Across the Corn Belt, farmers have been faced with more derecho storms and wind episodes that cause damage to older facilities. Jake Armstrong with Cameron Grain says the economics of replacing these facilities are not what they used to be.
“You’re probably not going to rebuild there — you’re probably not going to rebuild exactly,” says Armstrong. “You’re probably going to modernize, probably going to get bigger. You’re probably going to do some things differently that require more steel, and the cost of grain bins is not nearly as cheap as it was even five to ten years ago. The economics of building a 10,000-bushel bin are just no longer there.”
Armstrong adds that insurance has become another major factor in the decision-making process.
“A side that we don’t like to talk about, but that impacts the grain industry, is insurance,” Armstrong says. “I have two insurance companies in the whole state I can choose from, and the other one doesn’t want me because I’m a customer of the other one. It’s a huge cost, and premiums keep going up. But we can’t go uninsured with a $15 million asset sitting out there — you’re just not going to do that.”
Derechos are not new. The term derecho was coined in 1888 by Dr. Gustavus Hinrichs, who referred to it as a “straight blow of the prairies.” Today, these storms appear to have become more common as the climate changes and warms.
