"Value-added."
We read and hear that phrase so many times that it's become part of our daily vernacular.
However, the problem with this phrase is that it is often difficult to define "value" to the end user. In simple terms, however, once money finds its way back into our pockets, only then can a product or service truly considered as having added value.
Is the expectation any different in the feed and grain industry vs. the consumer retail arena? Absolutely not.
Some would contend the stakes are even higher as significant higher production costs, larger capital costs, marketplace volatility and weather make managing for quality grain more of an art form than an exact science.
Toss in a global economic recession into the mix and now the decision-making process becomes more difficult and the question then becomes a down-to-brass-tacks discussion of how much quality can I afford.
Who Drives Quality?
So what prompts mill managers, elevator operators and grain and biofuel processors to spend money on equipment and practices intended to enhance quality? It's the consumer who drives quality.
"Changes in what consumers expect from their food products are prime drivers behind the innovation necessary that allows grain products to meet those expectations both today and in the future," says Rob Ihrig, product management lead, Oilseed Crops, Monsanto. "These innovations also elevate the level of quality available to the processor and end user."
Ihrig has plenty of experience in bringing value to the marketplace, as his job responsibilities which, in their simplest form, include bringing products to the marketplace that growers want to grow and processors want to process. Now that's all fine and good but unless these products deliver downstream value (there's that "V" word again!) along the user chain, they won't ever see the light of day.
For example, Ihrig recounts how the genesis for Monsanto's Vistive™ soybeans was sparked by increasing pressure from consumer and health groups on food companies to address issues with transfats in foods. However, the solution wasn't easy, as consumers demanded to literally have their cake and eat it, too.
"Addressing the need for creating a product that would satisfy the needed positive impact on the hydrogenation process while at the same time delivering the same baking and flavor characteristics demanded by those same customers creates quite a challenge," Ihrig says. "However, with an end-goal target in our sights, we could better target our research and development process in looking at viable solutions to the consumer's dilemma, while still creating a compelling value proposition for growers and processors alike."
As companies like Monsanto have worked to enhance end-use characteristics in grains through either conventional breeding or biotech processes, the quality potential of grain has improved as well, in some cases quite dramatically.
Addition By Subtraction
At the producer level, grain quality has seen a steady increase thanks to numerous advances undertaken by private and public research aimed at creating a better growing environment for grain.
According to Dr. David Wright of the Iowa Soybean Association who also serves as executive director of the Plant Health Initiative on behalf of the North Central Soybean Research Program (NCSRP), enhancements in grain quality are a direct correlation to reducing plant stressors.
"Really it's a simple addition by subtraction concept," says Wright. "By eliminating a variety of plant stresses, the seed is able to germinate under ideal conditions and the plant then can better achieve its optimum genetic potential.
"Primary stressors such as insect and weed pressures manifest itself early in the plants' life cycle," notes Wright. "Add disease stress and later flushes of insects and suddenly, the crop finds itself dealing with a lot. And that's even before you add stresses such as drought, excess moisture — like what was seen last year — or other environmental conditions."
Wright, however, is quick to remind us that while enhanced grain quality and trait packages that offer end-user benefits are certainly important to the feed and grain industry, these products must still meet the needs of the producer who plants, nurtures, harvests and takes these products to market.
"For producers, the incentive to work with these new value-added trait packages remains tied to two factors," he emphasizes. "These products must have a market and they must yield well."
That's no small consideration either; since the seed used to produce these stacked-trait grains come with tech fees attached, up-front costs are higher than conventional hybrids or varieties. Wright suggests producers are working more closely with consultants, agronomists, seed company reps and elevator managers to help them make the decisions on what to plant and how, and with whom, to market these specialty grains.
"Growers are looking to bring a higher quality product — be it commodity grade or specialty grains — to the marketplace. Furthermore, faced with the task to nearly double that supply in the next 25 years, technology-driven trait packages are the primary tool available to deliver both yield and end-user quality," Wright says.
Blueprint To Bin
Underscoring the need to develop grain products to meet the tastes of a global feed and food market is the need to deliver the next generation of grain products through the development, regulatory and commercialization processes.
"From concept to commercialization, the process can take anywhere from 10 to 12 years," says Andrew Duff, former Corn Trait marketing manager, Monsanto. "There are many checkpoints along that timeline which require review with many different stakeholders along the way including grower, end user, processor, channeling and regulatory groups.
"If early in that timeline the prospects look dim for a successful product launch, we won't go to market," Duff says. "To recoup the vast investment it takes to bring a product to commercialization, we must be pretty confident our idea is sound, has value, is attainable and is desired in the marketplace."
Duff helped lead the team that is bringing Genuity VT Triple PRO to the market. A full launch is slated for the 2010 growing season with a limited release available this spring for Southern corn-growing regions that anticipated higher than normal corn earworm and fall armyworm pressures.
Genuity VT Triple PRO hybrids employ multiple Bt proteins for broader spectrum control of these target pests, and Duff feels this trait package is the prototype for a value-added product that delivers both enhanced grain quality and end-user benefits.
"These pests can cause tremendous crop damage which obviously impacts the producer's yield, and the damaged plant tissue serves as an entry point for disease and a host location for pests," Duff explains. "Now you have a situation where insects and damaged kernels compromise grain quality, necessitating additional handling and cleaning at the mill.
"As damage is more pronounced, the chance for increased aflatoxin development rises dramatically and now you have a real problem," Duff adds. "So you see, the more value we can build into a trait package — including anticipating marketplace needs — the more likely it is to pass all the checkpoints along the timeline and, ultimately, be commercialized."
Outlook for 2009
When looking at how the 2009 growing season is shaping up from a grain quality perspective, from the outset it appears that some areas could be seeing a repeat performance of 2008. Cool, wet weather has caused delays in areas of the Corn Belt, with less than 25% of the corn crop in Illinois and Indiana reported as planted by mid-May — compared to a more normal acres planted rate of 85% for the region.
Conversely, the western Corn Belt (Dakotas, Nebraska, western Iowa and Minnesota) is lacking the moisture needed to nurture young stands. If patterns persist, expect a late, wet crop at harvesttime.
Dr. Wright thinks soybean producers could be in for some challenging conditions, thanks to changing weather patterns and their potential to drive insect pressures higher.
"It seems our growing seasons aren't ‘normal' anymore, with periods of drought and heavy rains evident in the same growing season," Wright notes. "Aphids and soybean cyst nematodes could see major population shifts and each field can demonstrate different pressures. Crop scouting will be as important this year as ever, especially where aphids are concerned. Keeping ahead of the pests will have a direct bearing on grain quality."
Cleaning and Conditioning
The opinions on strategies for grain cleaning are as varied and different as the grains themselves. However, one thing everyone agrees on is this: Elevator and mill managers alike must know exactly what to expect from a cleaning system as it relates to their unique operation.
"An elevator may choose to rough clean for in-house equipment protection, reduction of light grain dust and insect pressure for a better stored product for later resale," says Allan Tedrow, grain industry leader, Bratney Companies, Des Moines, IA. "On the other hand, if an elevator has an opportunity to sell a premium product, they may decide a premium cleaning system is needed for meeting exacting end-user standards for food customers or export markets.
"That's why it's so critical to fully understand the needs of both the elevator and the end-user customers," Tedrow says. "The chief value cleaning typically brings is opening up a new customer base. While the client may not want to pay a large premium for a product, providing them a consistent product at large volumes helps demonstrate the ROI rather dramatically."
And considering how much investment has gone into raising, feeding and harvesting the grain, it seems pointless to not give the same amount of attention to properly cleaning the crop as it enters the facility. Surprisingly though, there are some common errors that industry suppliers see customers make that compromise grain quality, end-user utility and, ultimately, the bottom line.
"Things we sometimes see that can cost facilities money is under-buying for your facility," says Rick Gergatz, vice president, product development and technical sales, ArrowCorp., Winnipeg, Manitoba. "Let's say you install a system and within a couple years you need to add more capacity. Now, you have a relatively new system that doesn't serve your needs. Facility managers need to be realistic and cost-conscious for certain, but by the same token you need to have a system that will grow as your operation grows.
"Along those lines, if your facility handles multiple crops like corn, cereals or sunflowers, all these crops deliver unique challenges to a cleaning system," Gergatz adds. "Not having the right components in place to do the job properly can result in lost revenue and opportunity from not meeting the customers' requirements."
Tedrow adds that, in some cases, the challenge can be as simple as explaining how a cleaning system can deliver a positive ROI to the facility.
"No doubt, a cleaning system can be a significant investment, but thoroughly explaining how the system pays the facility back over the life of the financing terms, can often bring the system's value in much clearer focus," Tedrow adds.
Cleaning and sifting systems can deliver direct bottom-line value including making storage and aeration systems more efficient.
"A facility that unloads 500 semi loads of grain a day may have up to 1% or more of that volume as foreign material," says Matt Podany, general manager for EBM Manufacturing, Inc., Norfolk, NE. "That translates into storing five semi loads of fines and other foreign material every day. That material eats up space and energy to dry and condition it, which results in losses of real dollars for the facility.
"So why would anyone want to store product that doesn't deliver value?" he adds. "A cleaning and screening system can remove foreign materials which can be either sold later or used in other value-added applications."
Podany says helping customers maintain quality and consistency through to the finished product is what helps drive profits.
"When a feed customer opens a bag they expect to see uniform, relatively consistent pellets, not a bunch of dust or crumbs," Podany points out. "Our system has helped users maintain consistency which satisfies both the customer and the animals alike."
Consistency is important and maintaining consistency at volume is critical to profitability. With facilities cleaning at volumes ranging from 100 to 5,000 bushels/hour, equipment that performs at those speeds pays for itself in a fairly short period of time. Now that the grain is cleaned, managers need to ensure its quality doesn't diminish when stored.
Know What You're Dealing With
For keeping grain in good condition during storage, the rule of thumb is keeping it cool uniformly in the bin — ideally somewhere between 35 and 50 F. However, one expert cautions operators that ever-changing variables will impact the processes needed to obtain those optimal temperatures.
"Each crop is as different as the growing season it took to grow it," says Bill Sturtz, manager, Aeration Division, Rolfes@Boone, Boone, IA. "A late, wet season like last year requires much different aeration strategies than a drier year. And as storage tanks keep increasing in size and capacities, you need to constantly fine-tune your systems for the best results. To maintain an ideal temperature between 35 and 50 F in a 105-foot-diameter steel bin takes some management."
As outside temperatures warm, head space temps also rise quickly, thus increasing the prospects of insect and mold damage.
Sturtz says one tip for proper cooling in the newer, larger bins is to install roof exhausters to disperse 135% to 150% more air out the roof than the amount produced at grade. (e.g., 100,000 cfm at grade/135,000 cfm or more pulled from under roof). Wiring these units independently and separately allows them to be operated for extended periods of time. It is suggested to install several units diagonally from each other and rotated to be operated to dissipate heat, wear, and to better manage over space temperatures.
"Designing different configurations often works wonders but it still requires that the customer know their exact needs before installation," says Sturtz. "Tell us the commodity stored, moisture content upon arrival, and we can suggest the air delivery for best results.
"If we are retrofitting an older system to handle higher moisture levels to alleviate pressure on the dryer, one concern is if there's adequate power available to handle the increased horsepower," Sturtz adds. "These are all important questions that need answers before we design a system."
You Get What You Pay For
All the manufacturers interviewed agreed on one major point: "You get what you pay for." Skimping on cleaning or aeration equipment simply because of the cost will, indeed, cost you money down the road.
The key is knowing what your customer wants, understanding whether or not you have the current system to meet those needs and having the foresight to purchase the equipment that will do the job today and in the future.
Mycotoxin Testing
Conditioning and cleaning goes a long way in maintaining grain quality, but testing is required to verify that it meets certain quantifiable standards. Whether the commodity ends up being exported overseas, or shipped to domestic customers, it must be tested for aflatoxin, a harmful mycotoxin regulated by the USDA Grain Inspectors, Packers and Stockyards Administration.
Mycotoxins are naturally occurring chemicals produced by a variety of molds. Conditions like moisture, humidity and heat are all conducive to mold formation, and anytime mold is present there is a possibility that mycotoxins could form, greatly reducing the quality of the grain.
GIPSA's acceptable limit for aflatoxin is 20 parts/billion. Quantifying the aflatoxin level in parts per billion requires the right equipment, proper sampling and sub-sampling, and careful testing.
"The presence of mold doesn't automatically mean mycotoxins are present," says Paul Pfeiffer, territory manager, milling and grain for Neogen. "You can't just look at or smell a grain sample and get a proper diagnostic. A screen or test is needed to accurately determine mycotoxin levels. It's important because the more you know about the grain, the better you can evaluate its quality."
Grain handlers who have the available space can segregate grain according to quality, giving their customers exactly what they need.
"Segregating your grain helps meet a customer's quality expectations," says Pfeiffer. "By segregating the 10 parts/billion, 20 parts/billion and 50 parts/billion, you can provide different qualities for different customers."
Without accurate test results grain segregation is impossible. The process starts with a representative sample of the load that needs testing. According to Michael Prinster, chief operating officer of Romer Labs, using the right equipment is essential to obtaining a good sample. "Pneumatic probes are the ideal tool for sampling because you can control the probe in multiple locations in the trailer," says Prinster. "It's in your best interest to know what kind of quality you're bringing into your facility, so upgrading to more sophisticated probes is well worth the cost."
After taking multiple probe samples totaling approximately five pounds, they must be ground together to form a composite, which is then sub-sampled for testing.
Once the proper sample is taken and the aflatoxin test is conducted, the elevator can determine whether it will accept or reject the grain. Their next responsibility is keeping it free of mycotoxins during storage.
Storage Considerations
While mycotoxins can never be completely eliminated, storing grain properly will help maintain grain quality and manage mycotoxin levels. Drying the grain before emptying it into a bin is the first step toward keeping mycotoxins from becoming a problem. According to Pfeiffer, mycotoxin growth halts once the grain's moisture content reaches less than 14%.
Permanent storage bins or silos are the ideal environment for keeping grain free of mycotoxins. "Temporary storage situations can increase the potential for aflatoxin formation because it exposes the grain to moisture, heat and wind," says Prinster. "I recommend storing in a closed, permanent bin to try to maintain the appropriate moisture level."
If the grain had a high level of infection to begin with, Pfeiffer says not to store it for an extended period of time because the quality may worsen over time if the mycotoxin spreads. Throughout the course of the storage period, Pfeiffer recommends mycotoxin infected grain should be tested on a monthly basis to gauge the quality until it's sold.
However, if the initial test results showed little or no aflatoxin, there is no need to test frequently. As long as the grain is stored properly, kept at the appropriate temperature, and maintains a moisture content of 14% or less, it is not likely that aflatoxin, or any other mycotoxin, would form.
Preventive Pest Management
Taking mycotoxin prevention methods can potentially kill two birds with one stone. Many of the steps taken to prevent the formation of aflatoxin also help prevent pest infestation. Grain pests, such as grain borers, moths and weevils, can potentially ruin the quality of an entire silo of grain. Being proactive and detecting pests early are both key to avoiding a widespread pest infestation.
According to Frank Arthur, research entomologist with the USDA-Agriculture Research Service, there are two types of pests: primary and secondary. Primary pests feed directly on the interior of the kernel and completely develop, from egg to larva, inside the kernel. Examples include the lesser grain borer, the rice weevil and the Angoumois grain moth. Secondary pests live their entire life cycle on the exterior of the kernel.
The rusty grain beetle, sawtoothed beetle and red flour beetle are all secondary grain pests.
Both primary and secondary pests can be controlled by taking an integrated pest management (IPM) approach. The keyword in IPM is integrated. This means the program utilizes a variety of pest-control measures, rather than relying on one method (primarily fumigation) to handle a pest infestation.
Doug VanGundy, director of specialty product development for Central Life Sciences, explains the main components of an IPM program. "It's a programmed approach to pest control including sanitation, exclusion, pest monitoring and chemical treatment. An integrated approach keeps the pests out and the grain quality high, and can reduce the need for costly fumigations."
Bin sanitation should be an integral part of any IPM program. The broken grain and dust that come off the grain create a food source for the pests. If the bin is not free of fines and grain dust after emptying, the insects will enter and continue their lifecycle.
Pest management experts recommend completely cleaning the bin and all equipment inside the bin, such as belts and elevator legs, before filling it again.
After thoroughly cleaning the bins, the grain is safe to enter the bin. At this point, an IPM program may include the application of a protectant insecticide applied as the grain is loaded into storage, such as Central Life Sciences' Diacon II.
"Application of a protectant will provide a measure of residual control," says Arthur. "They are also easy to use. You simply hook up a sprayer to the grain truck, calibrate your flow rate and spray the grain with the treatment as it goes into the bin."
Choosing to use a grain protectant can potentially save money in the long run, according to Arthur. "Using a protectant is a valid method if you know you don't want to fumigate or if it would be cost-prohibitive for the company." If fumigation is not an economical option, then the grain protectant, in combination with aeration and cool temperatures, is a viable option."
The risk of pest infestation increases with higher levels of moisture, so it is crucial to dry the grain before storage. After it's been dried to the appropriate level, proper aeration helps keep it at the right moisture level and temperature.
"Aeration uses low-volume ambient air to modify the internal temperature of the grain so it's less conducive to insect development," Arthur explains. "As you lower the temperature and the moisture content, there's less of a chance for infestation. Once the temperature reaches below 60 F, most stored product insects cannot complete their life cycle."
VanGundy also suggests managing vegetation as part of a good IPM program. The absence of vegetation around the outside of the bin decreases the likelihood of an infestation. "Laying down a piece of plastic and then pouring a 20-foot-wide gravel bed around the bin should help keep vegetation to a minimum," says VanGundy.
Fumigation Options
Taking preventive measures, such as applying a grain protectant, aerating the bin and managing vegetation are all parts of an effective IPM. However, even after taking such precautions, fumigation is sometimes necessary to preserve the integrity of the grain. If a bin is highly infested, particularly with primary grain pests which live inside the grain, the only thing that can be done is fumigation.
The Montreal Protocol, an international treaty designed to protect the ozone layer by phasing out substances that are responsible for ozone depletion, has reduced the use of methyl bromide. Although this fumigant was not extensively used on bulk grain in the United States, it still represents the loss of a potential treatment. Phosphine is the fumigant of choice for the grain industry, and comes in numerous solid formulations of aluminum phosphide and magnesium phosphide, and cylinderized as a gas. They don't deplete the ozone layer, but still are very toxic to humans, according to VanGundy.
There is a new fumigant option, however, which does not deplete the ozone. ProFume®, from Dow AgroSciences (active ingredient sulfuryl fluoride) is a fumigant currently used in grain bins, flour mills and food processing facilities to control post-harvest pests. Most importantly, its production is not regulated or prohibited by the Montreal Protocol.
Advantages to using sulfuryl fluoride over metal phosphides for fumigation include shorter exposure times to meet shipping needs; it can be used to manage phosphine-resistant insects and, when used properly, it will not damage sensitive electronics such as bin monitors and, there are no particulate residues that warrant deactivation and disposal after fumigation.
Quality In Transit
The main objective of preserving grain quality is ultimately to ensure customer satisfaction. Maintaining grain quality post-harvest requires the handler to employ a host of best practices, including keeping it free of mold and pests during storage. But there's still one step before the grain makes it to the customer. Whether going overseas, or simply across state lines, grain quality must be maintained while in transit.
Paul Hammes, vice president and general manager for agricultural products of Union Pacific, says his company does everything it can to ensure that quality is maintained while traveling UP rail routes, but the responsibility also rests on the shipper.
"Our role is to ensure that the railcars we supply are in proper condition and the gates and hatches are in good repair," says Hammes. "There is a shared responsibility because the customer loads it with whatever quality grain they've got, but we supply the equipment, and we have guidelines on how cars should be sealed if they want to maintain some integrity in quality."
Once a railcar is loaded, it must be sealed with an 8-inch cable seal, according to Hammes. Properly sealing the railcar is an added guarantee that the quality will be preserved.
"We have very few quality claims on grain because of the effectiveness of the seal, and also the grain is in transit for a short period of time," says Hammes. "If a gate was leaking, you may have quantity loss, but quality loss is very rare."
Union Pacific's system upgrades in recent years have enabled the company to shorten the shipping time, thus reducing the likelihood that quality would deteriorate. "From a systems standpoint we've been able to increase our velocity and it has helped our individual commodity groups move in four to five days in what used to take five to 10 days four short years ago," says Hammes.
On-time delivery of railcars also helps preserve grain quality by not holding up other processes further down the road. Union Pacific achieves this by keeping the track in good condition, adding capacity, making sure its locomotive fleet is in good repair, and providing qualified operators to run the trains.
Importers' Expectations
Grain exporters do everything they can to preserve quality from harvest all the way through exportation because they must live up to high expectations. USDA-GIPSA is America's quality assurance team, and the organization ensures that deliveries on quality promises are met.
Robert Lijewski, assistant director, Policies and Procedures Branch of USDA-GIPSA says, "U.S. commodities are among the safest, most reliable in the world."
"The United States is recognized as a reliable supplier of high-quality grain from year to year," says Lijewski. "In recent years, overseas importers have reported quality discrepancies on only 0.1% or 0.2%, by weight, of grain certified by FGIS."
Part of the reason importers rely on the United States is because we deliver the exact quality grain specified by the customer.
"Importers have come to expect uniformity of quality within shipments, and consistency between shipments," says Lijewski. "When an importer buys U.S. No. 2 quality, for example, they know that's what they will receive."
GIPSA's inspection process is responsible for the United States' solid reputation. At export facilities where GIPSA personnel perform online inspection and weighing services, GIPSA supervisors perform daily routine inspections of the grain elevator to monitor the grain flow, check for grain spillage and perform a safety inspection of the facility. GIPSA also performs sanitation inspections at facilities packing government purchased commodities such as flour, rice and beans, which involve a thorough inspection of the entire processing plant and the immediate area surrounding the plant. GIPSA then shares sanitation inspection results with the Food & Drug Administration.
GIPSA also gets help from private and state agencies to help share the enormous responsibility of testing and weighing exports.
"Currently there are 43 private and seven state agencies that are designated by GIPSA to provide official services under the United States Grain Standards Act [USGSA]," says Lijewski. "These agencies operate at inland markets and typically provide inspection and weighing services for railcars, truck lots, barges and export containers."
Additionally, there are five states that are delegated by GIPSA to provide official services at export port locations. The delegated states have the added responsibility for providing inspection and weighing of cargoes loaded aboard ships and ocean-going barges.
In certain instances GIPSA relies on other non-GIPSA testing laboratories, such as state government laboratories, USDA's Agricultural Marketing Service Laboratory and commercial laboratories that are accredited by the International Organization for Standardization (ISO), to provide official testing results on processed grain products. GIPSA recognizes these results as "official" and reports them on GIPSA certificates.
