Nebraska Grain and Feed Association
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NE Grain & Feed

NGF STRONGLY OPPOSES ELIMINATION OF MINIMUM STORAGE CHARGE

SUPPORTS SLIGHT INCREASE TO MAX STORAGE RATES

 

The Nebraska Public Service Commission (PSC) will meet on May 19, 2010 to consider increasing the maximum handling and grain storage rates state licensed elevators can charge depositors, and eliminate the long held regulation which allows state licensed grain warehouses to implement a minimum storage charge.  The Nebraska Grain and Feed Association (NGF) announced this week that it will support a slight increase in the maximum storage rates for corn and soybeans, and strongly oppose any attempt by the Commission to eliminate the 180 day minimum storage provision.  The PSC Order can be downloaded here

After considering the input of Association members to determine what the maximum storage rate for corn and soybean should be, NGF will propose an upward adjustment to the Schedule “A” grain storage charge for storing corn and other grain by one cent, to 5 cents per month, and soybeans rates by 1.5 cents, to 7 cents per month.   The membership was silent on the $.33 maximum handling charge, therefore the Association will support leaving the current handling charge at its present maximum.

NGF is particularly concerned with the possible elimination of the 180 day minimum storage charge, Rule 4.  On Wednesday, May 6, Grain Department Director John Fecht informed representatives of NGF and the Nebraska Cooperative Council (NCC) that he will in fact testify before the PSC and recommend elimination of the minimum storage charge.  In an e-mail delivered to the NGF and NCC on Wednesday, Fecht stated;

I have come to the decision that my testimony at the hearing will be for the Commission to consider elimination of the minimum storage provision as Note 4 now provides.  I am convinced that a producer should only pay storage for the actual number of days he has his grain in storage.  Managers have the ability to assess a handling fee and I don’t have a problem with that.”

The Association is opposed to the elimination of the minimum grain storage charge elevators can assess due to the rising costs associated with new and existing state and federal government regulatory compliance, insurance, labor, repairs and other expenses.   The difficult economy has had a negative impact on many grain and feed firms across the state and the minimum storage charge has helped to defray the increased costs of doing business.  NGF will argue that the provision has been in place for well over 30 or so years and farmers are well aware of its existence.  Producers understand the costs associated with running a grain warehouse and the responsibility the warehouseman has maintaining the integrity of the deposited grain.  

NGF also fears that some smaller grain handling operations that have come to depend upon charging a minimum storage rate as an established part of their operating income could face substantial financial challenges and, in some cases, force the closure of these facilities and further limiting competition.  NGF has heard from several members who indicated that if the minimum storage provision is eliminated, they will surrender their state warehouse license and obtain a federal license instead.

The public hearing is scheduled for May 19, 2010 at 1:30 PM Central daylight Time, in the commission hearing room.  The address for the PSC is 300 The Atrium, 1200 N Street, Lincoln, Nebraska.  Association members concerned about the potential elimination of the minimum storage charge are strongly encouraged to attend this hearing and voice your opposition. If you have any questions or concerns, please call NGF at 402-476-6174.    

 

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August 4, 2017

NeGFA Summer Meeting & Golf Outing

York Country Club

York, NE

 

 

 

 

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Nebraska Grain and Feed Association
4600 Valley Road, Suite 416
Lincoln, NE 68510-4844
Phone: 402-476-6174
Fax: 402-476-3401