Nebraska Grain and Feed Association
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NE Grain & Feed

WHERE (GRAIN) QUALITY IS JOB 1

 

By Diana Klemme, V.P.

Grain Service Corporation
3340 Peachtree Rd, Suite 1910
Atlanta GA  30326
ph: 800-845-7103
email:  diana@grainservice.com

Ford introduced this advertising slogan in the 1980’s to restore consumers’ faith in Ford’s products. Those words and commercials didn’t turn Ford around immediately, in part because Toyota and Honda continued to beat all US carmakers on quality.  Now Toyota is under fire on the quality issue for their massive recall and suspension of sales to remedy a potential accelerator problem.  Toyota may recover, and Ford’s reputation for quality has fared well in recent years.  But this is a vivid reminder of how quickly problems can tarnish a firm’s reputation as a dependable supplier. 

This year US grain firms face a challenge nearly as big as Toyota’s.  Harvest was slow and wet, with most elevators struggling to dry corn that came in at a wide range of moisture readings, sometimes at spreads of 5-10% in a single day.  Grain dryers aren’t capable of drying such corn to a single level; all they do is lower the moisture of all kernels by about the same percentage.  Corn going into a dryer at 20% might come out at 15%; 27% corn going into the dryer at the same time probably comes out at 22%.  Some managers report corn in bins that was dried to 15 to 15.5% average still has problems with wetter kernels heating up despite heavier air flow than usual through the fans.  These problems are likely to worsen, especially as temperatures warm in March.  (The only advantage in farm bins is that the intraday moisture variance on the wet corn is potentially lower than at an elevator.)

Even worse, a lot of elevators were simply unable to keep up with the inbound wet corn, and piled the excess on the ground, counting on cold temperatures and quick action to minimize the risk of loss.  Photos have circulated of black and steaming ground piles despite weeks of subfreezing and sub-zero temperatures.  This is not a good omen of what lies ahead.  This doesn’t even touch on mycotoxins, which remain a distinct problem. 

Corn in your bins may have fairly even moisture, but managers also report a lot of corn is breaking up as it’s handled, creating high FM.  This is causing rejected loads, railcars that have to be unloaded or similar problems.  This is a year when buyers need dependable suppliers, not a lot of rejected loads or delayed trains.  There are some geographic areas where harvest was kinder to farmers and elevators, but those areas seem to be relatively few and far between.  For now it’s much safer to assume you have problems, even if you don’t know about them yet.

The export market has already begun to toughen specs and/or raise discount rates to discourage shipping higher FM to the Gulf. The value of corn screenings has dropped to 60% or even lower in some areas instead of the more typical 90%.  Creating FM while corn is handled will be a major cost for elevators; they weren’t able to discount the corn on the inbound side.  Generating 2% FM through corn breakage is a loss of around $1 per bushel on that 2% if screenings are only worth 70% of the value of corn.  It’s just as costly if the ‘loss’ comes in the form of a hefty FM discount scale. 

Gaining 2-3% FM on a load or two isn’t a problem; generating 2-3% FM on your annual handling volume is a major problem.  We may sound like a broken record but this is a year to focus on operations issues.  Include your outside staff in discussions about the costs of corn going out of condition, or of generating broken kernels.  You can’t wish problems away but address them before they get into trucks and onto trains.  The objective is to protect quality and your reputation as being able to meet contract specs, as well as your bottom line.  Don’t make your problems your buyers’ problem.  Soybeans have quality issues but they don’t seem to be as widespread – yet - as in corn.  A lot of soybeans were dried with uneven moisture, oil yield is low, and problems may increase.

 

 

calendar of events

August 4, 2017

NeGFA Summer Meeting & Golf Outing

York Country Club

York, NE

 

 

 

 

contact us

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