Big white grain bags sold by Big John Mfg of Nebraska are flying out of the door. “In the last two years we’ve done more [business] than we have in the previous five years together,” says Daniel Fritz, product development manager at the farm equipment supplier.

The white polyfilm and nylon mesh bags are used for temporary storage of surplus crops. With US corn and soyabean harvests over and grain prices at historic lows, demand has been high.

The amount of grain in storage, and where it is stored, has become a preoccupation for traders, merchants and analysts. Three consecutive years of bumper harvests have pushed prices — particularly for corn — below many farmers’ cost of production. As a result, some are refusing to sell until the market rebounds.

Hal Reed, chief operating officer of The Andersons, a US-based grain merchant and ethanol producer, says of farmers: “They put the grain in [storage] and say basically, ‘It’s too cheap for me to sell right now. I’m going to wait’.”

Farmers built up strong finances after years of high commodity prices. They invested some savings in grain bins. US on-farm storage capacity totalled 13.1bn bushels as of last December, up 7pc from five years before, according to the US Department of Agriculture.

Growers are filling their corn bins and refusing to sell until the market rebounds

Rather than sell grain at a loss, many farmers have chosen to hang on to their inventories and wait for the market to rebound.

“They’re financially pretty well off. They’ve got space built. They don’t need the cash flow,” says Mr Reed.

A related trend has played out in Argentina, where farmers have hoarded crops in grain bags to protect against inflation and currency devaluation. Mauricio Macri, the newly elected president, has pledged to reduce or remove export taxes and restrictions, a move that could release some of these inventories into world markets.

In the US, as farmers have held on to stocks, corn inventories have surged 40pc from a year ago to 1.7bn bushels just before this year’s harvest. The stronger dollar has also weakened US grain exports, trapping more inside the country.

The lack of selling has hit agricultural traders that buy grain from farmers. Archer Daniels Midland, one of the biggest grain handlers and processors, said farmers’ propensity to hold on to crops contributed to an 11pc fall in third-quarter operating profit for its merchandising and handling unit. Juan Luciano, ADM chief executive, said as of early November, US farmers had only sold about 30pc of their new crop, while in normal years it would be about 45pc.

The stand-off between farmers on one side and merchants and consumers on the other has lifted the spot price of corn above benchmark futures in some places, an abnormality in the weeks after harvest.

For instance, the price of corn in Chillicothe, Ohio, where ADM has a grain elevator, was 25 cents above the $3.65-a-bushel price of corn futures this week on the Chicago Board of Trade.

“Storage has helped keep prices a little bit higher,” says Stefan Vogel, head of agri commodity markets research at Rabobank. Nowhere is the trend stronger than in the eastern US corn belt — states such as Ohio and Indiana, where heavy rains early in the growing season led to smaller crops at harvest.

The premium, or ‘basis’, for physical corn in parts of the two states indicates tightness in local markets as businesses such as ethanol plants and livestock feed mills compete with grain elevators for supplies.

The Legacy Farmers Co-operative in Ohio this week offered up to 15 cents over the price of Chicago’s CBOT corn futures. Mark Sunderman, Legacychief, says: “It is unusual that directly after the harvest, we would have a basis that is over CBOT.” He noted that a higher cash price was necessary to entice farmers to part with their corn.

As some farmers run out of space in bins, they may turn to grain bags, rings and tarps. Mr Fritz at Big John Mfg says some of his customers still have grain from two years ago. “Their bins are full with last year’s and a little from a year before,” he says. “Now they’re looking to store this year’s on top of that.”

Published in Dawn, Business & Finance weekly, November 30th, 2015