Farm Decisions and Activities during Harvest: Harvest Logistics and Grain Marketing

Harvest time is arguably the most exciting production window for farmers. It’s the moment when the investment of time, labor, capital, innovation, and creativity is finally assessed, often referred to as the "yield report card." While yield is just one factor in the overall profitability equation, many farmers tend to view it as the primary indicator of success (more on this in a future post). During this critical period, numerous activities and decisions are made on the farm. Table 1 below outlines some of the key actions taken by row crop farmers during harvest.

Table 1: This highlights key decisions/ activities happening during the harvest window. This resource is a condensed extract from the Farmer Decision Making Guide pages 14 - 15.

How to best leverage this resource:

Part one highlights key decisions that traditional or conventional farmers in the United States and Canada make during the harvest and post-harvest fieldwork production windows. While not an exhaustive list, it organizes critical decisions and activities into three main categories: Harvest Logistics, Marketing & Storage, and Soil Management. If you're interested in exploring farm decision-making from a regenerative farming lens, a rancher’s perspective, or for producers in specific regions or countries, please contact Living Roots Ag today!

This article is the first in a four-part series, each designed to deepen your understanding of the decisions growers face during the harvest and post-harvest months. If you have not read the Farmer Decision Making Guide, I highly recommend downloading this resource before taking a deep dive into harvest decisions.  Both this article and the guide are geared toward readers with limited agricultural experience who work in Ag Tech, Sustainability, Nature-Based Solutions, Regenerative Farming, or related fields, such as product or project management, business development, customer success, sales, marketing, data science, or design.

Below is the list of upcoming articles, scheduled for release over the next four to five weeks and you can also find a glossary of terms at the end of this post:

1. Farm Decisions and Activities during Harvest: Harvest Logistics and Grain Marketing

2. Farm Decisions and Activities during Harvest: Soil Management

3. Farm Decisions and Activities during Harvest: A Regenerative Farming Viewpoint

4. Farm Decisions and Activities during Harvest: Positioning Your Ag Solution During Harvest

Harvest Decisions and Challenges:

Amid the excitement of harvest come numerous farming challenges and critical decisions. At any moment, unexpected changes such as shifts in weather, local or global grain prices, equipment breakdowns, crop conditions, or contract delivery dates can disrupt even the best-laid plans. Farmers may need to make significant financial decisions, ranging from a few thousand to hundreds of thousands of dollars, at the drop of a hat. Having a clear understanding of their operational, strategic, and financial standing can offer peace of mind amidst the chaos. This is why farmers often rely on trusted advisors to help them make well-informed, level-headed decisions. So, what are some of these decisions and challenges? While the list is extensive, they’ve been categorized into three primary buckets to provide high-level insights.

Harvest Logistics:

Many producers have a rough idea or plan to harvest certain fields in a particular order. Often this is based on many variables listed in order of importance below (Table 2). Many of these same factors also impact a farmers planting order in the spring.

Table 2: A high level overview of factors impacting harvest logistics. More detailed information on each factor is given in the list below. 

1. Crop type and condition

   1. Crop Type: Refers to whether the crop is corn, soybeans, cotton, rice, or another type.

   2. Condition: Describes the crop's standing, whether there are any diseases affecting its quality, or the crop’s moisture levels.

   3. 
      

      1. Grain Moisture - A critical factor in harvest logistics. The University of Nebraska highlights how crop moisture impacts crop economics. Overly wet grain requires expensive drying and risks spoilage, while overly dry grain loses weight, reducing yield. Each crop has an optimal moisture level and harvesting above or below that point can lead to lost revenue for the grower.

      2. Grain Quality - Grain quality refers to a range of factors that affect its market value and usability, including physical attributes like test weight, kernel size, and cleanliness from molds or toxins, as well as intrinsic properties such as protein, fat, and starch content. Failing to meet specific quality standards can lead to price deductions or outright rejection, leaving farmers with unsellable grain that either needs to be blended with higher-quality batches or discarded entirely.

         1. In crops like wheat, quality factors, especially protein content, can earn premium prices, directly impacting harvest logistics. For instance, identifying fields with higher protein levels can help optimize harvest planning and maximize returns. As affordable tools for measuring nutrient density become more accessible, farmers will have even more opportunities to enhance grain quality and increase profitability (more on this in a future post).

2. Distance from storage or processing facility

   1. Storage facilities include cooperatives or a farmer’s own grain storage facility. Farmers typically pay a fee per bushel or unit of grain for storage, and an additional per-bushel fee for drying the grain to the appropriate moisture level at a cooperative.

   2. According to the July 2023  USDA market survey, most farmers are within 15 miles of their first choice location and ~22 miles of their second choice. 

   3. The distance from a storage or processing facility affects how many acres can be harvested in a day. Some growers may choose to avoid certain fields until later in the year when there are no long lines at the grain unloading stations. 

3. Distance from home: 

   1. Fields located farther from home are typically harvested first because their grain is often destined for a cooperative or other external facility. In contrast, most farmers' grain storage facilities are on or near their farmstead, allowing them to harvest fields destined for these storage locations last. Unlike cooperatives or commercial storage facilities with set closing times, farmers can continue harvesting through the night if needed.

4. Field conditions:

   1. Field conditions generally refer to the soil moisture level, indicating whether a field is wet or dry. Fields that take longer to dry after rain are at a higher risk of problems such as getting stuck or sustaining compaction damage, which can lead to yield losses for three or more seasons following a wet harvest. Additionally, field conditions may include planned land improvement projects, such as tile drainage installation or conservation measures like filter strips and waterways, which should be completed before the ground freezes in northern regions. 

5. Weather constraints:

   1. Weather constraints that impact harvest include incoming rain, snow, wind, fire, or hail. Any of these events can significantly reduce yields, limit field accessibility, or even destroy entire crops. Growers must closely monitor changing weather conditions during harvest and be prepared to adjust their plans as needed.

6. Market changes:

   1. Market influences are typically local, often driven by the needs of nearby processing facilities requiring grain for their end products. Examples include ethanol plants, biodiesel plants, and food processors. These processors may offer short-term incentives, such as an additional $0.05 - $0.30 per bushel, to encourage earlier harvests.

   2. Macro-level changes in harvest expectations usually have a minimal market impact until sufficient data is collected by the USDA. The Crop Progress Report, published weekly, generally affects the market by approximately $0.05 - $0.10 per bushel.

7. Other variables:

   1. Many other variables such as equipment breakdowns, Land-lord requests, fertilizer availability/ sales, family events, a neighbors progress and more can and will influence harvest logistics. 

Marketing and Storage

Marketing Strategies

Most farmers sell a portion of their crops before harvest using a variety of marketing tools and platforms. Tools include Futures Contracts, Hedge-to-Arrive (HTA) contracts, Options, Puts, Calls, and more (described in the links below). Popular platforms include DTN’s Grain Portal, Bushel Farm, and Grain Basis (note: Living Roots Ag does not specifically endorse any of these tools). However, the key challenge lies in making several critical decisions: How much of the crop should be contracted ahead of time? Which platform(s) should be used? Should a grain merchandiser or broker be hired? And, most importantly, what is the farm’s break-even cost of production?

While grain marketing can seem overwhelming, farmers have access to a wealth of resources and trusted advisors who can guide them through the process. Successful grain marketing requires significant time and attention, which is why many farmers lean on advisors who specialize in this area. These professionals can help farmers manage risk, optimize their marketing strategies, and ensure profitability. Table 3. contains  resources that offer an introduction to the various aspects of grain marketing for non-ag professionals.

Table 3. Introductory grain marketing resources

A general rule of thumb in the industry is to forward contract (sell ahead of harvest) up to 50% of a farm’s Average Production History (APH)—the proven average yield for a specific field over a 10-year period. This number is not only essential for marketing decisions but is also used in crop insurance calculations (more on this in a future article). By contracting up to 50% of the APH, farmers can lock in prices and manage risk, aiming to maximize profitability. Typically, the best marketing window for many grain crops occurs during the months of April, May, and June.

Storage Decisions:

An integral part of a farmer’s marketing plan includes whether to store grain in hopes of selling it at higher prices later. However, many farmers face storage capacity limitations. On average, farmers can store ~45-55% of their harvested grain on their farms, while the rest must be stored in off-farm facilities, which comes with additional costs. (The University of Illinois Farmdoc Daily produces many different ag reports. One such report reviews the Changes in US  Gain Storage Capacity from 1990 - 2019.)

Investing in additional on-farm storage can be a wise long-term decision, but it’s a significant financial commitment. According to a Farm Progress article, building on-farm storage costs between $3 and $4 per bushel of storage capacity. Most modern grain bins store between 20,000 and 70,000 bushels or more, meaning a farmer may need to invest anywhere from $60,000 to $280,000+ for a new grain bin. The payback period for this investment can stretch over a decade, depending on the farmer’s marketing strategy and expertise.

While grain marketing and storage decisions may seem straightforward, they require careful planning and financial investment. Having a good grasp of market conditions, trusted advisors, and accurate APH data can help farmers make more informed decisions.

Concluding Thoughts:

How does understanding these activities and decisions empower you as a contributor in this space? First, recognizing the high-stakes decisions growers face fosters a deeper appreciation of their workload and builds empathy. Growing up on a farm and now working as a trusted advisor has taught me how to better connect with growers. While I’m still learning how to navigate different relationships and scenarios, I’ve gained valuable insights along the way.

Second, there are key leverage points in the agrarian calendar that can help you achieve product market fit or desired market penetration. Focusing on relationship-building and understanding your customers' greatest challenges is crucial. Table 4 offers insights on relationship-building and key trusted advisors to collaborate with, depending on your product or service.

Lastly, while the harvest window is a busy time, there are still opportunities to connect with growers and identify challenges that can inspire new solutions. Table 1 outlines a grower's capacity to engage, while Table 4 highlights potential technological advancements to address their challenges. If this article has been helpful and you'd like to explore a strategy for your product or service, contact Living Roots Ag today.

Table 4. Harvest decision insights, leverage points, influencers, and technological advancement opportunities. 

Glossary:

1. Bushel:  A unit of measurement for grains, defined by volume. The industry standard, regulated by the USDA, can be found HERE.

2. Contract Delivery Dates: A grain delivery contract specifies the amount of grain to be delivered to a specific location on a set date..

3. Cooperative: A member-owned and operated business that typically sells seeds, chemicals, and fertilizers. It also provides grain storage, buys grain from members, and offers agronomic services, including custom crop input applications.

4. Crop Insurance: A federally subsidized insurance policy protecting farmers from crop loss due to various causes such as hail, wind, fire, and pests.

5. Grain Basis: difference between the local cash price of grain and its futures price. It helps farmers and buyers understand local market conditions and make pricing decisions.

6. Grain Moisture: The percentage of water contained in the grain itself.

7. Grain Quality: The measure of grain based on factors such as physical appearance (cracks, splits), contaminants (disease, mold, foreign material), and content parameters (protein, starch, amino acids), all relevant to its end use.

8. Farmstead: The building site of a farm, typically where the grower's home, primary machine sheds, and barns are located.

9. Filter Strips: Grassy buffers between crop fields and water bodies, designed to catch and trap sediment that would otherwise run off into the water.

10. Forward Contract: An agreement to sell grain at a specified price in the near future.

11. Grain Bin: A bulk storage structure for grain, typically cylindrical, which may be connected to other bins for easy filling and emptying.

12. Grain Merchandiser/Broker: A trusted advisor who helps growers strategically sell grain at the best price, using various marketing tools and platforms.

13. Grain Processors: Entities that convert raw grain into usable products or by-products. They may or may not be the end-users of the grain.

14. Land-Lord: A landowner who rents out land or enters a crop-share agreement with a tenant farmer.

15. Production Window: Key periods in the agrarian calendar when farmers conduct similar tasks or activities.

16. Soil Compaction Risk: The tendency of soil to compact, causing particles to press together and reduce air space. Compacted soils have poor aeration, limiting plant growth and productivity.

17. Tile Drainage: Perforated pipes installed underground to artificially drain excess water from wet soils.

18. Trusted Advisors: Advisors growers rely on to make informed business decisions.

19. USDA Crop Progress Report: A weekly publication from the USDA that provides state-level insights and updates on crop performance.

20. Waterways: Grassy, permanent pathways designed to channel water flow across a field, reducing erosion and capturing sediment during heavy rains.

21. Yield Report Card: The evaluation of how much a particular field yielded. Generally the unit of measurement is Bu/acre, lbs/ac, or tons/ac.