Investment in Condominium Storage Vs. Renting Commercial Storage

1. Investment in Condominium Storage vs. Renting Commercial Storage When it comes to storing the grains in commercial grain storage equipment then the farmers have a choice to either invest in the condominium storage unit or rent a commercial storage facility. There are lots of advantages and disadvantages associated with both that we are going to discuss here. Investment in Condominium Storage For many years, condominium storage is being offered by commercial elevators. However, the investment in such grain storage equipment is required when there is a requirement for additional storage capacity in the existing state. Usually, the producer is supposed to make an initial investment in the condominium storage for reserving the right to use a fixed space of storage for their own purpose. The producer in this case may either own the storage space or may sign a contract for a long-term lease. In such cases, the commercial elevator manages the stored grain and ensures that the quality of

2. the grains is maintained as per thegrain bin monitoring systems. The Commercial elevator charges a specific service fee according to the volume of grains stored or the capacity of space owned by the producers. Advantages of condominium storage include: ●Commercial elevators have the ability to offer and build storage capacity that will cost lower cost per unit to the producers as compared to building on-farm storage. ●The elevator follows the grain bin monitoring systemsand manages the quality of the grains. ●When the grain is marketed and sold in the market through the same elevator, then the producers can save on the additional transportation and handling cost. ●There is an option to sold the storage capacity it is not required anymore or if in case the leases are not renewed. The disadvantage of condominium storage is that it may be difficult or uneconomical to market the grain to any other buyer or processor once it is placed in the condominium storage. The resale value of the storage space is also unknown. Renting Commercial Storage Many producers prefer the rented commercial storage space to store their grains or to enhance their own storage capacity when in case the production of the grains is more normal. The attractive factor of renting commercial storage is its location and accessibility along with the capacity to store the grains while maintaining the quality. The cost of renting commercial storage depends upon the period of time when the grain will be stored.

3. Advantages of renting commercial storage ●The producer needs to pay for the capacity only that is needed for storing grains based on the number of bushels produced. ●The producer has to pay the rent for the storage of grains only the time period the grains are stored. ●The quality of the grains is managed by the elevator. ●The elevator has the ability to dry the grain at a lower cost. ●The cost of handling and transportation is saved if the grain is marketed through the same elevator. ●The elevator will manage effective grain bin monitoring systems. The disadvantage of using rented commercial storage is that there will be longer distances, loading and unloading costs for transporting the grain from the farmland of the producer to the commercial storage facility. This process involves time. Sometimes, the producer has to depend on the elevator for the marketing of the stored grains.