.5% ‐ 26.6%Day 4 250 221 55,250 23.5% 0.5% ‐ 25.1%Day 5 250 219 54,750 23.0% 0.5% ‐ 23.6%Day 6 250 218 54,500 22.5% 0.5% ‐ 22.1%Day 7 250 217 54,250 22.0% 0.5% ‐ 20.6%Day 8 250 215 53,750 21.5% 0.5% ‐ 19.1%Day 9 250 214 53,500 21.0% 0.5% ‐ 17.6%Day 10 250 213 53,250 20.5% 0.5% ‐ 16.1%Day 11 250 211 52,750 20.0% 0.5% ‐ 14.6%Day 12 250 210 52,500 19.5% 0.5% ‐ 13.1%Day 13 250 209 52,250 19.0% 0.5% ‐ 11.6%Day 14 250 207 51,750 18.5% 0.5% ‐ 10.1%Day 15 250 206 51,500 18.0% 0.5% ‐ 8.6%Day 16 250 205 51,250 17.5% 0.5% ‐ 7.1%Day 17 250 204 51,000 17.0% 0.5% ‐ 5.6%Day 18 250 202 50,500 16.5% 0.5% ‐ 4.1%Day 19 250 201 50,250 16.0% 0.5% ‐ 2.6%Day 20 250 200 50,000 15.5% 0.5% ‐ 1.3%Day 21 250 199 49,750 15.0% 0.5% (294) 0.0%Day 22 0 198 ‐ 14.5% 0.5% ‐ 0.0%Day 23 0 197 ‐ 14.0% 0.5% ‐ 0.0%Day 24 0 195 ‐ 13.5% 0.5% ‐ 0.0%Day 25 0 194 ‐ 13.0% 0.5% ‐ 0.0%Day 26 0 193 ‐ 12.5% 0.5% ‐ 0.0%Day 27 0 192 ‐ 12.0% 0.5% ‐ 0.0%

5,250 1,110,500 (294)



% Moisture @ Harvest

% Moisture Discount


Bushels Delivered to Elevator

On Farm Dry Bushels

Bushels Gained/(Lost)

Drying% Harvest

LossHarvest Loss Bushels

On Farm Dry Bushels

Drying Cost $ per Bushel

Drying Cost $ per Day

Day 1 25.0% 29.6% 39,600 49,926 10,326 3.6% 2,025 1,797 0.080$ 4,500$ DryDay 2 24.5% 28.1% 40,264 50,036 9,772 4.1% 2,296 2,051 0.072$ 4,032$ DryDay 3 24.0% 26.6% 40,737 49,917 9,180 4.6% 2,553 2,296 0.072$ 3,996$ DryDay 4 23.5% 25.1% 41,382 50,019 8,637 5.1% 2,818 2,551 0.064$ 3,536$ DryDay 5 23.0% 23.6% 41,829 49,891 8,062 5.6% 3,066 2,794 0.064$ 3,504$ DryDay 6 22.5% 22.1% 42,456 49,985 7,529 6.1% 3,325 3,050 0.056$ 3,052$ DryDay 7 22.0% 20.6% 43,075 50,077 7,002 6.6% 3,581 3,306 0.056$ 3,038$ DryDay 8 21.5% 19.1% 43,484 49,933 6,449 7.1% 3,816 3,545 0.048$ 2,580$ DryDay 9 21.0% 17.6% 44,084 50,018 5,934 7.6% 4,066 3,801 0.048$ 2,568$ DryDay 10 20.5% 16.1% 44,677 50,099 5,422 8.1% 4,313 4,058 0.040$ 2,130$ DryDay 11 20.0% 14.6% 45,049 49,941 4,892 8.6% 4,537 4,295 0.040$ 2,110$ DryDay 12 19.5% 13.1% 45,623 50,015 4,392 9.1% 4,778 4,552 0.032$ 1,680$ DryDay 13 19.0% 11.6% 46,189 50,086 3,897 9.6% 5,016 4,808 0.032$ 1,672$ DryDay 14 18.5% 10.1% 46,523 49,913 3,390 10.1% 5,227 5,041 0.024$ 1,242$ DryDay 15 18.0% 8.6% 47,071 49,976 2,905 10.6% 5,459 5,297 0.024$ 1,236$ DryDay 16 17.5% 7.1% 47,611 50,037 2,426 11.1% 5,689 5,554 0.016$ 820$ DryDay 17 17.0% 5.6% 48,144 50,095 1,951 12.3% 6,273 6,162 0.016$ 816$ DryDay 18 16.5% 4.1% 48,430 49,902 1,472 12.3% 6,212 6,138 0.008$ 404$ DryDay 19 16.0% 2.6% 48,944 49,953 1,009 12.3% 6,181 6,144 0.008$ 402$ DryDay 20 15.5% 1.3% 49,350 50,000 650 12.3% 6,150 6,150 0.008$ 400$ DryDay 21 15.0% 0.0% 49,750 49,750 ‐ 12.3% 6,119 6,119 ‐$ ‐$ Day 22 14.5% 0.0% ‐ ‐ ‐ 12.3% ‐ ‐ ‐$ ‐$ Day 23 14.0% 0.0% ‐ ‐ ‐ 12.3% ‐ ‐ ‐$ ‐$ Day 24 13.5% 0.0% ‐ ‐ ‐ 12.3% ‐ ‐ ‐$ ‐$ Day 25 13.0% 0.0% ‐ ‐ ‐ 12.3% ‐ ‐ ‐$ ‐$ Day 26 12.5% 0.0% ‐ ‐ ‐ 12.3% ‐ ‐ ‐$ ‐$ Day 27 12.0% 0.0% ‐ ‐ ‐ 12.3% ‐ ‐ ‐$ ‐$

944,272 1,049,569 105,297 93,500 89,509 43,718$ 43,718$ Fixed Cost 50,000

Bushels Gained/(Lost) Drying 105,297 93,718$ Total Drying Cost


Scenario 1 2 3 4On Farm Dryer No Yes No YesMoisture Dry down per day % 0.5% 0.5% 0.5% 0.5%Price of corn 4.50$ 4.50$ 4.50$ 4.50$ Starting Moisture 20% 20% 25% 25%Lost due to Elevator dockage 183,672$ ‐$ 748,026$ ‐$ Lost due to On‐Farm Drying Shrink ‐$ 62,244$ ‐$ 274,190$ Loss due to Low moisture corn 84,101$ 84,101$ 1,323$ 1,323$ Harvest loss 537,827$ 537,827$ 402,791$ 402,791$ Cost to dry (variable) ‐$ 10,782$ ‐$ 43,718$ Total Loss of Value 805,599$ 694,953$ 1,152,140$ 722,021$

Savings of having a dryer @ 20% 110,646$ Savings of having a dryer @ 25% 430,119$ Saving for harvesting with a on Farm Dryer @ 25% over no dryer @ 20% 83,578$ Saving for harvesting with an on Farm Dryer @ 25% over dryer @ 20% (27,068)$

Questions?

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