Bulletin 865 Przr/its and £055 from Un-farm Drying and Storage of Rice } in Texas TEXAS AGRIClllTllRAl zxmnmzmr snmou SUMMARY The gross benefits t0 a Texas rice grower from drying andstoring his rice on-farm as com- pared with selling at harvest averaged $2.17 per barrel (162 pounds) for the 10 seasons, 1945- 46 through 1954-55. This benefit consisted of a seasonal price spread of $1.67 per barrel between September and February, plus a saving of the normal drying charge of 50 cents per barrel. The total cost per barrel for owning and operating an on-farm unit ranged from 66 to 90 cents per barrel, depending on the type of unit. The total cost for the round bin with a portable auger was 66 cents per barrel; a building with an air conveyor, 90 cents per barrel; a building with an installed auger, 79 cents per barrel; and a building with a portable auger, 74 cents. A comparison of the average benefits from drying and storage, $2.17 per barrel, with the total cost of the most common type unit, a build- ing with an installed auger of 79 cents per barrel, CONTENTS Summary .............................................................. -- 2 Comparison of Costs and Benefits _________ Introduction __________________________________________________________ __ 3 Seasmml Movement "f RicePrice ------ -*“‘i _ Returns from On.-farm Drying and Sto Costs of On-farm Drying and Storage .............. -- 3 Payoff Period , Operating Costs ------------------------------------------------ -- 4 Nonmeasurabig;‘giggg;;;;g"5,;;;'""‘. Cleaning Bins ------------------------------------------------ -- 4 Non measurable Costs Labor .............................................................. -- 5 ' """"""""""""""""" Extra Hauling Cost ____________ ________________________ __ 5 Non-measurable Benefits _________________ iaiiéagiilfitiitiitii"IIIiIIIIiIIIIIIIIIIIIIIIIIZIIIIII Z Planning Snnne Rennnnnnntn -------------- Fuel for Grain-moving Equipment ------------ -- ti Reducing Costs Grain Insurance ............................................ .- 6 Insect Control """"""""""""""""""""" '7 Shrinkage during Storage __________________________ -- 7 , "j """"""" '1 """"""""""" '1- Costs not Included ........................................ _- 7 Haulmg from Fleld to B1“ ------------------- --.- Overhead Costs ................................................ -. 7 Utilization of Equipment and Labor DGPIGCIEItIOII .................................................. -- 7 Follgwing Recommended Qperafing _ Interest on Investment ................ -.1; ............ .- g Preeedure ____________________________________ Taxes ............................................................... _. Insurance ______________________________________________________ __ 7 Acknowledgments ..................................... Annual Repairs and Upkeep ...................... .- , " i- Total Costs ........................................................ -- 8 Appendlx A -------------------------------------------- Variation in COStS -------------------------------------------- -- 8 Recommendations» for Drying and Sto f: Effect of Omfarm Drying and 8 Rice in Farm Storage Bins Storage on Quality -------------------------------------- -- - f; Method of Quality Determination __________________ -- 8 Append“ B '_' """"""""""""""""""""""""""" ' Storage Year, 1954-55 ______________________________________ __ 9 A Case History of Management of :__ Storage Year, 1955-56 -------------------------------------- -- 9 indicates a profit of $1.38 per barrel f ownership of the on-farm unit. A comp _i the cost for drying and storing ‘jon th with the benefits received for tlfe w.‘ 1945-46 through 1954-55 indicates the A were smaller than the costs in only 1 ou, seasons. A loan to purchase a unit c_ repaid in slightly over 3 years if avera‘ fits were obtained each year and all the. above cash cost were used to pay princ‘ interest on the loan. .= A study of the operation of 29 on-far’ and storage units during the 1954-55 season and 10 units during the 1955-56 ‘p season indicated that rice growers can 1f quality in terms of milling yield in gr these units. Only a small percentage units had a reduction in grade during thn and storage operation. The average c A milling yield did not show a significant in either of the 2 years. On-farm Rice Dryer ................. .. ra/its and fiosscs from 1 GROWING IN TEXAS is concentrated in 15 s on the Gulf Coast Prairie where rice is in cash crop. Rice harvesting became fully ized with the introduction of the combine 1940’s. general, rice should be harvested when “isture content of the rice grains is be- 18 and 25 percent. Kernels with this mois- ntent are fully developed and mill well. rvested before this stage is likely to have percentage of light, chalky kernels which _ mill well. If harvested after this stage, may be considerable loss in yield from _1 'ng and from inferior milling quality be- of checking of the grains. g rice comes from the combine, it usually moisture content too high for safe storage. l ould not contain more than 12 or 13 per- oisture for safe storage; consequently, rice _-- dried artificially before it can be stored ed into trade channels. number of on-farm drying and storage in- 'ons for rice, using unheated air, recently een constructed in the Gulf Coast area. esign and recommended operating pro- for these units are based on results of londucted at the Rice-Pasture Experiment w near Beaumont. There has been consider- terest in on-farm drying and storage units "- Commodity Credit Corporation loan pro- .1 and the government facility loans for 1 and conditioning equipment have been ed. bulletin discusses costs of owning and 'ng on-farm drying and storage units, the s from owning on-farm units as opposed 'ng at harvest time, the ability of the rice \ s to maintain quality and the size of unit hase. e report is based on information collected drying and storage seasons (1954-55 55-56). Operating practices and costs were d from the majority of rice growers ing on-farm, units. The installations . were located in Jefferson, Chambers, , Harris, Wharton, Jackson, Colorado, I‘ ively, associate professor, Department of Agri- 1 Economics and Sociology; and professor, De- nt of Agricultural Engineering. On-farm Drying and Storage of Rice in Texas R. J. HILDRETH and J. W. SORENSON, JR.* Orange and Newton counties (Figure 1). In- formation on quality was obtained from samples of rice taken in the units. Overhead cost in- formation was obtained from rice growers and building and equipment dealers“ The cost and quality information represents the situation during 1954 through 1956. As rice growers obtain more experience with the units and the design of the equipment is improved, costs probably will be lowered and the probability of a reduction in quality may be lessened. COSTS OF ON-FARM DRYING AND STORAGE Costs of on-farm drying and storage vary from farm to farm. The costs presented here represent the best estimates for “typical” situa- tions that can be obtained from rice grower ex- perience, from building and equipment dealers and from personnel of the Texas Station. Two types of structures were used, a round metal bin or a building (Figure 2). The build- ings were the straight-sidewall type or quonset type (Figure 3). Most of the buildings were com- mercial metal structures; however, a few were wood. buildings constructed by the rice grower. The three main types of grain-moving equipment used with the buildings were portable augers (Figure 4), air conveyors (Figure 5) and in- RlBE-GRUWINB AREA 0F TEXAS (' HM l ' unearth)’ ,_ M" mums ‘ / ' . "'1." .0 ‘ \. ’ II I . FM! g r" l. . L" . °"‘° , / k" '°"/i\‘\.°"'°"“ f/ ‘QQQ Jmmnrsooaon ‘ Q vncroau A v Q Qv/i ‘$3 / LOUISIANA Figure 1. The principal rice-growing area of Texas, from the Louisiana line southeast along the Gulf Coast through Victoria county. The heavy black lines show the north and south boundaries o! the rice area. 3 Figure 2. Typical round steel bins used for drying and storing rice on the farm in Texas. stalled augers (Figure 6); all of the round-bin units used portable augers. Costs of on-farm drying and storage are divided into two types, operating and overhead. Operating costs are associated with the volume or amount of rice dried and stored. Overhead costs do not vary with volume, but to a large extent, remain fixed regardless of the amount of rice dried and stored. The costs presented ‘in this bulletin can be compared with the seasonal spread in prices be- tween harvest time and later in the year and the usual drying charges. This comparison indicates the benefits of drying and storage in on-farm units, as opposed to selling atharvest time. Operating Costs Operating cost information was obtained on the operation of 29 units during the 1954-55 season and 43 units during. the 1955-56 season. In each drying and storage season these units accounted for over two-thirds of the total number Figure 3. Buildings used in these studies were oi the straight-sidewall (left) or the quonset type. TABLE l. AVERAGE OPERATING COST PER B 1*: ON-FARM DRYING AND STORAG 1954-55 _ ' Building Item Portable Installed Air auger auger conveyor Number oi units l0 5f; 7 _ — —- — “Cents — —§ * Cleaning bins 00.6 00.7 00.6 Labor 04.5 07.4 05.6 Hauling to bin 07.9 07.9 07.9 Electricity 06.6 07.0 06.5 Insect control‘ 03.5 03.5 03.5 Fuel for grain-moving equipment 01.3 Grain insurance 03.7 03.7 03.7 Shrinkage during storage 09.0 09.0 09.0 Total 35.8 39.2 38.1 ‘Based on 15 observations. in operation during that season. Units cluded in the study were largely those wt amounts of rice dried and stored or wi responsibility for operation divided am number of persons, making it difficult to accurate information. i The operating costs per barrel (162 n for 1954-55 and 1955-56 are presented in a 1 and 2, respectively. A summary of ra- the two seasons is given in Table 3. Th for the various items in Table 3 reprf weighted average for the 2-year period. The total costs in Tables 1, 2 and 3 t: represent an average of actual rice grower They are totals of the individual cost Certain items may not be experienced by g growers; for example, insect control mfg were not needed each year by all rice I I The total costs for an individual rice grow tend to be lower than those indicated. Cleaning Bins During the 1954-55 season few farm curred this cost since the buildings wer flak: Figure 4. Portable auger. ' costs for this season were based on opera- : at the Rice-Pasture Experiment Station. p»; costs during the 1955-56 year Were based rlner experience and did not vary much from stimated cost during 1954-55. The 1955-56 t: were used in Table 3. 1.‘ his item includes the cost of labor used in 'ng the rice into the drying unit from trucks arvest time, moving the rice from bin t0 during the drying operation and loading it trucks to be taken to market. The labor be is based on an average of the time neces- i to perform the jobs as estimated by rice ers, and an assumed Wage rate of 75 cents hour. The labor costs during 1955-56 were What higher than during 1954-55 because i- rice was moved from bin to bin during the g period. Muddy fields made conditions un- rable for harvesting operations during 1955- hus tieing up more labor during the operation fading the rice into the bin. ' 2. AVERAGE OPERATING COST PER BARREL OF ON-FARM DRYING AND STORAGE OF RICE. 1955-56 Building Bins Item Portable Installed Air Portable auger auger conveyor auger z or of units 8 26 5 4 — — — — Cents — — — — ‘gbins 00.5 01.4 01.7 00.9 07.7 07.5 11.3 09.5 to bin 04.7 04.7 04.7 04.7 ftlty 07.7 07.2 09.0 09.4 l control‘ 01.9 01.9 01.9 01.9 0r grain-moving 5 'pment 00.8 insurance " 03.7 03.7 03.7 03.7 page during p ge 09.0 09.0 09.0 09.0 a 35.2 ~ 35.4 41.1 35.1 R on 20 observations. Figure 5. Air conveyor. During 1934-55 the installed auger units had the highest abor cost. It changed little from the 1954-55 season to the 1955-56 season while the labor charges increased considerably for other units. These differences in the labor cost may not be significant since only a small number of the units Were studied. Extra Hauling Cost Rice dried and stored on the farm involves an extra hauling charge. It was assumed that the cost of hauling rice from the building to market (distance A, Figure 7) was approximately equal to that which Would be incurred at harvest time if the rice were hauled directly from the field Figure 6. Installed auger. TABLE 3. WEIGHTED AVERAGE OPERATING COSTS PER BARREL, 1954-55 AND 1955-56 SEASONS Building ' Bins 119m Portable Installed Air Portable auger auger conveyor auger Number of units 18 31 12 11 — — — — Cents —- — — — Cleaning bins 00.5 01.4 01.7 00.9 Labor 05.9 07.5 08.0 07.2 Hauling to bin 06.3 ' 06.3 06.3 06.3 Electricity 07.1 07.7 07.1 05.7 Insect control‘ 02.7 02.7 02.7 02.7 Fuel tor grain-moving equipment 01.1 Grain insurance‘ 03.7 03.7 03.7 03.7 Shrinkage during storage 09.0 09.0 09.0 09.0 Total 35.2 38.3 39.6 35.3 ‘In many cases insect control costs can be reduced or elimi- nated. Some rice growers may not wish to obtain grain insurance. The elimination of these items will reduce operating costs by 06.4 cents per barrel. to market or to commercial drying and storage facilities (distance B, Figure 7). Hauling the rice from the field to the bin (distance C, Figure 7) then is an extra cost incurred with the use of on-farm drying and storage. There is considerable variation among in- dividual farm units in the hauling cost. In many localities a normal charge for this operation is 10 cents per barrel if a hired trucker is used. Where the rice grower uses his own trucks or auger carts to bring the rice from the field. to the building, the cost is considerably less. The average cost of hauling was lower during 1955-56 than during 1954-55 because more rice growers used their own trucks or carts rather than hired "trucks to bring the grain in from the field. A number of rice growers expressed the opinion that hauling rice from the combine to market costs more than hauling rice from the on-farm units. They felt the need to keep the harvesting operation in progress tended to tie up more equipment during harvesting than in mov- ing the rice from the unit, thus the charge per FIELD DISTANCE B MARKET POI NT DISTANCE C DISTANCE A Figure 7. Extra hauling distance due to on-farm drying and storage unit. 6 barrel was higher during harvesting.» Whey, is the case, the extra hauling cost can be Electricity Electricity was used to dry, aerate { most cases, to load and unload the rice. T y‘ of electricity depends on the amount of m_ removed from the rice during?‘ the dryi f the number of times the rice is"transferreh one bin to another. The moisture of the * it went into the bins ranged. from 13 ._ percent; usually the grain was dried to >2 12 percent moisture. The costs during ti, seasons were similar, with the cost during 56 slightly higher. The 1955-56’ season A favorable weather conditions, with many d“ rain and high humidity, compared with the§ 55 season and required more fan operation“ Insect Control Fifteen of the 29 units studied during 55 had insect infestations large enough to’) rent control practices, Table 1. Twenty =: 43, units had an insect infestation large to warrant control measures during 1955-56. cost during 1955-56 was less than during»: 55. With good management, the cost ma. tinue to decline. Fuel for Grain-moving Equipment This item was incurred by the farmers ~i an air conveyor, which is operated by a g1 ’ engine. . ’ i Grain Insurance Grain insurance was obtained by 9 of t farmers during 1954-55. It was obtained 1f of 43 farmers during 1955-56. Grain insu i a legitimate operating charge for all units. ‘ not insured are undertaking a risk similar g insurance charge. The charge is based . surance rates in the area, 7 months of. < and the average February price recei = TABLE 4. ANNUAL OVERHEAD COSTS OF ON-F ' ‘ A ING AND STORAGE OF RICE FOR S UNITS Building Item Portable Installed All’ Q auger auger conveyor ’ — — — — Barrels — —_, Drying capacity‘ 4.400 g 7.700 4,400 ‘A — — — — Dollars — — i‘ Depreciation on structure. i fan. grain moving and other equipment _ 869 1,563 1,233 Interest on investment at 6 percent 591 1,098 642 Taxes 60 115 64 Insurance on structure 82 157 82 Annual repairs 98 . 191 194 Total 1,700 ' 3,124 2,215 Cost per barrel at . drying capacity 0.39 0.41 0.50 ‘Recommended depth for drying with unheated air ‘A is for rice, $9.19 per barrel, over the 10 '5', 1945-46 through 1954-55. ge during Storage is sold at harvest time on a dry-weight 9 The reduction in weight that usually oc- uring storage represents an extra cost. y: in weight is caused mainly by decreases ‘ture content, which may not occur with ,umidity during aeration of the stored rice. 6- loss in weight was computed on the basis eduction of 1 percent for the dry weight rice. The value of the loss was based on erage February price received by farmers e, $9.19 per barrel, over the 10 seasons 1 . through 1954-55. iinot Included j: rest 0n the value of the grain during the period was not included in the operating _‘ Most stored rice is placed in “government and the rice grower receives payment soon it is stored. charge for deterioration in quality during ‘ and storage has not been included. Most owers maintained grade and milling yield w ffered no economic loss. There is a risk kuality deterioration may occur as well as a ? hat a price decline may occur. It is ex- y difficult to put a value on this risk. Overhead Costs erhead costs are the annual cost of owner- iA summary of overhead costs for different 10f structures and handling equipment is in Table 4. The figures in this table were ” ed on commercially constructed units from t s with on-farm drying and storage facili- 'nd from building and equipment dealers. ‘do not represent an average of rice grower 'ence but represent the overhead cost of ;f specific size and type. The overhead cost ation was based on equipment which would he minimum airflow rates recommended by exas Agricultural Experiment Station. t5. TOTAL COST PER BARREL OF ON-FARM DRYING AND STORAGE OF RICE AT VARIOUS UTILIZA- TION LEVELS a Building Bins . °l “lmmmm Portable Installed Air Portable P auger auger conveyor auger 4. — —— — — Dollars — — — — _ capacity‘ 0.67 0.72 0.81 0.65 capacity 0.74 0.79 0.90 0.66 urths drying-i’ l” l~ " 0.87 0.92 1.06 0.77 l drying - r 1.12 1.19 1.39 0.98 depth for the building and 9-ioot depth for the round The overhead costs for units built by rice growers were lower than those on the commer- cially constructed units. Only the costs of com- mercially constructed units are reported since few rice growers have the necessary engineering skill to construct their own units. The rice grower contemplating investing in on-farm drying and storage equipment should check with his local dealers to determine the actual prices of the various units. Building and fan costs vary. Also, differences in location might mean different freight rates to the dealers and thus different prices to the rice growers. Depreciation Depreciation-expresses the original cost of the building, fans, aeration equipment and grain moving and other equipment as an annual cost over the life of the building. The assumption is made that the building would have a life of 25 years and the fans and motors, 15 years. The installed auger is assumed to have a life of 25 years; the portable auger, 10 years and the air conveyor, 5 years. These assumptions as to length of life, except for the air conveyor, are based on estimates of rice growers and the Department of Agricultural Engineering. A high level of re.- pairs, upkeep and management was assumed in making these estimates. The length of life as- sumption for the building and bins is the same as that listed for metal grain tanks in Bulletin “F” published by the Internal Revenue Service. Air conveyors have been used on farms for 4 years and rice growers estimate they will be good for only 1 more year. In figuring deprecia- tion charges, provisions were made for salvage values of the units. Interest on Investment When the farmer’s money is tied up in a dry- ing and storage unit, it cannot be used for other investments. The costs of missing these oppor- tunities are represented by this figure, which is generally a noncash cost; that is, the farmer does not actually pay interest unless he has borrowed money. The rate of interest used was 6 percent. Taxes Property taxes had not been assessed because most of the units studied were new. The assump- tion was made that the buildings would be valued at 20 percent of one-half the original cost. The tax cost was computed by applying the average rates of the various taxing agencies in certain counties in the rice production area to the as- sumed valuation. Insurance Insurance provides fire and extended coverage on the structure and equipment. The charge is computed from information on insurance rates for the types of structure studied. Annual Repairs and Upkeep The cost of annual repairs on the structure, fans, motors and grain-handling equipment was 7 TABLE 6. VARIATION OF TOTAL COST PER BARREL AT DRYING CAPACITY FOR INSTALLED AUGER UNIT, 1955-56 SEASON Range of total cost, cents Number of units 67 - 71 7 72 - 76 12 77 - 81 2 82 - 80 3 Over 87 2 Total 26 computed since most of the units have not been in use long enough to determine accurately what actual experience will be. Necessary repairs were based 0n estimates by the Department 0f Agri- . cultural Engineering, except for the air conveyor where actual data is available. It was assumed repairs would amount to 0.5 percent of the first cost of the building, grain-moving equipment, fans and motors. Actual repair cost was used for the air conveyor. Total Costs The total cost per barrel for drying and stor- ing rice on the farm depends mainly on the extent to which drying and storage facilities are used. Overhead costs are the same regardless of how much rice is dried and stored. The overhead cost per barrel and the total cost per barrel decrease a as the amount of rice dried and stored increases. The cost will be less at capacity than if half of capacity is used. Total cost per barrel for storage capacity, dry- ing capacity, three-fourths drying capacity and one-half drying capacity is presented in Table 5. These costs were obtained. by dividing the con- stant overhead cost by the number of barrels dried and stored and adding the operation cost per barrel. Figure 8 shows the cost at various levels of utilization for the building with an installed auger. .75 ' DOLLARS PER UNIT N u °' o I l l I I I I I I I I 2 3 4 5 6 7 B 9 IO BARRELS (I N I000) Figure 8. Total cost per barrel of on-iarm drying and storing rice in a building with installed auger. 8 Variation in Costs The costs presented in the preceding - represent a typical situation. Individual, vary about these figures. The variation i cost for 26 rice growers in 1955-56 is pr in Table 6. The costs ranged from 68 I 92 cents per barrel. The distribution of g concentrated in the lower range; that is, ' percent of the rice growers had costs - average. -' EFFECT OF ON-FARM DRYING STORAGE ON QUALITY A major consideration in using on-fa =J ing and storage for rice is the effect this L has on quality. Although the cost for r: drying and storage may be very low, t grower will suffer a loss in income unless V can be maintained. 1 The price of rough rice is affected by v milling yield and grade. On-farm dryin storage affect the value of rice only in te ' its effect on milling yield and grade. Gr determined by such factors as red rice, A kernels, field-damaged kernels, objections. and heat-damaged kernels. Drying and x affect grade mainly in terms of heat-da kernels, since the other factors are present the drying and storage operation. Thus, of on-farm drying and storage on quality : ported in terms of grade changes due to‘, damaged kernels and milling yield. ' Tests conducted at the Rice-Pasture n; ment Station show that drying rice Wit heated air in farm-type bins is feasible l‘ milling yield and grade can be maintained d the drying and storage period. ’ Method of Quality Determinatio; A study was made of the effect of 0' drying and storage under farm conditio grade and milling yield for 1954-55 and 1. The general procedure used in obtaining inf 3 tion in this part of the study follows. As t l was unloaded from trucks into the bins, s, were drawn. These sampleswere dried» = Rice-Pasture Experiment Station to 13 o, moisture or less in a dehumidified room spreading the rice out in thin layers in the? air. These were considered check samples, After the rice was dried a second sampl taken from the bin. This was called th sample. The usual drying period for the"? studied was approximately 3 Weeks. 7 Information was obtained on milling * and grade at the time of sale or at the e‘ the storage period. The usual storage peri approximately 6 months. During the '». storage year, this information was obtain each bin from the rice grower’s sale data. llata were considered accurate since most of ice was in loan and thus graded by official “inspectors of the United States Department 1 iculture at the time of delivery to the CCC. pg 1955-56, samples were taken from the bin ly before sale. These were called the sale Ole. ‘ e samples were taken from the bins with -bin” probes (Figure 9). Each sample con- i: of probings from several locations over ins and was graded by official grain in- rs of the USDA. Storage Year. 1954-55 e operation of 29 on-farm drying units was ed during 1954-55. About 41 units were in ' Texas during that year and weather con- y generally were favorable for drying. les were drawn at various locations and s in the 95 bins checked. f 'ttle reduction in grade because of heat loge occurred during the drying operation. An ' sis of the change in grade between the check les and dry samples indicates that 92 percent e bins did not have any reduction in grade "to heat-damaged kernels, Table 7. Only 1 nt of the bins had heat-damaged kernels h caused a reduction of more than two s. lthough 95 bins were checked for heat dam- ;complete milling yield information was ob- t on only 80 bins, mainly because some bins combined during the storage period. ere appeared to be little difference between g g yield of the check samples versus the dry :. samples. The largest change in head rice occurred during the drying period. Table 8 is there was an average decrease of 0.8 pound rice per 100 pounds of rough rice. The ge change in total rice was a decrease of ‘und of milled rice per 100 pounds of rough Storage Year. 1955-56 A e operation of 1O drying and storage units i studied during the 1955-56 storage year. l- units were located in Liberty and Jefferson gies. More complete information on the 7. REDUCTION IN GRADE DUE TO OCCURRENCE ‘ OF HEAT-DAMAGED KERNELS DURING DRYING OPERATION. 1954-55 STORAGE YEAR I l r oi grades reduced Percent oi bins 11" ‘a c‘? 92 1 “cnm-cazon-c Figure 9. A grain probe was used to obtain samples oi rice ior moisture tests and for determining the eiiect oi on-iarm drying and storage oi the milling quality. operating procedure was obtained during 1955- 56 than 1954-55. Most of the days during October and November in 1955 were rainy with high relative humidity, which is unfavorable weather for drying. A total of 41 bins or lots of rice was included in the survey. Samples were drawn at different locations at three levels in most bins, from the top foot, the bottom foot and the middle foot. Separate checks on milling yield and grade were made at each level. Although there were 103 levels in the study, complete milling yield data were obtained on only 97 levels; two bins were sold shortly after the drying operation was completed, reducing the total by six levels. Figure l0. A Brown-Duvel moisture tester‘ was used to determine the .moisture content oi rice samples. This man is preparing a sample ior the moisture test. TABLE 8. AVERAGE CHANGE IN MILLING YIELD, 1954-55 STORAGE YEAR Average Change‘ Time Period Head rice Total rice Drying period (Check sample to dry sample) —-0.8’ —0.4 Storage period (Dry sample to sale sample) +0.4 —0.2 Drying and storage period (Check sample to sale sample) —0.4 —0.6’ ‘Pounds of milled rice per 100 pounds of rough rice. “Change is larger than could be explained on pure chance basis if difference was zero at 5 percent probability level. Eighty-nine percent of the levels did not show any reduction in grade due to heat-damaged ker- nels, Table 9. Four percent of the levels had a reduction of five grades. This largely resulted from improper operation of one unit. (A case history of this operation is given in Appendix B.) The average milling yield and yield of head rice increased during all periods, Table 10. The increase in total rice during the storage period also was significant. The average increase does not mean that all the levels increased. Some increased and some did not and the net effect was an average increase. Part of the average increase could be explained by sampling error in the bins. Perhaps a major factor in the explanation of the increase is the change in moisture during the storage period. The moisture content of most of the levels was reduced from the storage sample to the sale sample, which may have caused the increase in milling yields. COMPARISON OF COSTS AND BENEFITS Whether to dry and store rice on-farm or to sell at harvest depends to a large extent on the costs of on-farm drying and storage and the seasonal movement in prices between harvest and later in the year. Other factors involved are diffi- cult to evaluate in dollars and cents although they may outweigh the more direct costs and benefits. Seasonal Movement oi Rice Price An analysis of the prices paid Texas rice growers for the seasons 1945-46 through 1954-55 TABLE 9. REDUCTION IN GRADE DUE TO OCCURRENCE OF HEAT-DAMAGED KERNELS DURING DRYING OPERATION, 1955-56 STORAGE YEAR Number of grades reduced Percent oi observations 0 89 1 3 2 3 3 1 4 5 4 10 TABLE-10. AVERAGE ICHANGE IN MILLING YIELD, STORAGE YEAR '. Average Chan l i T" P ' d lme eno Head rice Totdli, Drying period I ' (Check sample to dry sample) +1.8’ + Storage period 3 (Dry sample to sale sample) w, $30.7’ "U; Drying and storage period a (Check sample to sale sample) +2.5’ “f ‘Pounds of milled rice per 100 pounds oi rough rice. _y 2Change is larger than could be explained on pure basis if difference was zero at 5 percent probability » gives some indication of future seasonal t. ments for rice prices. The immediate past cates a definite seasonal price movement good possibility for the same type of -=~ movement in the future. The solid, heavy line in Figure 11 show average of the midmonthly prices receiv Texas rice growers for rice from 1945-46 t 195_4-55. September showed the lowest av price, $7.52 per barrel. Prices generally str, en in October and subsequent months f about mid-winter. The highest monthly pri ceived by farmers was $9.19 per barrel in’ ruary. The average of the February prices; peak) was $1.67 greater per barrel than average of the September prices (the low) d the 10-year period. The difference in the seasonal behavior in the late Forties (1945-46 through 1949-5 contrast to that in the early Fifties (19 through 1954-55) is shown by the light, b lines which depict the 5-year periods (Figur, TAES bulletin 848, Seasonal Price Change Commercial Storage Costs, by Clarence A. l» and Howard S. Whitney, gives a complete an 1; of these differences and seasonal price; “ ments. 5' Returns from On-iarm Drying and Storage ’ A comparison of the returns from dryin? storing on the farm with selling at harves (September) indicates that drying and s on the farm usually shows a clear profit. total cost of drying and storing at drying ca q ranged from 66 to 90 cents per barrel dep, on the type of unit, Table 5. The average s 1; price spread was $1.67 per barrel. Howeve was the spread between dried rice at harvest, and in February. By having on-farm dryi . storage, the farmer also saves drying costs, ‘ generally amount to approximately 50 cen barrel. The benefits of having on-farm J and storage as opposed to selling at harve amount to $2.17 per barrel. The typical costs of on-farm drying and storage for t stalled auger unit, 79. cents, subtracted fro benefit of $2.17 indicates a profit of $1. barrel from the ownership of an on-farm n, 11. BENEFITS or DRYING AND STORAGE com- ~ PARED wrm cosrs Price difference Benefits Benefits larger between difference than cost September plus (installed and February , drying costs auger unit) — — — Dollars — — — 0.04 0.54 no 1.34 1.84 yes 3.49 3.99 p yes 1.94 2.44 yes 0.90 1.40 yes 2.11 2.61 yes 2.51 3.01 yes 2.27 2.77 yes 1.46 1.96 yes 0.73 1.23 yes § e costs of drying and storing on the farm y; compared with the benefits received from : and storing, during 1945-46 through 1954- able 11. The benefits were smaller than the in only one of the seasons, 1945-46. This 1= tes that the average returns over the years vorable to drying and storage on the farm posed to selling at harvest, and the odds are ‘good in any 1 year that drying and storage ay a. profit. Thepast seasonal pattern would not be ex- pected to continue if a substantial number of rice growers started storing their rice on the farm and Withheld their rice from the market at harvest time. This action would tend to raise the price at harvest time and lower it later in the year, thus reducing the seasonal price spread. Payoff Period In evaluating the feasibility of owning on- farm drying and storage it is necessary to deter- mine the number of years it would take to pay out the investment. In computing this period, it was assumed that the rice grower would have to pay cash costs each year. These cash costs include the operating costs and the allowances for taxes, in- surance and repairs. Using the installed auger unit, as an example, and assuming that the drying capacity is utilized, the operation costs would amount to $2,926 (7,700 barrels times 38 cents per barrel). The taxes, insurance and repairs would amount to $463 per year, making the total cash costs $3,389 per year. The average benefit is $2.17 times 7,700 barrels or $16,709. Sub- tracting cash costs from the benefits indicates a surplus for repayment of the loan and interest. of $13,320 per year. ._‘! l I I 1 l The ten-year period: l prices, 19145-110 through 19514-55. , 1 - / \_The earl fifties: _ 011g "' o * i1, The late forties: prices, 1955-L5 through 19h9—50. prices , Average of monthly Average of monthly Average of monthly l I l l l I Aug . Sept . Oct . Nov , De c. Feb. Mar. Apr. May June July ' e 11. Seasonal price behavior of rice. Texas, 1945-55. Prices used in the bulletin are the midmonth Texas farm reported by the Crop Reporting Service, U. S. Department of Agriculture. 11 Assuming a first cost 0f $36,245 for the build- ing, fans, motor, grain moving and testing equip- ment and an interest rate of 6 percent, the farmer could payoff in a little over 3 years. For example, the first year the interest on the loan would be $2,174. After paying the interest and $11,145 on the principal, the balance the second year would be $25,100. The rice grower would have to pay a balance of $1,398 at the end of 3 years. Even with the more conservative assumption that the future benefits would be equal to the third lowest year, $1.40 in 1949-50, Table 2, the rice grower could pay off the debt in a little over 5 years. Using this price or benefit assumption, the rice grower would have $7,381 to apply each year on the interest and the principal. At the end of 5 years a balance of $2,404 would exist. In using the payoff to evaluate the feasibility of owning on-farm drying and storage units, no assumptions are made about the life of the build- ing and equipment. When the overhead costs are computed, assumptions need to be made about the life of the building in order to compute the de- preciation values. In both cases considered, the investment could be paid off in a shorter time than a very conservative estimated life of the units. Non-measurable Returns and Costs The returns and costs of owning on-farm dry- ing and storage equipment, presented in the pre- ceding sections, are relatively easy to put in dollars and cents. However, there are other costs and benefits that are hard to evaluate in dollars and cents, which may outweigh measurable costs and benefits. Non-measurable Costs The management and operation of on-farm drying and storage equipment is time consuming. The rice grower must spend time to operate the fans, make moisture tests and check for insects. There is risk involved to the rice grower from falling prices or deteriorating grade and milling yield. Although good management may reduce these risks, the rice grower must bear them. Non-measurable Benefits During certain periods much rice may be harvested during a short time in a particular area and the rice grower may be “shut off”. at the dryer. If the rice is cut and in the truck, there is a possibility of the rice going out of condition, with a resulting economic loss. If the rice grower has to wait too long to continue harvesting, the rice may suffer a loss in quality since it needs to be harvested at a definite stage of maturity for high quality. If the rice is left in the field beyond this stage, the milling yield may be reduced great- ly and the risk of loss in yield increased due to storms. If rice is not cut at the proper stage of maturity, the price may be reduced two to three dollars a barrel for the rice grower. With on- 12 farm drying and storage, the rice growe ' harvest his rice at the proper stage of math without regard to other factors. J Many of the on-farm drying and stora stallations, such as the quonset type or a stra sidewall building, can be used in off-s periods or in low-yield years gfor machinery supply storage. Round binsncan be used to; other grains and seed. i PLANNING SPACE REQUIREM Many types and sizes of units for on; drying and storage are available. One or s bins may be purchased. The quonset-type . ing or the straight-sidewall building also’ be purchased in different sizes and with dif A bin arrangements. f The two main factors to consider in w on the unit are the relationship between de A utilization and costs and drying capacity. g 8 shows that the cost per barrel increas utilization decreases. Rice should not be 1 above an 8-foot depth with most types of g ment. If too small a unit is purchased, an attempt is made to dry above an 8-foot dept danger of loss in milling yield and grade -_ If too large a building is purchased, the head costs lead to a large total cost per v, However, the minimum amounts of rice nec to “break-even” are rather low with av_ benefits and the more conservative assum that future benefits will be equal to the lowest year in the past, Table 12. The min { number of barrels is less that 50 percent of ~ capacity for all units except the air conveyor. under the conservative assumption of vf benefits. < The size of the unit should be based 0 expected acreage of rice to be planted. 1 acreage controls, this basic acreage usuap known by the individual rice grower. ' Once the basic acreage has been dete there are at least two ways to determine t of the unit-—on the basis of average yields. the basis of maximum yields. With an ex‘ acreage of 100 acres and an average yield, barrels to the acre, a unit with a 2,000- drying capacity should be bought. During L. with above-average yields the excess rice ', TABLE 12. MINIMUM NUMBER BARRELS REQ BREAK-EVEN .~ Minimum Mi- 7 Drying barrels ham Type unit capacity, with average third 1 barrels beneiit y f ($2.17) ($1 , Building . ‘ Portable auger 4.400 - 934 Installed auger 7.700 ‘ 1.745 Air conveyor 4.400 1.251 Round bin 2.300 395 _~ at harvest. This would involve some loss the years with above-average yield, but f the years with below-average yields the gr barrel would not beas large as if a unit maximum capacity had been purchased. n expected acreage of 100 acres of rice and 'mum yield of 25 barrels to the acre, a unit capacity of 2,500 barrels would be pur- . This alternative would lead to higher ; per barrel during average and below- j years. However, the loss incurred by p at harvest in years with above-av- yields with capacity based on average ay be greater than the increased costs dur- ‘irs with averageor below-average yields fcapacity based on maximum yield. With ty based 0n maximum yields, the rice _‘ would also have extra drying space avail- is a “turning bin” which could be used in f high-moisture rice and difficulty in drying V~_ most years. REDUCING COSTS rious steps can be taken in the operation management of an on-farm drying and unit to cut costs. Insect Control f good clean-up program before the grain is f helps control insects during storage and "'- insect control cost. The bin walls and the around the buldings in which grain is to red should be cleaned throughly and sprayed _ Ia residual spray. By checking carefully for 1 , at least once a month during storage, the rower can get a head start on the insects ghus reduce insect control cost. Hauling from Field to Bin v eful planning may reduce the cost of portation from the field to the building. farmers reduced this extra hauling cost by . their own or neighbors’ trucks to bring the _rom the field to the bin. Auger carts prob- fwould" be cheaper than hired trucks. Al- h using auger carts involves more labor, _ l planning as to the number of carts and to operate them reduces confusion and ex- '. Some farmers do not have the opportunity p this cost, especially if considerable distance olved in hauling. tilization of Equipment and Labor é rice grower can reduce his cost below the capacity cost. If he has one variety of wnd plantingidates permit harvesting over a A.» of time, all the bins can be utilized to dry rly rice. The later rice can be dried on top ' early rice, which utilizes the structure over foot depth (drying capacity if the bin is p in a short period of time with Wet rice). This procedurewould not be possible if the rice grower had different varieties of early rice since varieties should not be mixed. Good planning in the use of labor for loading the rice into the bins, moving the rice from bin to bin and moving it out is a potential cost reduction. Following Recommended Operating Procedure ~ _ When milling yield and grade are not main; tamed, the cost is very great. Most quality losses can be prevented by good management and follow- ing recommended operation procedures for drying and storage. ACKNQWLEDGMRNTS Acknowledgment is expressed to the Feed and Grain Section, Market Organization and Costs Branch of the Agricultural Market Service, U. S._ Department_of Agriculture, for help in planning and carrying out this study. Acknowledgment‘ also is expressed to field workers, Robert Hagen, Vernor Bippert and F. A. Wolters, and to W. S. Allen, C. A. Moore and, H. S. Whitney. Special acknowledgment is made to the rice growers who cooperated with the study. Photographs of installed auger and quonset building are through the courtesy of the McRan Company, Houston, Texas. APPENDIX A Recommendations for Drying and Storing Rice in Farm Storage Bins _ The following recommendations for drying rice with unheated air and for storing it when dry are based on results of tests conducted at the Rice-Pasture Experiment Station near Beaumont. _ A tight structure is essential to protect stored rice from the weather, insects and rodents. Locate storage bins on well-drained areas to prevtent leakage of moisture around the floor-Wall _]011’1 s. ' _ Select drying equipment that will provide a minimum air-flow rate of 9.0 cubic feet per minute per barrel. The fan should be capable of delivering this much air uniformly through an 8-foot depth of rice. A good clean-up campaign is necessary for effective insect control during storage. Before storing new rice, the bin walls and the area around the storage buildings should be cleaned thoroughly and sprayed with a residual spray. Do not attempt to dry rice that contains ex- cessive amounts of foreign material or “trash.” This material accumulates in pockets, causes air to channel and results in musty and heat-damaged 13 rice. Proper adjustment of combines at harvest will reduce the amount of trash. Fill bins to a maximum depth of 4 feet if the initial moisture content of the rice is 20 to 22 per- cent, and to a maximum depth of 6 feet if the moisture content is 18 to 20 percent. Push air through the rice until the moisture content in the top foot is reduced to about 16 percent. Then, add more rice and continue pushing the air until the moisture content of the rice in all parts of the bin is reduced to 12.5 percent or less. If the moisture content is less than 18 percent, bins may be filled to a maximum depth of 8 feet. Push air through the rice continuously until the moisture content of the top foot of rice is reduced to about 16 percent. After the moisture is reduced to this level, complete the drying to a maximum of 12.5 percent moisture by pushing air through the rice only when the outside relative humidity is 8O percent or less. Cut the fan off if it rains during the period of continuous fan operation. When rainy periods last longer than 24 hours, keep the rice cool by operating the fan 2 to 3 hours each day until the weather clears. Take samples for a check on moisture content at least twice a week during the drying opera- tion. The rice should be probed at 8-foot in- tervals over the surface of the rice and samples drawn from the bottom, center and top foot. The rice from each level should be mixed thoroughly and a moisture check made for each level. After the rice is reduced to a moisture content considered safe for storage, the temperature of the rice is a good indication of its condition. When rice is checked for moisture content, “hot spots” usually can be detected by feeling the temperature of the probe as it is withdrawn from the rice; or a probe thermometer can be used. Aerate the rice to reduce any hot spots which may develop. Aerate as often as necessary during the winter months to reduce average grain temperatures to 60°F. or less. Operate the fan when the outside air temperature is 10°F. or more below the temperature of the air leaving the bin. Fans should not be operated during periods of fog or rain. Determine insect population monthly by tak- ing full depth probes in all parts of the bin. APPENDIX B ~ A Case History oi Management of an On-farrn Rice Dryer Although most farmers have little difficulty in operating their on-farm dryers, a case history on the management for one bin of rice shows the difficulties that can occur. This case history points out the importance of management in suc- cessful on-farm drying and storage. 14 The bin was loaded with Century Patna, a depth of 4 feet on September 5. The h; content of this rice was approximately 19 v The fans were started. immediately. On _ ber 8 more very high moisture rice was a the bin, bringing the depth to 8% feet. , of this added rice had a moisture content r» 23 percent. ‘ The rice in the top 3 feet of the bin " above 18 percent moisture from Septem October 1. On October 1 the top 4 fee turned with shovels. This operation drop moisture to 161%; percent. On October 1 mo, was added to the bin, bringing the total '- over 9 feet. The moisture content of this i rice was approximately 16 percent. Th were operated day and night until Octo At this time the top 3 feet had a moisture of 15 percent. Thereafter, the fans were r7 during the day only and the top 3 f, dropped to slightly over 12 percent moist j, October 31. The top 3 feet were the ' 1n moisture since the fans were forcing w through the rice, causing the rice to dry in, from bottom to top. ii This operation was mismanaged in a " of ways. First, very high moisture rice, 0, percent, was put into the bin. It is not i_ mended that this high level of rice be Second, the bin was filled over 9 feet deep recommended depth is a maximum of 8 fee ‘ the bin is filled in a short time. Increasi depth to 9 feet reduced the air flow bel recommended rate. The air flow at 9 a 6.1 cubic feet per minute per barrel; the I mended rate is 9 cubic feet per minute per i The addition of an extra foot of rice redu air-flow rate considerably. Also, during m September and October the relative humidi high and many rainy days occurred. ( favorable drying weather combined wit proper management did not yield good’ for the rice grower. ~ _ Samples of rice taken from the bin and: 1n thin layers in the open air gave the fol milling yields and grade. The top level | grade of No. 2, with a milling yield of 56 r head rice and 62 percent total rice. The r level had a grade of No. 2, with a milling 48 percent head rice and 57 percent tota The bottom level was a grade of No. 1, " milling yield of 46 percent head rice and , cent total rice. * Samples taken from the bin after f was dried by the rice grower gave the fol f results. The top level was sample grade o! there were 135 “heat damaged” kernels =f grams. Although the grade was lower siderably, there was only a slight decrease it ing yield, 50 percent head rice in the dry :3 compared with 56 percent in the check sam, 61 percent total rice as compared with 62 ~ in the check sample. 'iddle level also was sample grade be- » e were 144 “heat damaged’? kernels in gs. . In the middle level milling yields percent head rice in the dry sample with 48 percent in the check sample. s; 62 percent total rice in the dry sample l‘ ed with 48 percent in the check sample. ttom level graded N0. 2, a reduction of e. There also was a slight increase in ,_'eld in this level. The milling yield of mple was 5O percent head rice com- h 46 percent for the check sample and 59 percent total rice for the dry as compared to 56 percent for the check sample. This case history shows that the use of on- farm drying and storage equipment to dry rice is not a “foolproof” operation. Slight errors in management combined with unfavorable drying conditions lead to some economic loss for the rice grower. This rice was not eligible for loan with the Commodity Credit Corporation and had to be sold on the open market. The loss was not .as great as it might have been, however, since there was no reduction in milling yields. 15 Wsents a coordinated effort to solve the many problems relating to a common objective or situation. State-wide Researc w" ‘k The Texas Agricultural Experiment Sta is the public agricultural research age Location of field research units in Texas main- of the State oi Texas’ and 1s one oi i1 t' d b th T A ' lt l E ' t . Siififon GKd cfopeizfiig 55.23;“ xpemnen parts of the Texas A6=M College Syst ’ IN THE MAIN STATION, with headquarters at College Station, are 16 subject-matter departments, 2i departments, 3 regulatory services and the administrative staff. Located out in the major agricultur, of Texas are 21 substations and 9 field laboratories. In addition, there are 14 cooperating stations.‘ by other agencies. Cooperating agencies include the Texas Forest Service, Game and Fish Comn1is Texas, Texas Prison System, U. S. Department of Agriculture, University of Texas, Texas Technologi lege, Texas College of Arts and Industries and the King Ranch. Some experiments are conducted otr and ranches and in rural homes. A RESEARCH BY THE TEXAS STATION 1s organized by programs and projects. A program of research“ Search project represents the procedures for attacking a specific problem within a program. THE TEXAS STATION is conducting about 400 active research projects, grouped in 25 programs w clude all phases of agriculture in Texas. Among these are: conservation and improvement of soil servation and use of water in agriculture; grasses and legumes for pastures, ranges, hay, conservati; improvement of soils; grain crops; cotton and other fiber crops; vegetable crops; citrus and other su cal fruits; fruits and nuts; oil seed crops——other than cotton; ornamental plantse-including turf; bru weeds; insects; plant diseases; beef cattle; dairy cattle; sheep and goats; swine; chickens and turkey mal disease and parasites; fish and game on farms and ranches; farm and ranch engineering; fa, ranch business; marketing agricultural products; rural home economics; and rural agricultural eco ’ Two additional programs are maintenance and upkeep, and central services. i ‘s; .\ RESEARCH RESULTS are carried to Texas farm and ranch owners and homemakers by specialists and ‘ agents of the Texas Agricultural Extension Service. i