Russell and Lora Mullins used a Farm Storage Facility Loan to make improvements the efficiency of their grain handling facilities.
By Lindsey New, Farm Service Agency
Grain producers Russell and Lora Mullins, of Beelick Farms in Eubank, Kentucky, have been in the business over 30 years.
“These days, on top of tough prices and unpredictable weather, we’re up against the cost and availability of employees able and willing to operate our farm equipment, haul grain, and work the long hours through harvest,” said Russell. “So, we had to improve the efficiency of our grain handling to control our costs – and really just to be able to continue to operate with the number of drivers we have available at harvest time.”
Russell and Lora participated in the Farm Storage Facility Loan Program (FSFL) to install a new dump pit, leg (an elevator to lift grain into grain bins) and dryer (to prevent spoilage during storage) to their existing grain storage facility. FSFLs provide low-interest financing for producers to build or upgrade commodity storage facilities.
The cost and time saved with these new improvements will allow the Mullins family to keep their grain trucks steadily rolling from field to bins throughout harvest.
With their goal to reduce their costs of drying their harvested commodities, it also allowed for less labor and equipment demands in distribution of grain throughout the 280,000 bushels of storage on their 3,300-acre operation.
An investment of this proportion into a grain storage system, without adding storage capacity, may seem daunting at a time when commodity prices are low, but the Mullins found this to be an opportunity.
“The low interest rate offered through the FSFL program made it possible for us to make this investment,” Lora said. “We expect it will largely pay for itself in efficiencies. We have little control of the markets or the price tag on our inputs, so our livelihood depends on our efficiency with what’s left in between.”
The Mullins’ core operation is in Pulaski County in south central Kentucky. Geographically, producers are a long haul from any major grain elevator. Utilizing programs like FSFL can provide a marketing advantage by allowing them to store grain at harvest time, when prices tend to be lower.
Manage and Conserve
The Mullins also take advantage of FSA’s Marketing Assistance Loans as another marketing tool. The program provides interim financing at harvest time to meet cash flow needs without having to sell their commodities when market prices are typically at harvest-time lows. Allowing producers to store production at harvest facilitates more orderly marketing of commodities throughout the year.
To prepare for potential market downturns, they also participate in the Agriculture Risk Coverage and Price Loss Coverage (ARC/PLC). To further manage their risk, they insure their corn and soybeans crops with crop insurance, managed by USDA’s Risk Management Agency.
They have also utilized the Environmental Quality Incentives Program (EQIP) through the Natural Resources Conservation Service to plant cover crops as part of the Mississippi River Basin Initiative. NRCS works with farmers and conservation partners to implement conservation practices that help trap sediment and reduce nutrient runoff to improve the overall health of the Mississippi River.
More Information
USDA offers a variety of risk management, disaster assistance, loan, and conservation programs to help agricultural producers in the United States weather ups and downs in the market and recover from natural disasters as well as invest in improvements to their operations. Learn about additional programs.
For more information about USDA programs and services, contact your local USDA service center.
