The Enid News and Eagle, Enid, OK

January 26, 2013

What’s storage building worth?

From CNHI News Service
Enid News & Eagle

ENID, Okla. — It is widely accepted that storing farm equipment under a shelter is better than storing it outside and hay stored in a barn is better than hay stored in the field.

But how can we determine just how much a farm storage building is worth? The answer is different for every operation, but there are some guidelines that will help producers make an intelligent decision about whether or not you can afford a building — or afford not to have one.



Cost of owning a building



The cost of a building depends on many factors, including the amount of side enclosure, type of floor, height and type of construction.

Depreciation is calculated as the beginning value minus the ending value divided by the useful life. For instance, if the building were worth $5,000 after 20 years, the actual depreciation would be $1,000 per year ($25,000-$5,000/20 years).

Instead of using depreciation and interest, some producers may prefer to use annual principal and interest payments. Interest is calculated based on the average value, which is the beginning value plus the ending value divided by two.

Taxes and insurance are location dependent, so readers should consult their local tax assessor.

Annual repairs will vary considerably. In many years, there likely will be no repairs. However, in other years repairs could be considerable. Readers are encouraged to calculate a realistic average annual repair estimate or consult with their builder and include that cost as part of the annual expenses.



Storing machinery inside



In a nationwide survey, farmers were asked about the resale value of their farm equipment at trade-in and whether or not it was stored inside when not in use. Farmers who traded their equipment after five years got significantly more for tractors and other equipment that were stored inside than for equipment stored outside.

A 3 percent savings per year on barn-stored equipment is a conservative estimate of storage benefits. Additional savings can be expected from reduced down time. Deterioration of rubber and plastic parts due to exposure to the sun is a major contributor to breakdowns and increased maintenance time. It has been estimated that barn-stored equipment has less than half the down-time of field-stored equipment.



Barn hay storage



A number of studies have been done comparing various storage methods for large round bales of hay. The results varied greatly depending on the weather during the storage period.

The kind and quality of hay, tightness and size of bales, and the length of time stored also affect losses. In each test, though, it was clear a significant amount of dry matter was lost in field-stored hay, and the quality (digestibility) of the remaining hay was lowered.

Size of the bale affects losses because typically the outer 4 to 6 inches of the bale is lost, and that outer layer represents a higher portion of a small bale than a large bale. The outer 6 inches of a 4-foot diameter bale represents about 44 percent of the bale, while the same outer 6 inches of a 6-foot diameter bale represents 31 percent of the bale.

If we start with a 1,000-pound bale at 85 percent dry matter and 54 percent digestibility, we have (1,000 multiplied by 85 percent) equals 850 pounds of dry matter and (850 multiplied by 54 percent) equals 459 pounds of digestible hay.

If that bale is stored on the ground, losing 30 percent of its dry matter and lowering the digestibility to 45 percent, we now have (850 multiplied by 70 percent) equals 595 pounds of dry matter and (595 multiplied by 45 percent) equals 268 pounds of digestible hay. This represents a loss of 42 percent of digestible hay. The actual savings on hay storage depends on the value of the hay, the length of storage and the weather during the storage period.

Should you store all of your hay in a barn? Not necessarily. Hay harvested late in the season and fed early in the winter would have much lower loss than hay stored over a longer period. One strategy would be to store early hay in a barn, mid-summer hay under tarps, and late hay in the open (if barns and tarps are all full).



General recommendations



• Open-sided barns should be oriented with the long axis east and west to minimize the amount of sun intrusion into the building.

• If only one side of the barn is open, it should be facing away from prevailing wind (generally south), to minimize rain being blown into the barn.

• Sidewalls add protection to both equipment and hay, but add significantly to the cost of the building. You should get a bid on different types of buildings and do your own analysis using the guidelines in this publication.

• Buildings for hay storage should be as open as possible in the gable ends (peak of the roof) to allow moisture to escape as the hay dries while in the barn. Otherwise, condensation and rust will occur on the inside of the roof. Ridge vents should be considered in large barns. One hundred tons of hay will give off about 5,000 pounds of water during curing, and this must be removed by ventilation.

• More large round hay bales can be stored in a barn by stacking the bales on their (flat) end rather than on their (round) side. This can be done with a 4-foot front-end-loader fork. It does, however, take a little more time and effort than storing on the side.

• Make sure height of the eaves (vertical clearance) is high enough to fit your needs (usually at least 14 feet). Nothing is more frustrating than realizing one more foot of ceiling height would allow you to put another layer of hay bales in the barn or that your barn is one foot too short for the new combine.



Information for this story was provided by Farm Talk, of Parsons, Kan.