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Here’s a headscratcher. The beginning of the 21st century kicked off a two-decade run of expanding grain storage – both on- and off-farm – that largely kept pace with rising production. But then it stopped, and the reasons why aren’t exactly clear.
It’s a phenomenon tackled in a farmdoc daily paper by Joe Janzen, associate professor of agricultural economics at the University of Illinois.
“For about twenty years, from 2000 to 2019, grain storage capacity grew in lock step with increases in US grain production” to the tune of about 349 million bushels a year, Janzen wrote. “This parallel growth implied capacity was ‘right sized’ for existing grain supply chains. Since 2020, capacity growth has disappeared. While crop production continues to rise, storage capacity both on farm and off farm has remained roughly constant. This change holds across all major grain growing regions.”
The U.S. still has sufficient grain-storage infrastructure, but the data raises concerns, he said. Here’s why:
- Less storage capacity relative to crop production is concerning if it creates bottlenecks in the grain handling and transportation system that raise costs and generate significant differences in price between producer and end-user.
- This year’s large US corn crop has led to record high US storage capacity utilization, particularly in on-farm storage. Recently released data showed 80% of on-farm storage capacity was used by major crops as of December 1, 2025.
In turn, stagnant capacity growth raises at least two unanswered questions, Janzen said. They are:
- How much capacity utilization is too much before capacity constraints disrupt supply chains and affect market prices?
- Who will invest in new storage capacity if increases in crop production are expected to continue?
Since 2020, only 337 million bushels of storage have been added, Janzen said – less than the average amount added in a single year the previous two decades.
The cause of the slowdown isn’t clear. Janzen offers some possible explanations:
- Increased construction costs and higher interest rates in the post-2020, post-Covid economy.
- Concerns about future production growth, and the irregular and unpredictable nature of grain storage demand.
- Possible difficulty in justifying investment in storage capacity when the timing and magnitude of benefits are uncertain. He notes that storage capacity may earn low returns in typical market conditions but become much more valuable in the aftermath of specific supply or demand changes.
“At what level of capacity utilization do bottlenecks form and capacity constraints begin to materially affect basis relationships, price volatility, and farmer marketing flexibility?,” he asked. “The grain industry, from the farmer outward, will need to consider these questions as it addresses the continually shifting geography of global grain production and consumption in the years ahead.”
WASDE non-event: USDA’s World Agricultural Supply and Demand Estimates lived up to its February reputation as a bit of a snoozer. The highlights:
- USDA boosted its forecast of 2025-26 corn exports to 3.3 billion bushels from 3.2 billion bushels in January, knocking 100,000 bushels off of carryout.
- USDA lifted its estimate of Brazilian soybean production to 180 million metric tons from 178 million MT.
- USDA lowered its estimate of food use for wheat by 5 million bushels, raising carryout by the same amount.
Carryout estimates weren’t far off pre-report expectations. March corn closed unchanged at $4.28 ¾, while March soybeans advanced 11 ¾ cents as March soybean oil hit a contract high on optimism over demand from India. March SRW fell 1/2 cent to $5.28 1/4, while March HRW gained 1 3/4 cents.
Commodities enforcers desert Chicago office: Enforcement attorneys that once made up a 20-strong team at the Commodity Futures Trading Commission’s Chicago office have all left the agency, Barron’s reported. The office had a reputation for hosting the CFTC’s heaviest hitters, who helped oversee cases including the prosecution of CME traders in the late 1980s and the probe into the fraudulent activities of crypto players like Sam Bankman-Fried. A CFTC spokesman told Barron’s that most of the staff separations at the agency stemmed from voluntary decisions tied to early retirement offers.
- “Chicago is the spiritual home of the futures markets; it’s where it all began,” David Slovick, a senior attorney in the Chicago enforcement division from 2009 to 2014, told the publication. “To wipe out the enforcement staff in a place like Chicago sends a very bad signal to market participants about whether the government is watching what they’re doing and whether or not they have to abide by the law.”
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