Net Present Value Analysis of an Automated Grain Aeration System Technology on Stored Corn
Paul Popelka, Gothenburg, NE, defended his thesis, “Net Present Value Analysis of an Automated Grain Aeration System Technology on Stored Corn,” on April 9th. He is the Operation Manager for Frito-Lay in Gothenburg. Popelka is a spring graduate from Kansas State University with a Master of Agribusiness (MAB) degree.
Since corn processing facilities are not always capable of storing enough grain needed between harvests, many farmers have constructed on-farm storage. Storing corn for months at a time increases the risk of spoilage for farmers. To control the risk of spoilage, farmers aerate corn to ensure quality when delivered to the processor.
“Aerating the corn properly reduces the risk of spoilage, but over aerating can reduce the selling price due to shrink and excess drying charges,” Popelka said. “Aeration techniques used to monitor and reduce the properties of corn are labor intensive and can result in a reduced selling price. Automated aeration systems may be an option to accurately monitor corn quality and control the physical properties of corn to targeted goals. In addition to controlling spoilage, there are other savings using an automated aeration system.”
The objective of Popelka’s Master of Agribusiness thesis was to examine whether using an automated aeration system can provide profits through marketing opportunities, reduced energy bills, and reduced drying costs during corn delivery to the elevator.
Popelka studied four privately owned 60,000 bushel grain bins outfitted with the IntelliAir BinManagerTM automated aeration system. Each bin was analyzed to determine if the energy savings were enough to offset the initial installation cost and annual expenses over a ten year time horizon.
“Based on the results, corn growers should consider installing an automated aeration system. More research is needed at different corn moisture levels and bin capacities but under the conditions examined, the data suggests this is a valuable investment,” Popelka said.
Dr. Allen Featherstone, Professor of Agricultural Economics and Popelka’s thesis advisor, said, “As the global population continues to increase, it becomes important to maximize the efficiency of converting raw material into a consumable product. Mr. Popelka was able to analyze a situation where it is economically feasible to use an automated aeration system that reduces energy use to improving the quality of corn for processing.”
The full thesis publication can be found online on Kansas State University’s Research Exchange at http://hdl.handle.net/2097/19034.