INDIANOLA, Iowa (DTN) -- Slogging through a wet field with your combine is no fun. Having to wait for your dryer before you can continue harvesting is downright frustrating. If you are looking to upgrade your grain drying facilities, USDA is making $99 million available in grants and loans for fiscal year 2010 to install renewable energy and energy-efficient projects (such as grain dryers) on farms, according to figures provided by Teresa Baumhoff with the USDA Rural Development program in Iowa.

Payback on more energy-efficient dryers can be substantial even if you self-finance. In farm energy auditsconducted by Purdue University in 2009, farmers could save an average $35,000 per year in energy efficiency improvements with a payback of about eight years. Using 2008 figures of 11 cents per kilowatt-hour for electric dryers and $199 per gallon for gas dryers, Purdue research showed the payback for a new energy-efficient dryer could be as short as four years.

USDA hopes to prod energy conservation with federal grants under its Rural Energy for America Program (REAP). For farmers and commercial grain facilities to replace their clunker grain drying systems it pays up to a maximum 25 percent of the cost of the entire project -- including concrete and electrical work in addition to the cost of the dryer. Maximum grants are $250,000, although grant requests as low as $1,500 for energy efficiency improvements will be considered. Your proposal can be part-grant, part-loan with borrowing terms stretching up to 20 years or the useful life of the system.

To qualify for the competitive rural development grants, you need to show how much you can save in efficiency costs, comparing the current actual cost of drying on your farm with a simulated drying year. Bin companies will generally aid you in the grant-writing process.

"Keep track of your drying costs this fall," said Dean Dodd with Sukup Manufacturing in Sheffield, Iowa. "With as tough a drying year as it has been, it should be relatively easy to show a 30 percent to 35 percent increase in efficiency with a new dryer. We're not done with harvest, and as temperatures get colder and with the high humidity/rain we've had, it is not too difficult to show inefficient grain handling systems."

Brett Walker, who farms near Waverly, Iowa, took advantage of the program and bought a new energy-efficient, 20-foot continuous-flow dryer this year. It made his life easier this fall. Walker stores 90 percent of his corn on his farm. "I haven't figured out my total drying costs yet. I'm just trying to get my crop out of the field," Walker said. When he started harvesting corn in mid-October, the moisture in the grain was as high as 32 percent.

Mark Mueller, who also farms near Waverly, is glad he had a large 36-foot, continuous-flow energy-efficient dryer installed a few years ago, but it still is not keeping up with his combine this fall.

"When we started picking corn, the moisture was 28 percent to 30 percent, and I dry everything down to 14 percent." By mid-November, moisture fell to 23 percent, but that still means he has to dry nine points of moisture out of his corn. Overall, however, his on-farm costs should beat what commercial elevators are billing this season.

COST OF DRYING

Dodd with Sukup Manufacturing said elevators are generally charging 5 cents per point of moisture removed, and that's what Iowa State University uses in its estimates. In evaluating actual on-farm drying costs for the USDA program, Dodd said, last year's corn drying costs on some farms were as low as 2 cents per bushel per point with other farms' grain drying systems costing well above 7 or 8 cents per bushel per point of moisture removed.

"With this fall's poor drying conditions and an inefficient dryer pushing drying costs above 8 cents per bushel per point, you can easily show a savings of 50 percent with a new drying system in applications for the Rural Energy for America Program," Dodd said.

For fiscal year 2009, of the 373 projects in Iowa that were awarded funding for renewable and energy efficiency projects, 288 were for energy efficient grain dryers.

Details of the energy efficiency grant and loan program can be found at USDA's Rural Development website: www.rurdev.usda.gov/rbs/busp/9006grant.htm

Some growers also combine projects with the Farm Service Agency's storage facility loans. Funds can be applied to grain storage and handling systems and are amortized up to 12 years with a fixed interest rate of 3.625 percent currently.

http://www.fsa.usda.gov/…

Purdue's energy audits and economic analysis on high-efficiency grain dryers is at http://www.ces.purdue.edu/…

(MZT/AG/KM)

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