“And to think just four months ago I was worried whether I should raise my bids to avoid losing volume. Of all the things I didn’t need to worry about, that should have been No. 1 on my list. Oh well — there wasn’t any way to know Harvest 2009 would be one for the history books.”
Dave lays his glasses on his desk and closes his eyes briefly — it’s been another 16-hour day and he feels every one of his 60 years. He has a small but good staff and they’re as exhausted as he is. The guys haven’t had two straight days off since early October, they’re still drying corn until midnight every day, and there’s a blizzard heading their way. Dave’s son Gary has been a big help but this is only Gary’s second harvest.
“Can’t stop now — I’ve got to go out and help the guys shut down the dryer. Wish we were bigger and I could afford an experienced superintendent...” Dave thinks to himself as he rises slowly, pulls on his heavy coat, and walks out the back door, his breath freezing in front of him in the cold. He knows this is the most dangerous time — when harvest is almost over, it’s late at night and everyone’s tired all the time. The guys go through a checklist to shut things down properly, but he wants to be there to spot any problems and make sure everybody is safe. With the equipment shut down, Dave finally is able to head home for another too short night.
December 2009
The next morning Dave stops in town to pick up doughnuts for all the staff, eating one or two himself on the way to the elevator. He decided overnight that he has to spend time today evaluating what projects to tackle next, then chatted this morning with his friend Mike who manages the nearby co-op. “Not much point both of us attending last week’s National Grain and Feed Association conference and then not follow up on what we learned,” he told Mike. “You know it’s funny; last year our big issues were money and merchandising. This year looks like it’ll be about quality. I’ll let Gary work with the guys outside today — old Dad’s got to work on a few things,” he chuckles — “ . . . besides, that way Gary’ll get the credit for bringing the doughnuts.”
Dave retreats to his office and starts by thinking about what he heard from managers around the country at the NGFA meeting. 2009 has been a year of extremes. Planting was late, some areas had excess summer rains while other areas were too dry. Then in much of September, the weather turned cold and wet and stayed that way. The result was big crops, but of fair to often poor quality across many states — crops that pose special demands.
The Midsouth & Delta struggled through weeks of September rains that left managers dealing with high-moisture, damaged soybeans that had to be dried and were still hit with high discounts at the river.
Then the rains came, and late-maturing corn faced freezing temperatures in early October across the Corn Belt, stalling crop maturation. The irony is that corn and soybean yields are great, but quality is not. Corn test weight has been a widespread problem, often running 50 to 54 pounds instead of 54 to 58. Even in the best areas much of the corn stopped drying naturally, with a lot of corn harvested over 25%, some over 30%.
Many elevators have barely turned their dryers on in recent years and this season taxed both men and machines. Dave tries to recall when he last dried soybeans, and finally decided it was probably 20 years ago. “Little wonder dryers have been catching fire,” he mutters.
Corn moisture varied widely coming out of the fields, which made for uneven moistures going into the dryers. Dave recalls the comment from one speaker that “uneven moisture going into the dryer means it is still uneven moisture coming out — just at lower levels, and that can cause problems in bins in the months ahead.”
Dave makes a note to review their procedures and schedule for bin-monitoring. “What’s worked most years isn’t going to be good enough for this mess, that’s for sure,” he thinks to himself. “And that reminds me, where are last week’s notes.” He flips through his notes and finds the section. “That operations speaker and Dr. Dirk Maier from KSU both said checking carbon dioxide levels as well as bin temperatures is important. I didn’t realize that moldy grain and hot spots will generate higher CO2 readings. That hand-held meter will be a cheap investment this year; I’ll have Gary check that out on the internet. And while he’s at it I’ll have him order new respirators; working around mold spores can cause serious health problems.”
Dave continues to write; “This corn is breaking up as we handle it so we need to minimize transferring it, but we also have to core the bins right away. The rule of thumb is that may mean pulling out 8% - 9% of the corn to remove the core of FM. I have to get the guys on that also.” Then he notes that a lot of corn came off the dryer higher than 15.5% moisture. Higher moisture corn won’t keep as long, nor as well.
Next on his list is to review the elevator’s shrink accounting. “There are gross bushels and then there are ‘real’ bushels, and we better be sure we’re shrinking enough,” Dave thinks. “We have to allow for the usual mechanical shrink; that could be up to ½% of inbound plus outbound bushels, maybe more this year as the corn’s fragile. I think our dryer shrink was sufficient, but I need to allow for higher aeration shrink this year. Mike says their co-op adjusts their book inventory monthly for mechanical shrink. I haven’t been that diligent but now’s the time to change.
“I don’t think we have any mycotoxins problems, but we didn’t run many samples. Guess I just figured we’re OK, but most of our corn goes to the ethanol plant and we want to be sure we meet their standards. We’ll start a vomitoxin testing program in corn.”
Merchandising challenges
This will be a tough year for merchandising as well as for managing grain quality. Elevators are full in December and still receiving new-crop corn. The last 20 percent or so of corn has overrun elevators, but country managers are reluctant to put much if any corn on the ground — given all the quality issues. This pushed a tsunami of corn in December into markets that are open and able to receive. Now elevators all over are ready to sell any basis strength so they can start moving corn. And farmers want to pull corn out of their bins as well. “Probably means corn basis won’t heat up much unless weather messes folks up — can’t count on that though,” Dave says to himself. “I better sell more corn before January basis drops off. And I know I’ll be holding corn until spring; I’ll move those short hedges out to May or July futures, however, to cover my costs. Might even forward sell some of the basis carry into spring just to eliminate some risk.”
Soybean basis at the Gulf has been record high most of the time since August on the huge export program, and Dave doesn’t own a lot of soybeans. His local market was reasonably strong and he kept selling soybean basis through harvest and using the bins for corn. That’s left him well-positioned now to be selective on selling the soybeans he does own. “Not much to do but just wait. Exports are going strong and farm selling has all but stopped; basis will heat up.”
Dave goes out and pours himself a fresh cup of coffee and takes one last doughnut. “Now it’s time to get specific – I need a ‘To Do’ list.”
- Start coring the bins as soon as possible.
- Review with Gary and the guys to grade every outbound load and log it before the truck leaves.
- Get one of those CO2 monitors we heard about at NGFA’s conference in Kansas City.
- Order more mycotoxin test kits and start a testing regimen. Train the staff on proper test procedures.
- Have Denise prepare a flyer offering to help farmers test corn samples from their bins.
- Review with the guys when to run fans on the bins. Note: In springtime, seal the fans and keep the grain cold.
- Set up the schedule and procedures to monitor bins weekly. Check CO2 and temperatures, and ventilate the headspace to reduce moisture and lessen mold risk.
- Schedule a safety meeting. Review bin lock-outs, entry permits, use of harnesses and respirators.
- Order the new NGFA safety video coming out in January 2010.
- Review the DPR with Denise and Gary and explain we will take extra shrink monthly, and how to show it on the books.
- Give all the staff a special bonus — they’ve earned it!
Dave is the sole owner and general manager of an imaginary Midwest elevator.
