Enhancing the Quality of U.S. Grain for

International Trade

February 1989

NTIS order #PB89-187199
Recommended Citation:

U.S. Congress, Office of Technology Assessment, Enhancing the Quality of U.S. Grain

for International Trade, OTA-F-399 (Washington, DC: U.S. Government Printing

Office, February 1989).

Library of Congress Catalog Card Number 88-600592

For sale by the Superintendent of Documents

U.S. Government Printing Office, Washington, DC 20402-9325

(order form can be found in the back of this report)
American agriculture, long the sector of the economy considered the most

productive and competitive in the world, began to show signs of declining international competitiveness in the early 1980s. Many reasons have been given for this,

including the problems of the quality of U.S. grain. The quality issue is receiving

renewed attention in the current world buyers’ market for grain, Some are concerned that as the influence of important economic variables such as the strength

of the dollar and the extent of agricultural price support cause U.S. exports to become more price-competitive, opportunities to increase exports may be hampered

by buyers’ qualms about U.S. grain quality.

Complaints of overseas buyers about low-quality U.S. grain receive widespread

attention. Buyers protest that they receive dirty, molded, or infested grain, or that

characteristics contracted for, such as a certain protein level, were not met. Exporters argue that foreign buyers are using quality complaints to bargain for lower

prices. Farmers and many Members of Congress point to loss of market share to

prove the importance of quality. The problems—real or perceived—have persisted

for many years, and neither industry response nor congressional actions to date

provide a satisfactory answer or reassure U.S. customers.

During debate on the Food Security Act of 1985, the issue of the quality of U.S.

grain was again raised, It became apparent that insufficient information was available to make wise decisions. Congress then amended the act and directed the Office of Technology Assessment to conduct a comprehensive study of the technologies, institutions, and policies that affect U.S. grain quality and to prepare a

comparative analysis of the grain quality systems of major export competitors of

the United States. The study was also requested by the House Committee on Agriculture and the Joint Economic Committee.

This report is one of two in that assessment, It focuses on the U.S. grain system

and possible changes within that system to enhance grain quality. A second report,

Grain Quality in International Trade: A Comparison of Major U.S. Competitors,

provides OTA’s analysis of the grain quality systems of other major exporters.

OTA greatly appreciates the contribution of the advisory panel, authors of technical background papers, the many industry associations, and other advisors and

reviewers who assisted OTA from the public and private sector. Their guidance

and comments helped develop a comprehensive study. As with all OTA studies,

however, the content of this report is the sole responsibility of OTA.

. . . ///
Advisory Panel

Enhancing the Quality of U.S. Grain for International

Donald E. Anderson

General Partner

The Andersons

Maumee, OH

Roger Asendorf

American Soybean Association

St. James, MN

G. (Jerry) W. Becker

Vice President and General Manager

Caldwell Manufacturing Co.

Kearney, NE

James B. Buchanan

Vice President and Manager of

Grain & Feed

Illinois Cereal Mills, Inc.

Paris, IL

William J. Cotter

Director of Operations

Port of Corpus Christi Authority

Corpus Christi, TX

James F. Frahm

Director of Planning

U.S. Wheat Associates

Washington, DC

Maurice A. Gordon

U.S. Feed Grains Council

Rantoul, IL

William W. Hay

Millers National Federation

Minneapolis, MN

Jerry P. Krueger

National Association of Wheat Growers

Warren, MN

Roald H. Lund

Dean, College of Agriculture

North Dakota State University

Fargo, ND

Richard L. McConnell

Director of Corn Research

Pioneer I-Ii-Bred International,

Johnston, IA

Paul B. Mulhollem

Group President

World Oilseeds Group

Continental Grain Co.

New York, NY

Seiichi Nagao

General Manager

Trade

Inc.

Cereal and Food Research Laboratory

Nisshin Flour Milling Co., Ltd.

Tokyo, Japan

Grayce “Susie” Pepper

purchasing and Office Manager

Zip Feed Mills, Inc.

Sioux Falls, SD

Harold E. Reese

Vice President and Assistant

Division Manager

Bunge Corp.

Destrehan, LA

Thomas C. Roberts

Executive Vice President

Wheat Quality Council

Manhattan, KS

Ronald E. Swanson

National Corn Growers Association

Gait, IA

D. Leslie Tindal

Commissioner

South Carolina

Columbia, SC

Department of Agriculture

NOTE: OTA appreciates and is grateful for the valuable assistance and thoughtful critiques provided by the advisory

.panel members. The panel does not, however, necessarily approve, disapprove, or endorse this report. OTA

assumes full responsibility for the report and the accuracy of its contents.

iv
OTA Project Staff

Enhancing the Quality of U.S. Grain for International Trade

Roger C. Herdman, Assistant Director, OTA

Health and Life Sciences Division

Walter E. Parham, Food and Renewable Resources Program Manager

Michael J. Phillips, Project Director

David M. Orr, Senior Analyst

Lowell D. Hill, Contractor

William W. Wilson, Contractor

Julie A. King,’ Analyst

Linda Starke, Editor

Administrative and Support Staff

Sally Shafroth2 and Nathaniel Lewis,’ Administrative Assistants

Nellie Hammond, Secretary

Carolyn Swarm, Secretary

‘Through March 1987.

‘Through April 1987.

‘From May 1987.
Major Contractors

Enhancing the Quality of U.S. Grain for

Stephen P. Baenziger Hagen B. Gillenwater

University of Nebraska U.S. Department of Agriculture

Fred W. Bakker-Arkema

Michigan State University

C. Phillip Baumel

Iowa State University

Joe W. Burton

U.S. Department of Agriculture

Raleigh, NC

Roy G. Cantrell

North Dakota State University

Jack F. Carter

North Dakota State University

Harry H. Converse

U.S. Department of Agriculture

Manhattan, KS

Bert L. D’Appolonia

North Dakota State University

Robert Davis

U.S. Department of Agriculture

Savannah, GA

Joel W. Dick

North Dakota State University

Patrick L. Finney

U.S. Department of Agriculture

Wooster, OH

Richard C. Frohberg

North Dakota State University

Savannah, GA

Charles R. Hurburgh

Iowa State University

Howard L. Lafever

Ohio State University

Karl A. Lucken

North Dakota State University

Paul J. Mattern

University of Nebraska

Marvin R. Paulsen

University of Illinois

Tilden W. Perry

Purdue University

David B. Sauer

U.S. Department of Agriculture

Manhattan, KS

Mark D. Schrock

Kansas State University

Rollin G. Sears

Kansas State University

Thomas L. Sporleder

Texas A&M University

A. Forrest Troyer

DeKalb-Pfizer Genetics

Paul Gallagher

Kansas State University
Chapter 1.

Chapter 2.

Chapter 3.

Chapter 4.

Chapter 5.

Chapter 6.

Chapter 7.

Chapter 8.

Chapter 9.

Contents

Page

Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... , . . . . . . . . . . . . . . 3

An Overview of the U.S. Grain System . . . . . . . . . . . . . . . . . . . . . . 29

Basic Grain Processing Industries. . . . . . . . . . . . . . . . . . . . . . . . . . . 47

Quality Attributes Important to Domestic

and Overseas Industries . . . . . . . . . . . . . . . . . . . . . . . . . . , , . . . , , . . 61

The Changing Role of Quality in Grain Markets . . . . . . . . . . 89

The Genetics of Grain Quality . . . . . . . . . . . ................,,.103

Technologies Affecting Quality . . . . . . . . . . . . . . . . . . . . . . . . .. ...137

Analysis of U.S. Grain Standards . ...............,,...,..,,.18 9

Government Farm Policy and Economic Incentives

Affecting Quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..219

Chapter 10. Comparison of Technologies and Policies Affecting

Grain Quality in Major Grain-Exporting Countries . ..........237

Chapter 11. Policy Options for Enhancing Grain Quality . . . . . . . . . . . . . . . . .251

Appendix A

Appendix B

Appendix C

Appendix D

Index, . . . .

Glossary of Acronyms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .273

Glossary of Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......274

Commissioned Papers and Authors, . . . . ...................280

Acknowledgments ., . . . . . . . . . . . . . . . . . . . . . . ..............282

,... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ., 285

vii
Chapter 1
CONTENTS

Page

Major Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Fundamental Advantages of the U.S. Grain System. . . . . . . . . . . . . . . . . . . . 4

Competitors’ Policies ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Problem Areas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Quality in the Marketplace. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

policy options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Variety Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Market Intervention.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Grain Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Interaction Between Standards, Variety Control, and

Market Intervention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Figures

Figure Page

l-1. Moisture, Temperature, and Relative Humidity Interactions . . . . . . . . . . 8

I-Z. Importance of Uniformity Between Shipments . . . . . . . . . . . . . . . . . . . . . . 15

l-3. Components of the Interdependent Grain System . . . . . . . . . . . . . . . . . . . 17

Tables

Table Page

l-1. Comparison of Institutions and Policies Affecting Grain Quality

of Major Grain-Exporting Countries ..,...... . . . . . . . . . . . . . . . . . . . 6

l-2. Fundamental Policy Alternative s... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Chapter 1

Summary

More competitors exist in the international

grain market now than ever before, and grain

quality has become an extremely important

competitive factor. In a mere decade, growth

in grain suppliers has been phenomenal. In the

1970s, one-third of the world supplied grain to

two-thirds of the world’s people. Today, the reverse is true: two-thirds of the world supplies

grain to the other third. This competitive environment has made foreign buyers increasingly

sensitive about the quality of grain they receive.

During the debate on the Food Security Act

of 1985, many Members of Congress expressed

concern about the quality of U.S. grain exports,

Grain elevator operators and export traders

were accused of adultering loads of grain

shipped to foreign buyers; these allegations

were supported by a sharp increase in foreign

complaints about quality. Grain traders and

handlers maintained that they have been shipping grain according to specifications, and that

most complaints were motivated by buyers’

desires to obtain a higher grade of grain at a

lower price.

The debate often focused on the adequacy of

today’s grain standards, developed over 70

years ago. Critics argue that the standards themselves are to blame for customer complaints.

They claim that standards have not kept pace

with the changing world marketplace and are

frequently misunderstood by foreign buyers.

By focusing on standards, those debating

about U.S. grain quality are seeing only part

of the picture. Improving quality—or even the

perception of quality—will be much more complicated than tinkering with the criteria for

standards. Grain is vulnerable to quality deterioration at virtually every stage of production

and marketing. Before changes can be contemplated, full understanding is needed of the complex, interrelated system of:

developing varieties of grain,

producing grain,

harvesting grain,

storing grain,

handling grain, and

testing grain,

Understanding these relationships is the main

goal of this assessment.

First, it is important to clarify what is meant

by grain quality. Webster defines quality as an

essential character, a degree of excellence, or

a distinguishing attribute. In grain, such a definition has come to mean a variety of things—

being free of foreign material, not cracked or

spoiled, or having the proper characteristics

for a particular end use, No one definition of

quality as it relates to grain has been accepted.

For the purpose of this assessment, quality

is defined in terms of physical, sanitary, and

intrinsic characteristics.

●

●

●

Physical quality characteristics are associated with outward visible appearance of

the kernel or measurement of the kernel.

Included are kernel size, shape and color,

moisture, damage, and density.

Sanitary quality characteristics refer to the

cleanliness of the grain. They include the

presence of foreign material, dust, broken

grain, rodent excreta, insects, residues,

fungal infection, and nonmillable materials. These are essentially characteristics

that detract from overall grain value,

Intrinsic quality characteristics are critical to the end use of the grain. They are

nonvisual and can only be determined by

analytical tests. In wheat, for example,

such characteristics refer to protein, ash,

and gluten content. The characteristics depend on the grain and the end use within

a grade,
4

MAJOR

The U.S. grain marketing system has a number of important characteristics. Handling (including exporting) and transport industries are

highly competitive and there is relatively limited government intervention in the system.

One key principle throughout the U.S. system

is that of self-selection. producers plant varieties perceived to be in their best interest; users

(domestic and importers) specify and purchase

certain qualities that are in their interest, given

a range of alternatives and prices; handlers and

exporters condition and move grain in their

own interest. Each decision is based on the sovereignty of the individual decisionmaker, and

takes into account incentives and disincentives

reflected in market premiums and discounts

for quality characteristics,

Fundamental Advantages of the

U.S. Grain System

An important component of this study was

a comparison of the U.S. grain system with the

systems in other exporting countries. OTA collected information on production and distribution in Canada and sent study teams to Argentina, Brazil, France, and Australia to

document their systems. Five fundamental advantages of the U.S. marketing system are

apparent: efficiency, productivity growth, wide

range of qualities, the grading and inspection

system, and market-determined premiums and

discounts.

efficiency

The U.S. marketing system performs a number of complex functions—it assembles, handles, conditions, and allocates different qualities to domestic buyers in many locations and

for export from a multitude of ports. Indeed,

given the quantity produced, the many differences in qualities at different locations, and numerous locations of end-users and ports, the

U.S. marketing system is more complex and

performs more challenging functions than the

marketing system of any other exporter. Yet the

efficiency of the U.S. grain handling and transFINDINGS

port system exceeds that of nearly all other

countries, assuring lower marketing margins

and higher prices to producers.

Productivity Growth

Plant breeding in the United States is relatively unfettered, compared with other countries, in terms of regulations over variety development and release. Ultimate success of

varieties is determined by the market for seed

stocks. Producers make choices in response to

market incentives. Where comparisons are appropriate (i.e., in wheat), productivity growth

as measured by yield exceeds that of most other

exporters, with the exception of France. Productivity differences are affected by a multitude of factors including environment, soils,

other inputs, relative prices, institutions, and

policies. Thus, it is impossible to attribute yield

differences to the institutional environment

affecting varieties, but growth rates are influenced by variety release procedures.

A Wide Range of Qualities

No other country can offer such a wide range

of intrinsic differences in grains to customers.

This is obvious given the class differences in

wheat, which is facilitated by production regions of differing environments and soils. Also,

a wider range of physical and sanitary qualities exists in the United States than elsewhere.

This is an advantage in the sense that more

alternatives are available to buyers, some at

lower costs, but it may be viewed as an externality in the sense that reputation is affected.

The uniformity problem (discussed later) is a

direct result of the multitude of qualities available. In addition, given such an unfettered system, importers need a certain amount of expertise to benefit fully from the wide range of

qualities.

Grading and Inspection System

The U.S. grading and inspection system provides grade determination by an independent

agency (i. e., one not having financial stakes in
5

the transaction), Factors and limits in factors

in the grade standards are relatively stable

across crop years (i.e., the definition of No. 2

corn does not change from year to year). Similarly, the definition of No. 2 Hard Red Winter

wheat does not change, although intrinsic differences not measured in the standards may

change. This is not necessarily the case in other

countries. Major changes to the U.S. system

cannot be implemented in less than a year after they are promulgated. Some other exporters

adjust factor limits with each crop year.

Market-Determined Premiums

and Discounts

Premiums and discounts and/or regulations

in all countries are used to provide quality incentives to market participants. Those established in the United States are via the interaction of supply and demand for measurable quality

characteristics, i.e., the market for quality characteristics. Consequently, U.S. values perhaps

reflect true values better than do premiums and

discounts administered in several other exporting countries. A notable exception is France,

Efficient determination of price differentials

is important because they essentially allocate

grain across end-users and provide signals

throughout the production and marketing system. Through these differentials the system

responds to market needs.

Competitors’ Policies

The institutions, policies, and trading practices in the marketing system of the major grain

exporting countries differ considerably. The extent of market intervention varies from highly

regulated throughout (e. g., Australia and Canada), to partial, or no regulation. Differences

exist in procedures for seed variety development and release, the use of variety identification in the marketing system, and the use of

grain receival standards (table l-l). In addition,

a number of other countries address grain quality problems as part of an integrated agricultural policy. Major foreign wheat exporters

have more extensive controls at first point of

sale than U.S. exporters. Wheat from other

countries is probably preferred over comparably priced U.S. wheats due to these mechanisms.

The policy and institutional structure of the

U.S. grain system provides the framework for

various grain-handling practices. Technologies

for producing and handling grain are quite similar among competing countries. The main

difference is that the United States is slightly

more efficient in using these technologies. But

points in the marketing channel at which they

are used differ.

A case in point is cleaning. Outside the United

States, most exporters clean grain at the first

point of receipt. Canada and Australia are two

exceptions, although for different reasons. Canada, however, is studying the economic feasibility of cleaning grain in the country versus

at export and will probably change. Australian

farmers deliver grain that does not need to be

cleaned, unlike the situation in the United

States. Basically, no economic incentive exists

to clean grain at the first point of receipt in the

United States.

The other major handling practice in which

the United States differs from other exporters

is blending. Blending U.S. grain over wide

ranges of quality to create a uniform product

for sale is necessitated by the lack of any minimum receival standard. Blending exists outside

the United States but not to the same extent.

In other countries it is done over very narrow

ranges in quality. These exporters basically

have grain of uniform quality moving throughout the system. The U.S. system lacks uniformity in quality throughout the market channel.

At export, grain is blended in an attempt to produce a uniform quality that meets buyers’ specifications. The OTA survey of foreign and domestic buyers of U.S. grain clearly indicated

that lack of uniformity between shipments is

the buyers’ biggest complaint.

Problem Areas

Genetics and Variety Release

Genetically, yield and important intrinsic

quality characteristics are often inversely re-
Table 1-1.—Comparison of Institutions and Policies Affecting Grain Quality of Major Grain. Exporting Countries

Activity/Policv United States Argentina Brazil France Canada Australia , ,

Seed variety control. . . No State or Federal

control. Release of varieties influenced to

some extent by landgrant universities.

Largely the market determines adoption of

varieties.

Grain receival

standards . . . . . . . . . . . . None. All types of quality are accepted with

appropriate discounts

for low-quality grain.

Committee of government and industry must

approve agronomic

properties. Quality factors of minor influence.

Grain not meeting a

specified minimum

quality (Condition Camara) is rejected at first

point of sale.

Committee with broad Formal mechanism ex- Formal mechanism Formal mechanism folrepresentation directs ists that regulates re- used to license new lowed as a prerequisite

research and approves lease of varieties based varieties. Agronomic for release Of varieties.

varieties. Quality is on agronomic and qual- and quality criteria Quality and agronomic

potential criterion but ity criteria. given equal weight in criteria are used.

not currently effective. testing new varieties.

Soybeans not meeting Grain not meeting ex- Developed eight grades Wheat must meet minia minimum quality are port contract specifica- for CWRS to differenti- mum quality standards.

rejected at first point of tions can be rejected by ate quality. Lowest If not it is allocated to

sale. surveying company or grade goes to feed mar- feed market.

receiving elevator. ket.

Marketing by variety . No mechanism exists Variety is not identified Variety is not identified Very common. Variety Licensed grain must Very common-use varifor variety identifica- in marketing channel. in marketing channel. often specified in be visually distin- ety control scheme to

tion. wheat contracts. guishable. facilitate segregation

by classes.

Price . . . . . . . . . . . . . . . . . . Loan rate is principal Government establish- Government establish- Key policy is European Initial producer price is Guaranteed minimum

price policy. Includes es minimum prices for es a minimum price pri- Community interven - the principal price poli- price (GMP) is key price

premiums and d is- farmers and exporters. or to planting. it is tion price, which in- cy. Separate prices es- policy. It is established

counts for major grains Government also estab- adjusted during the eludes premiums and tablished for each by class and provides

but has not been Iishes premiums for crop year to account for discounts for quality grade of grain. Lower differentials for quality.

responsive to market high-quality grain. inflation and political factors. Lower qualities qualities of wheat Lower qualities of

conditions. pressure. of wheat equated to equated to feed values. wheat equated to feed

feed values. values.

Farm Storage . . . . . . . . . . Farm policy in past de- Government policy No incentive for farm- Farm policy through Producer deliveries are Use of GMP provides

cade has encouraged through pricing does ers to store on farm. the Common Agricul- regulated to primary no incentive for delivery

extensive on-farm not encourage on-farm tural Policy (CAP) has elevators via quotas. in post-harvest period,

storage and inter-year or inter-year storage. not encouraged de- On-farm storage is sub- leading to minimal use

storage. velopment of extensive stantial. of on-farm storage.

on-farm storage. Also

relatively limited interyear storage due to

CAP.

SOURCE Office of Technology Assessment, 1989

0)
7

lated in each of the major grains. In the case

of wheat, it is well recognized that yield and

protein quantity are inversely related. In corn,

the trade-off is between protein, starch, and

yield; in soybeans, it is between protein and

yield. Breeding programs generally aim to improve yield and disease resistance and to satisfy

apparently desirable intrinsic quality goals.

In the case of corn, most breeders have always sought to increase yield and improve harvestability, with intrinsic quality not being a

priority. The potential for improving quality

through genetics is quite high. However, many

quality factors are traits known to be influenced

by many genes, This makes enhancing quality

more difficult than altering a trait influenced

by a small number of genes, The task is further

complicated by the fact that genetic alteration

of one trait frequently leads to undesirable

changes in other plant traits.

New crop varieties require approximately 9

to 12 years for development and release. If there

were a change in plant breeding program objectives in 1989, such as development of new

varieties with enhanced quality factors, it could

be the end of the century before these new varieties were commercially available.

The emphasis on yield in many cases is due

to the fact that though intrinsic quality characteristics may be important, they are not measured in the market. Incentives to improve intrinsic quality characteristics therefore are not

transmitted through the market as readily as

those associated with agronomic characteristics, such as yield, disease resistance, and harvestability.

Individual breeders or their institutions can

exercise tremendous discretion regarding release of varieties. This is tempered, however,

by the market system, which determines the

success of any release. Market efficiency requires measurement of relevant intrinsic quality characteristics, which is absent in many

cases. For example, a variety with lower yield

but an improved intrinsic characteristic (e.g.,

bake test) not measurable in the marketing system would fail to survive in the seed market,

Variety release procedures as currently practiced are not applied uniformly across States

(or firms, in the case of private breeding) or over

time.

No effective national policy exists on variety

release that would assure uniformity in application of release criteria. In the case of wheat,

in which public breeding is more important,

the State Agricultural Experiment Stations

maintain variety release procedures. These are

in turn guided by the Experiment Station Committee on Organization and Policy. However,

since no legally binding procedures for controlling the release of varieties exist, individual

States can and do vary from this policy. Thus

the criteria for variety release may not be uniform across States or consistent over time, Ultimately a particular class of wheat, corn, or soybeans produced in different States may differ

in intrinsic quality.

Technologies Affecting Quality

Grain is a living organism and as such is a

perishable commodity with a finite shelf life.

Drying, storing, handling, and transporting

technologies cannot increase quality once the

grain is harvested. Each technology is a selfsustaining operation, but the way each is used

has an impact on the ability of the others to

maintain quality, For example, if grain is harvested wet, not only will this lead to increased

breakage during harvesting, but it means the

grain must be dried. Improper drying can lead

to more breakage and to nonuniform moisture

content. Moisture content, moisture uniformity, and the amount of broken grain and fine

material affects storability and can have an impact on the technologies used to maintain quality during storage. Therefore, decisions made

at harvest, as well as at each step thereafter,

affect the system’s ability to maintain and deliver a quality product.

Moisture.—Moisture at harvest directly affects the amount of kernel damage produced

through combining. Since cereal grains and oilseeds are harvested in the United States at moisture levels too high for long-term storage or even

short-term storage and transportation, these

commodities must be dried to acceptable mois-
8

ture levels. Corn, which is harvested at 20 to

30 percent moisture, must be dried to 14 to 15

percent for safe storage. Wheat and soybean

harvest moistures are substantially lower than

corn, with safe storage levels marginally lower

than harvest moisture. In certain regions of the

United States, wheat and in some cases corn

and soybeans dry naturally in the field.

The process of drying has a greater influence

on grain quality than all other grain handling

operations combined. If superior grain quality

is to be produced, it is imperative to optimize

the dryer type and its operation since half the

corn crop is dried in continuous-flow, portable batch, and batch-in-bin dryers. Of particular concern is the increase in breakage of corn

and soybeans and the decrease in milling quality of wheat from improper drying. Artificial

drying of wheat and soybeans, however, is not

frequently required.

The main dryer operating factors affecting

grain quality are air temperature, grain velocity, and airflow rate. A dryer operator is able

to adjust the first two on every dryer and, on

some units, can adjust all three. Collectively,

the three conditions determine the drying rate

and maximum temperature of the grain being

dried, and thus establish the quality of the dried

lot.

At least 80 percent of the U.S. corn crop is

dried on-farm. On-farm dryers fall into three

categories—bin, non-bin, and combination dryers. Bin dryers generally are low-capacity, lowtemperature systems, able to produce excellent

quality grain. Non-bin dryers, the most popular type in this country, are high-capacity, hightemperature systems that frequently overheat

and overdry the grain, and thereby cause serious grain-quality deterioration. Combination

drying reaps the advantages of both systems

(i.e., high capacity and high quality) but requires

additional investment, and is logistically more

complicated. A switch by farmers from non-bin

drying to combination drying would significantly improve U.S. corn quality.

Three classes of off-farm dryers are used—

crossflow, concurrent-flow, and mixed-flow

dryers. Off-farm dryers are high-capacity, highI

SOURCE: Office of Technology Assessment, 1989

temperature units. Crossflow models are the

most prevalent type used in the United States;

they dry the grain nonuniformly and cause excessive stress-cracking of the kernels. Mixedflow dryers are common in other major grainproducing countries; the grain is dried more

uniformly in these dryers and is usually of

higher quality than that dried in crossflow

models. Concurrent-flow dryers produce the

highest quality grain; their main disadvantage

is the relatively high initial cost. A change from

crossflow to mixed-flow or concurrent-flow

dryers would benefit U.S. grain quality.

Moisture content and uniformity within a

storage facility is critical to maintaining grain

quality. The interaction between moisture, temperature, and relative humidity may spur mold

growth, increase insect activity, and cause other

quality losses (figure l-l). Basically, grain moisture in equilibrium with 65 percent relative

humidity will support mold activity, but different grains will create the equilibrium with relative humidity at different moisture levels. That
9

is why wheat and soybeans cannot be stored

at the same moisture content as corn. When

controlling insects, high moisture content increases absorption of fumigants such as methyl

bromide, requires an increase in dosage, and

accelerates the breakdown of pesticides such

as malathion.

The equipment and methods used to fill a storage bin affect the performance of aeration systems used to control the effects of moisture/temperature/humidity. Dropping grain into the

center of a bin causes a cone to develop, with

the lighter, less dense material concentrating

in the center (in spoutlines) while the heavier,

denser material flows to the sides. This impedes

airflow during aeration, and fosters mold

growth.

In large horizontal storage areas, loading

from the center or from a loader that is gradually moved backward through the center of

the building as the pile is formed causes similar problems. If grain is piled over aeration

ducts on the floor by moving the loading device back and forth, airflow will be greatly increased. However, airflow distribution is not

as uniform as in upright bins. Some methods

of filling piles also result in segregation of fine

materials. These accumulations are more subject to insect and mold growth, and they divert

airflow. But piles are difficult to aerate and the

shape of some restricts uniform airflow.

Nonuniform moisture levels can lead to spoilage in localized areas within a storage facility.

Moisture and temperature within a grain mass

will not remain uniform over time. Moisture

will migrate in response to temperature differentials. If the outside air is warmer than the

grain, the circulation reverses, and the area of

condensation shifts to several feet below the

grain surface, although still in the center.

The effect of moisture migration on storage

is that grain assumed to be in a storable condition is not. Cold weather migration primarily

affects grain in land-based storage, causing deterioration as temperatures rise in the spring.

Warm weather migration is particularly vexing for grain in transit from cold to warm areas

of the United States and from the United States

through warm waters to foreign buyers. A barge

or ocean vessel is basically a storage bin and

will experience the same migration phenomena

as land-based storage facilities.

Broken Grain and Fine Materials.—Some

grain damage or breakage generally occurs

whenever grain is harvested. Overall, damage

is always much greater in extremely wet or extremely dry grain. When grain is harvested at

high moisture levels, the kernel is soft and pliable. Moist kernels deform easily when a force

is applied and greater force is needed to thresh

wet kernels than dry ones. Thus, wet kernels

suffer more damage than drier ones. However,

drier kernels can break when the same force

is applied. Different optimal conditions thus

exist for each grain,

In addition to grain breakage, factors such

as weed control and kernel density, especially

in wheat, also affect a combine’s ability to harvest and deliver clean grain. Cutting below the

lowest pod or wheat head inadvertently introduces some soil into the combine. Most soil is

aspirated from the rear of the combine unless

the soil particles are about the same size as the

kernel, in which case they pass through the

cleaning sieves with the grain.

Harvesting technologies normally separate

and remove material larger than the grain (such

as plant parts) and material significantly smaller

(like sand and dirt). Sloping terrain, however,

can affect this process. Side slopes also create

problems since the tendency is for material to

congregate on the downhill side of the cleaning shoe,

The main factor affecting the combine’s cleaning performance is the amount and type of

weeds present in the field during harvest. Weed

control is one of the most serious problems facing many U.S. wheat producers. This is also

true for Southeastern U.S. soybean-producing

areas, where a warm, wet climate is conducive

to weed growth. The amount of weeds affects

not only grain yield, but also the amount of foreign material present in the harvested grain and

the combine’s ability to remove this material.
10

Combines are being modified to improve their

performance in weedy fields. In the case of

wheat, kernel size has been decreasing, which

complicates this modification. The trend

toward smaller kernel size is a concern because

the seeds of most grassy weeds are smaller and

lighter than wheat. Thus, smaller wheat kernel size reduces the margin between wheat and

weed size and, therefore, increases the difficulty of cleaning within the combine.

Rapidly drying moist grain with heated air

causes stress cracking. The drying operation

itself does not cause grain breakage, but can

make grain more susceptible to breakage during handling later. Cleaning grain before it

reaches the dryer can improve dryer efficiency.

Introducing clean grain to the dryer:

● results in a more uniform airflow in the

dryer and thus a more uniform moisture

content of the dried grain;

Ž decreases the static pressure (airflow resistance) of the grain, thus increasing the

airflow rate and dryer capacity; and

● eliminates the drying of material that

detracts from final grain quality.

Obviously, precleaning also has disadvantages. It requires additional investments in

cleaners; the handling of wet, broken grain and

fine material; and the rapid sale of wet, easily

molding material; and it results in some drymatter loss. Although the advantages of precleaning wet grain are fairly well understood

by dryer operators, most avoid precleaning. The

quality of the U.S. grain crop would improve

substantially if precleaning were adopted.

Mechanical damage during handling results

in grain breakage, which produces broken grain

and fine materials. This causes a decrease in

quality, greater storage problems, and an increase in the rate at which mold and insects

tend to invade stored grain.

Research shows that breakage in handling is

more significant for corn than for wheat and

soybeans. Higher moisture content and higher

temperatures prove to be the best conditions

to minimize breakage but are opposite of the

optimal safe storage moisture and temperature.

The effect of repeated handlings on grain breakage is cumulative and remains constant each

time grain is handled or dropped. This is true

whether or not the broken material is removed

before subsequent handlings.

The impact of grain breakage and fine materials on all aspects of the system has resulted

in the need to clean grain. Cleaning wheat in

commercial handling facilities is normally

limited to removing dockage, insects, and, to

a limited degree, shrunken and broken kernels.

For corn, cleaning regulates the amount of broken kernels and foreign material; for soybeans,

it affects the amount of foreign material and

split soybeans,

Cleaning corn to remove broken kernels and

foreign material is required at each handling

in order to meet contract specifications and

avoid discounts. For wheat, however, most

dockage is generated during harvest, and normal handling does not cause significant increases. Therefore, cleaning is not required at

each handling. Soybeans, on the other hand,

fall somewhere in between regarding their

breakage susceptibility and the amount of cleaning required at each handling.

The amount of grain cleaning required prior

to storage involves the factors of risk to grain

deterioration as a result of mold and insect invasions and the costs associated with maintaining quality. Broken grains, grain dust, and other

fine materials have the greatest effect on the

performance of insect control interventions.

When a protective treatment is applied, grain

dust may absorb much of the insecticide, which

reduces the effectiveness. Likewise when a fumigant is applied, concentrations of dust and

fine material may require increased dosages to

penetrate the grain mass. Dust also inhibits

penetration of fumigant gases causing nonuniform penetration.

Ability of System to Maintain Quality.—

Technologies are in place to harvest, maintain,

and deliver high-quality grain. Each technology must be used, however, in a manner that

is conducive to maintaining quality.
Although the data indicate that nearly any

combine can deliver acceptable grain quality,

farmer-operated combines tend to record more

damage than the combine should deliver. From

a technology standpoint two areas need emphasis:

1. increased education to help operators better understand the interactions of cylinder/

rotor speed, concave openings, fan speed,

and sieve openings with grain quality and

losses; and

2. more monitoring devices and possibly

automatic controls on combines to help

operators adjust or fine-tune the combine.

Weed control and its relationship to kernel

size and density are critical to optimum combine performance. Unless new technologies addressing this area are developed or improved

weed control measures are forthcoming, the

combine’s ability to harvest and clean grain will

continue to present problems.

A significant improvement in grain quality

can be obtained by optimizing the dryer operating conditions of existing crossflow dryers,

by precleaning wet grain, by selecting the best

grain genotypes, and by installing automatic

dryer controllers.

Molds will grow on any kernel or group of

kernels that provide the right conditions. Therefore, moisture content and uniformity within

storage facilities are critical to maintaining

grain quality. Maintaining low temperatures

and moisture levels in grain is the principal way

to preserve grain quality and prevent damage

from molds and insects. Aeration is also a very

effective tool. The rate of development of both

molds and insects is greatly reduced as temperature is lowered.

Many storage bins, especially on the farm,

are equipped with aeration systems but often

are not used effectively. Farm storage bins,

especially smaller and older ones, generally are

not aerated. Small bins will cool or warm

quickly enough with the changing season that

moisture condensation may not be a serious

problem. A majority of farm aeration systems

are either not operated at all or not used enough.

The most common problem is not running the

fans long enough to bring the entire grain mass

to a uniform temperature level. If a cooling front

is moved through only part of the grain, a moisture condensation problem is likely at the surface where the warm and cold grain meet.

In addition to aeration, the turning and transfer process mixes grain and contributes to a

more uniform moisture and temperature. In facilities not equipped with aeration, turning has

been the traditional means of grain cooling.

This approach requires much more energy than

aeration does, however, and it can contribute

to physical damage by breaking the kernel.

Grain in horizontal or pile storages cannot

be turned because of the difficulty in unloading and moving it. In order to turn grain, a handling system must have empty bins that are connected by a conveying system. This is not the

case on most farms.

Most grain storage facilities provide a natural habitat for certain harmful insects even

when the facility is empty. Grain residue

trapped in floor cracks and crevices, in wall

and ceiling voids, and on ledges provides an

ample supply of food to sustain several insect

species. Thorough cleaning is the first and most

effective step toward preventing insect infestation of freshly harvested grain. Because insects

live from season to season, cleaning and removing trash and litter is important, Also, a thorough cleaning should precede any insecticidal

treatment of storage facilities if the full value

of the treatment is to be gained.

For several reasons, such as remoteness of facilities, small amounts of grain to be treated,

and lack of information, farm storage facilities

are often the inappropriate site for insect control treatment. Grain that has not received a

properly applied treatment can become mixed

with noninfested grain when marketed, magnifying the problem and creating greater loss

and the need for more expensive and timeconsuming remedies later.

The high-speed, low-cost U.S. grain system

does not readily accommodate special quality

needs. While these needs can be met by slow-
12

ing belt speed, installing and using cleaning

equipment, eliminating unneeded handlings,

and preserving the identity of grain, most of

these actions increase costs.

All factors affecting quality just discussed—

nonuniform moisture, moisture migration, temperature and humidity, insect invasion, and

mold development—have an impact on grain

quality during shipment. No mode of transportation is equipped with aeration, nor can grain

temperatures and corrective actions be taken

during shipment. Moisture migration can be

more dramatic since grain may undergo several outside air temperature and humidity

changes. This is especially true when grain is

loaded in a cold climate and transported

through warm waters rather quickly to a warm,

humid climate. Therefore, moisture uniformity is critical to maintaining quality during

shipments.

The interactions between technologies regarding moisture content and breakage on grain

quality are evident. Each technology is capable of preserving grain quality. Once inert material such as weed seeds, dirt, stems, cobs, and

so on are removed from the grain, no further

cleaning is required. But grain, especially corn,

must be cleaned to overcome breakage that is

inevitable due to handling in the system. Once

grain quality deteriorates at any step in the process, it cannot be recovered.

Grain Standards

Standards should reward positive actions,

such as genetic improvement and sound harvesting, drying, and marketing practices. They

should also incorporate descriptive terminology that provides the best information available on the value of each shipment. All changes

must be evaluated against the criterion of providing information that is worth the cost of obtaining it. Optimum information, not maximum

information, is the goal. Proposals for change

must be tempered by current capabilities of the

industry, the cost of adjustments versus potential benefits, the realities of international trading rules, and history of the grain industry.

Measurement and description of quality is only

one part of the problem. Quality must be evaluated in the context of technology, competition,

foreign demand, and processing requirements.

Current grain standards are limited in four

important ways:

1. They create incentives for practices inconsistent with good management and efficiency.

2. They fail to identify many of the characteristics related to value in use.

3. They fail to reward producers and handlers

for improved drying, harvesting, handling,

and variety selection.

4. Grade limitations on many factors are arbitrary, sometimes not reflecting real differences in value, and in some cases are not

consistent with statistical principles.

No ideal standard will be found, and any revisions would have to consider trade-offs. To

move toward an ideal system, grain standards

should be changed to include:

● grade-determining factors;

● non-grade-determining factors; and

● definition and measurement technology for

official criteria.

Grade-determining factors should relate to

sanitary quality, purity, and soundness (absence

of imperfections). Grade would be based on factors such as impurities, foreign material, total

damage, and heat damage. The lower the values

of any of those defects, the greater the value

of the product.

Non-grade-determining factors would address

properties such as broken kernels, moisture, oil

and protein content, and other intrinsic characteristics or physical properties that influence

values for major processing uses. Higher or

lower percentages for those do not necessarily

mean higher end-use value. Many chemical and

physical properties that influence the quantity

and quality of products derived from grain

probably are yet to be identified. More research

may add to the list of properties. The criteria

for inclusion should be that the cost of obtaining the information is less than the value of that

information to users who need it. By starting

with the major products generated from each
13

grain, a list of physical and chemical properties can be developed that are correlated with

the value in use. New rapid testing technology

is also a requirement prior to inclusion.

Official criteria factors would be those requested by buyers and sellers. These would be

developed only after evidence of sufficient demand to cover the cost.

Grain can be inspected many times as it

moves from the farm to its ultimate destination.

Normally it is tested for one or more important characteristics each time it is loaded into

and out of a grain elevator. The number and

type of tests varies, from those provided for in

the grain standards to measures of intrinsic

characteristics not covered by the regulations.

The U.S. Grain Standards Act (USGSA) requires that standards be developed and used

when marketing grain, Even though the tests

provided for in the grain standards must be

used, no requirement exists on who will perform the tests and what tests will be performed

on grain moving domestically in the United

States. In fact, two U.S. Department of Agriculture agencies are authorized to perform testing services using the grain standards on domestic grain movements. The only mandatory

testing is performed by the Federal Grain Inspection Service (FGIS) on export grain.

Since no single policy on inspecting grain exists, no one group is responsible for developing

and overseeing the tests and equipment being

used. Regardless of which tests are performed

and who performs them, several factors are important to testing. These include instrument

precision, instrument standardization, the

choice of reference methods and traceability

to standard reference methods when developing rapid objective tests, calibration, and natural error resulting from sampling.

As the relevance of additional tests performed

on an ongoing basis becomes clearer, the need

for standardizing equipment and procedures becomes more critical. Also, criteria must be

established to govern the design of rapid test

equipment. However, development of rapid

tests must meet the basic criteria associated

with standardization, traceability to standard

reference methods, and calibration. In addition,

rapid tests must be evaluated in terms of speed,

cost, accuracy, durability, and capability of handling wide ranges in quality.

Buyers’ Attitudes

An extensive survey of domestic and overseas grain buyers was conducted for this study

to determine their attitudes toward quality,

grain standards, and merchandising practices.

Several general points of importance were

clear.

First, to determine what is considered quality for any given grain, the ultimate use must

first be known. Each domestic and overseas industry has defined quality in terms of the areas

important to its markets.

Regarding key attributes not currently covered by grain standards, no one set of quality

attributes for wheat meets the demands for all

wheat products. Differences in what are considered important attributes exist between domestic and overseas wheat millers and by region of the world. Protein, hidden/dead insects,

falling number, pesticide residue, mycotoxins,

and dough handling tests were considered the

most important. Falling number and pesticide

residue were identified by both groups as tests

that should be included in the wheat standard.

Hidden or dead insects were also identified by

domestic millers for inclusion.

For corn, the determination of important attributes is industry-dependent except in areas

regarding wholesomeness, health, and safety.

Items such as stress cracking, breakage susceptibility, and hardness are more important to wet

and dry millers than to the feed industry. However, attributes such as pesticide residue, mold,

mycotoxin, and hidden/dead insects are important to all those surveyed.

Commonality of important attributes is more

evident in soybeans than in wheat or corn between domestic and overseas processors. The

most important attributes are protein, oil, and

free fatty acid content.
14

Second, the grain system’s ability to deliver

important quality attributes consistently is as

important as the attributes themselves. Problems with uniformity are especially acute in

wheat and corn. As processing technologies become more sophisticated, the demand for uniformity will become more critical.

U.S. Farm Policy

Two important features of U.S. farm policies

have an impact on several aspects of quality.

The inverse relationship between yield and intrinsic quality (e.g., protein in wheat) means the

target price program) has a negative long-term

impact on intrinsic quality. This is because the

target price typically exceeds the market price,

creating an incentive to expand yields. Impacts

vary by grain and region, depending on the extent of the inverse relationship. When target

prices, which are based on yield, exceed market prices and if the premiums associated with

the measure of intrinsic quality are unchanged,

there are incentives to increase yield at the expense of intrinsic quality. This effect has been

exacerbated in previous farm bills, which used

different methods of determining yield. The total impact in the case of wheat has been to force

market premiums for wheat protein to relatively

high levels in order to neutralize producers’ decisions.

Administration of the loan rate program also

has an impact on intrinsic quality, as well as

on physical and sanitary quality. In particular,

the market for measurable quality characteristics is distorted due to the fact that premiums

and discounts on forfeited grains, especially

wheat, are less than those determined in the

market. Poorer quality grain is put under storage, and market differentials are depressed.

Changing Role of Demand

Wheat, by its very nature, is the most complex of the three grains for defining quality because of the vast array of products and processing technologies used to produce the

products. Corn is somewhat less complex in

that fewer products are produced and quality

concerns can be traced to the individual industries. On the other hand, the quality required

by one corn industry is not necessarily important to others. This creates a situation whereby

decisions regarding corn quality must be assessed in terms of major usage. Quality concerns of different industries using wheat are

somewhat overcome by the fact that different

types of wheat exhibit different properties. Soybean quality is the least complex issue because

the vast majority of soybeans are used to produce oil and meal.

The varying quality requirements exhibited

by these industries highlight the need for the

United States to become more aware of individual industry requirements if the goal is to produce and deliver high-quality grain. The United

States has developed the reputation as a consistent supplier for any type and quality of grain

desired. To become a supplier of high-quality

grains, it must become more quality-conscious

and develop a reputation as a high-quality supplier. The Nation must understand the specific

quality requirements of its customers in order

to match them with the quality delivered, and

must become more aware of the dynamic issues

surrounding the qualities required by the marketplace. Areas such as technological advancements in processing technologies, government

policies, customer preference, development of

new finished products, and consumption patterns all affect customers’ purchasing decisions

and their definition of quality at any one point

in time,

Quality in the Marketplace

Quality attributes required by individual industries directly relate to the processing technology used and the needs of the various finished products. In the case of corn, what may

be considered high quality to feed manufacturers is not necessarily high quality for the wet

and dry milling industries. Wheat, used in a

multitude of products, has quality requirements

that differ not only by type and individual product, but between mills using the same type of

wheat to produce flour for the same type of

product. Baking technologies for wheat flour

vary not only in the United States, but also
15

within and between countries using wheat purchased from the United States; so defining one

set of wheat quality characteristics for even one

type of wheat or flour is not useful,

High quality, as defined by the specific attributes required by each industry, is constantly

changing. However, the ability to produce and

deliver high-quality grain can mean more than

just providing grain that meets specific test results. What constitutes high quality from the

customer’s point of view can range from special handling (low-temperature drying of corn)

to the uniformity of specific attributes within

and between shipments.

The OTA survey specifically asked respondents to rank the importance of uniform quality

between shipments (figure I-2). Domestic and

overseas respondents considered uniformity between shipments as being important even

though they differed on which attributes were

more critical. The results from the question regarding overseas millers’ preference for U.S.

wheat compared to that of other exporters further demonstrates the importance of uniformity. Canada and Australia stress uniformity between shipments and this fact generally

accounts for wheats from these countries being ranked as first choice.

To further complicate the task of identifying

important quality attributes for specific industries, some traditional measuring technologies

are not accepted by certain industries producing the same product. This fact stood out in

OTA survey results for domestic and overseas

wheat millers. Tests for theological properties

(extensograph, alveograph, and mixograph)

were considered more important by overseas

wheat millers than by domestic millers, And

even though overseas millers considered these

tests important, their importance varies by region of the world.

As processing technologies become more sophisticated through automation or as more

demanding qualities are required for finished

products, the need for specific attributes within

well-defined ranges becomes more critical.

Technologies for baking bread, rolls, and similar products in large bakeries have advanced

Figure 1-2. - Importance of Uniformity

Between Shipments

WET SOY WHT-D WHT-O

Industries

ABBREVIATIONS:

FEED = Feed manufacturers WHT-D = Wheat millers

DRY = Dry millers (domestic)

WET = Wet millers WHT-O = Wheat millers

SOY = Soybean processors (overseas)

a4 O Neutral 60 Moderately important

50 Slightly Important 70 Extremely important

SOURCE. Office of Technology Assessment, 1989

significantly. While bread can be made by hand

using low-protein wheat, large dough-mixers

and other equipment found in large automated

bakeries place too much stress on low-protein

flour, resulting in unacceptable finished products. The differences in how flour will be baked

plays a very important role in determining the

specific values for the various attributes required of the flour.

In addition to advances in processing technologies, technological advances in other areas

can have an impact on the quality required by

different industries. For many years, highprotein wheats have been blended with lowprotein wheats to strengthen flour, More recently, vital wheat gluten, a product contain-
16

ing 75 to 80 percent protein, has been used as

a flour fortifier. The recent expansion of vital

wheat gluten production is the result of technological improvements in breadmaking, rapid

population growth, and increasing trend

toward urbanization in some countries.

Many countries striving to become self-sufficient in wheat Production are producing vital wheat gluten to fortify locally produced lowprotein wheat. Some European processors are

also producing isoglucose, a sweetener and

sugar substitute, from wheat starch (that portion of the wheat kernel remaining after the gluten is extracted) to produce something similar

to corn sweetener in the United States.

Corn, which has always been considered

mainly as an animal feed, is beginning to experience pressures in areas similar to those

affecting wheat. As feed manufacturing becomes more sophisticated and automated, and

as customers (especially in the poultry industry) need strictly controlled and balanced diets,

the demand for quality attributes and consistency in delivering these attributes is taking on

increased importance. In other cases, individual corn dry and wet milling companies are

placing more stringent demands on the quality of corn they purchase. Companies are contracting with farmers to grow certain varieties

and perform special handling, such as lowtemperature drying.

Traditional quality attributes, even though

varied, may be influenced by technological advances, economic concerns, and government

policies here and abroad. For the United States

to produce and deliver high-quality grain, it

must not only become increasingly aware of

concerns over quality expressed by domestic

and overseas industries and match quality to

their wishes, but it must understand the reasons

why countries purchase grain in the first place.

Knowledge of customer preference, consumption patterns, and the role of government policies is critical when considering steps the

United States should take to enhance the quality of grain in international trade.

POLICY OPTIONS

The overall purpose of any policy change related to this grain issue must be to create an

environment that enhances grain quality. In

general, the important features of the U.S. grain

system are breeding, handling, grain standards,

and the market for quality characteristics. Each

has an effect on grain quality. Institutions, policies, and trade practices have an impact on

these sectors, and therefore on quality. Policy

discussion in this country has traditionally focused on only one component of the system—

grain standards. Yet given that it is the operation of the overall system that influences grain

quality, a far greater number of policy options

exist than are normally discussed.

The notion of interdependence in the production and marketing system with respect to quality is illustrated in figure 1-3. This triad could

be viewed as a three-legged stool; each leg has

an impact on quality as well as on the system.

Premiums and discounts for quality characteristics are determined in the market, where

buyers and sellers interact. producers make

varietal and agronomic decisions in response

to incentives. These, however, are also influenced by farm programs. The demand for characteristics is influenced by end-use needs and

foreign competition. Merchants and handlers

procure, handle, condition, and blend grain to

meet contract specifications. In addition, they

make offers on what they can sell, and at what

price differentials, based on the availability of

quality characteristics and their conditioning

capabilities. Each activity is influenced by the

incentives established in the market, by trading rules, and by grain standards, which provide a description that is useful for transactions

and which therefore facilitate trade. Relevant

end-use characteristics generally are not included in grain standards, however.

The objectives of public and private plant

breeders in variety development include yield,

disease resistance, harvestability, and quality.

In addition, participants have procedures and
17

Figure 1-3.—Components of the Interdependent

Grain System

Variety development I ● Plant breeders’ objectives

● Release criteria and

procedures

I

Grain standards

. Grade-determining factors

● Non-grade-determining

factors

● Official criteria

no effort to coordinate or integrate policies

affecting these activities. Any policy on grain

standards will affect varietal development and

the efficiency of the market for quality characteristics. Similarly, any policy affecting the market (e.g., incentives) will have an impact on variety development and grain standards. The

inability to measure intrinsic characteristics in

grain standards has implications for policies

affecting the market and variety development.

Policy changes could be focused on any system component, but the effectiveness must include impacts elsewhere. A number of phenomena that influence quality (e.g., weather) cannot

be affected by policy and a number of policies

are short-run and only treat symptoms. Policies

developed here aim to affect underlying causes

of the problem, which over the long term would

result in improved quality. Thus the policy options are limited to three general categories—

variety controls, market intervention, and grain

standards (table 1-2). Within each are a multitude of alternatives, and only selected ones are

presented. Policies available are a continuum

within each category rather than discrete

choices, as implied by the table. The emphasis

here is that policy should take the long view,

and it should have the objective of coordinating policies across the three sectors.

wMarket for quality characteristics

● Producers

– Variety selection

— Cultural practices, harvesting, handling

– Farm programs

● Handlers and merchants

– Condition and handle

– Contract/trade

● End-users

– Foreign competition

– Domestic production

– Products produced

Variety Controls

SOURCE: Office of Technology Assessment, 1989

criteria for variety release, Ultimately, the market for seed determines the success of varieties.

Some characteristics, e.g., yield, are more easily measured than others by market participants. Breeders also have some control over

intrinsic quality characteristics that are not easily measured in today’s marketing system.

The interdependence of the system’s components must be recognized in the evaluation of

policy options with the objective of establishing a more integrated relationship among them.

In a number of other grain exporting countries,

the policies are more integrated and better coordinated. In fact, the United States has made

Three important considerations lead to the

policy options listed under variety controls.

First, with few exceptions grain standards do

not measure important intrinsic characteristics.

Second, intrinsic quality characteristics differ

significantly across some grain varieties. Third,

varieties are not visually distinguishable, thus

segregation in the market system is precluded,

resulting in increased uncertainty in end-use

quality. These three points apply to some extent to each of the grains. The classic case is

that of wheat, in which performance varies

across varieties, and increasingly it is becoming difficult to differentiate wheat in the marketing system. In some of these cases it may

be easier to identify variety, or groups of varieties, than intrinsic characteristics. Further,
18

Table 1-2.—Fundamental Policy Alternatives

Variety controls Market intervention Grain standards

No change Marketing board Mandatory USGSA inspection

Variety identification/ Export bonus Single agency to approve testing

categorization No change in loan policy Mandatory USGSA inspection in conjunction

Variety licensing Increased differentials in government with NIST equipment approval

policies

Minimum quality specifications for

farmer loans

SOURCE: Office of Technology Assessment, 1989

identity of a variety provides more comprehensive quality information than any subset of

measured quality characteristics.

Domestic processors attempt to resolve problems of varietal differences, to some extent, by

purchasing by location or region. Foreign buyers, however, or in general any buyers using

purely grade specifications are precluded from

this alternative.

No Change

Maintaining the status quo has four main implications. First, intrinsic quality characteristics will continue to lack uniformity among

States/regions/shipments. In the current system, with only informal, uncoordinated variety release criteria, many basic characteristics

differ among varieties. These characteristics

lose their identity in a market incapable of

measuring end-use characteristics. Consequently, important intrinsic quality differences

existing regionally are not detected in the marketing system.

Second, problems will be created elsewhere

in the system due to the inability to measure

intrinsic quality. In particular, increased pressure would be placed on grain standards to

measure intrinsic quality within the marketing

system.

Third, the current lack of information on intrinsic quality in some grains will continue, reinforcing current inefficiencies in the market.

Fourth, productivity growth would be facilitated to a greater extent given complete

dom on variety release and selection.

freeIf there is no change from the current system

of administering variety release, the pressure

on grain standards to introduce measures of intrinsic quality will increase. Other countries

use variety identification and release procedures in part to reduce the pressure on grain

standards to measure intrinsic quality. Alternatively, by incorporating intrinsic quality into

farm program policies (discussed later), at least

some incentive could be built into the system

to improve intrinsic quality.

Variety Identification Categorization

Any sort of variety identification or control

scheme would pose administrative challenges.

One alternative would be to provide a mechanism in which varieties can be identified in the

market system. Such mechanisms currently exist and are used in other exporting countries.

These consist of an affidavit system, random

testing using electrophoresis, and categorization. Producers would declare the variety at the

point of first sale or loan application. This

would provide information to handlers on segregation based on grain categories or groups

of varieties. Categories would be developed

according to end-use similarity and could become part of the grain standards.

Alternatively, variety or groups of varieties

could become part of the contract governing

the transaction, as is the case in the French system. The number of categories established

would vary by grain, depending on the three

considerations just discussed and on end-use

specificity. Thus, for example, if only one end

use existed and the varieties did not differ suffi-
19

ciently with respect to intrinsic quality, only

one category would be necessary. On the other

hand, for wheat, in which there are intrinsic

differences across varieties and a multitude of

end uses, there would be a larger number of

categories. The intent here would be to formalize a mechanism not dissimilar from the current system of classification for wheat. The

difference, however, is that the current system

for classification relies on visual distinguishability, and categorization is based on fairly

imprecise criteria.

A variety control scheme would increase information (by category of varieties), thus increasing the efficiency of the market in its allocative role. For most grains, variety is a better

indicator of quality than are selected tests for

quality. Thus, buyers’ information regarding

quality would be improved. The increase in information would raise the efficiency of the market, resulting in improved signals being transmitted to producers, breeders, and end-users.

Such a program would pose a challenge for

administration in the United States, especially

given the numerous varieties currently grown.

It would be further complicated by the fact that

intrinsic quality depends not only on variety

but also on where it is grown and on local climatic factors.

Contract specifications would increase in

complexity. The informational requirements

for contract specification would increase, particularly of foreign buyers. Depending on the

extent of categorization, however, this complexity could be reduced.

Introduction of a variety identification

scheme would result in incentives and disincentives being readily associated with varieties

with desired/undesired intrinsic characteristics.

In addition, using a variety identification

scheme would reduce pressure on the grain

standards to measure intrinsic performance in

the marketing system. Categorization of varieties would serve that function.

Variety Licensing

A more restrictive approach would be to institute a variety licensing scheme. Varieties

would be subjected to criteria administered at

a national level for release into the market system, Licensing of varieties takes various forms

in different exporting countries—from quite restrictive, such as in Canada and Australia, to

fairly neutral, as in France. The intent of each,

however, is to provide some mechanism that

assures certain intrinsic characteristics, given

that they cannot be easily detected in the market system, and to apply uniform criteria

throughout the country, i.e., to reduce uncertainty of intrinsic characteristics through uniform application of release criteria. Administration would require procedures similar to

those of the variety identification system just

described. In addition, some criteria would

have to be established for categorization (i.e.,

to license varieties by end use), and for administration.

Licensing varieties would increase uniformity and raise the ability to control intrinsic quality, A formal mechanism could be provided for

categorization relative to a simple variety identification scheme. Due to locational differences

in quality, varieties would have to be licensed

by location and by end use.

Depending on administration, this scheme

could be viewed as restrictive, i.e., of productivity growth. However, this is not necessarily

the case, as the situation in France indicates,

This approach would be difficult to implement,

complex to enforce, and likely to create a

bureaucracy.

A stricter variety licensing system would have

similar effects on other parts of the system as

just discussed under variety identification. In

particular, licenses could act as surrogate grain

standards for intrinsic characteristics.

Market Intervention

Marketing Board

Central to the U.S. system is the market in

which prices are established. Embedded in this

market, and all prices, are premiums and discounts for measurable characteristics, which

allocate grain across different users. In addition, these quality characteristics provide in-
20

centives and disincentives for participants

throughout the marketing system. Several other

countries accomplish this by some form of

board control. Thus, one option would be to introduce a marketing board system in the United

States to resolve quality problems. The emphasis of the discussion here is on the implications

of a board for quality, in particular, and the coordination of policies on quality. Other aspects

of a board operation are more far-reaching (e.g.,

bargaining power, resource allocation, impacts

on non-board grains, impacts on physical coordination) and are not discussed here.

A primary benefit of a marketing board would

be to coordinate the many aspects of the production and marketing system that have an impact on quality. Quality would be improved to

the extent that only two transactions—one between producer and board, and another between board and buyer—would take place. This

is in contrast to the multitude of current transactions, all requiring measurement of quality.

Administration of price differentials would

be more subjective and judgmental in such a

system since transactions would take place

without an active market. Indeed, market determination of price differentials is an important advantage and role of the U.S. marketing

system.

Operating a grain marketing board in the

United States would be costly, given the complexity and breadth of the system. Countries

with boards operate in relatively simple logistical systems, and with few grains. When either

of these increases, as would be the case in the

United States, the problems associated with bureaucratic allocation decisions intensifies, The

highly efficient U.S. grain handling and distribution system, due in part to the competitive

environment, would be lost in a board-type system. Thus, it is likely the costs of imposing a

board system in the United States would outweigh the benefits of quality improvements.

Imposition of a board system could reduce the

emphasis on grain standards at the point of export, and for that matter throughout the system.

This is presuming that sufficient earlier controls were imposed to resolve grain quality

problems, thereby reducing the importance of

quality measurement at the point of export. In

addition, variety release procedures could be

easily administered in a board system. Incentives could be administered rather than having to rely on market determination.

Export Bonus

An alternative policy would be to establish

a bonus payable to exporters who deliver grain

having quality superior to that specified in the

contract. Conceptually, this addresses the system’s merchant-handler component, This policy is discussed in the context of being applied

at the point of export, but in general it could

be applied elsewhere in the marketing system.

An export bonus program could have immediate results, especially if tied to a physical or

sanitary quality characteristic. It would result

in an increase in quality perception, or in attention to the issue, Longevity should be a concern, however, in that if terminated, the effects

likely would not last.

Administration would be costly. Several important administrative points would need to be

considered, First, which quality characteristic(s) would be tied to the bonus—physical, sanitary, or intrinsic? Quality would improve on

whatever characteristic received a bonus. Depending on longevity, however, the bonus

would likely not influence intrinsic quality, Second, should the bonus be applied at the point

of export or origin? One risk is that importers

may manipulate the system by specifying a

lower grade in order to receive the same grade

they traditionally purchase, but at a lower price,

An export bonus program, by definition,

would be oriented to the merchants and handlers in the system. It would provide incentives

for them to improve the quality on particular

attributes and for particular shipments to which

the bonus was applied, Due to competition

within the industry, any benefits would be distributed to appropriate decisionmakers so as

to provide incentives. More information would

not be provided to the market, however, nor

would there be a reduction in information uncertainty, so the efficiency of the market would
21

not be improved. Breeders’ objectives and release criteria would be affected only to the extent that the bonuses were applied to intrinsic

characteristics, and over very extended time

periods.

No Change in Loan Policy

Another option is to leave unchanged the current administration of the policy on loan forfeitures and grain stored for the Commodity

Credit Corporation (CCC). The fundamental

problem is that price differentials for loan forfeitures and transactions on CCC-owned grain

are substantially less than those in the market.

The market for quality characteristics is therefore distorted. The loan and CCC storage practices would continue to support the price of

lower quality grains. In addition, there would

be essentially no change in intrinsic, physical,

or sanitary quality from that of the current

system.

Lower quality grain under extended storage

could deteriorate more than if it were of superior

(physical and sanitary) quality. Growers would

remain isolated from the market and therefore

incentives for improving quality would be

masked.

The market is distorted in general in the allocation between storage and commercial sales,

with superior quality grain going to the latter.

Since the program does not effectively distinguish intrinsic quality, loan rate disincentives

are not effective at transmitting signals to producers. Thus, a major impact of not changing

the policy would be to increase the role and function of grain standards in measuring quality.

Increased DifferentiaIs in

Government Policies

The administration of premiums and discounts for loan forfeitures and transactions involving CCC-owned grain could be revised to

provide incentives to maintain or enhance quality. These could be attached to intrinsic as well

as other physical and sanitary quality characteristics. In a number of other countries, quality problems are addressed as a matter of agricultural policy, These take the form of incentives by using regulations and substantial

premiums and discounts for quality deviations.

Realigning the incentive system via farm policy addresses one component of the system, i.e.,

the market for quality characteristics, That market already exists and develops premiums and

discounts. But it is distorted somewhat by

administration of the farm program. This policy option would thus be eliminating a distortion, which would allow the market to function more efficiently. Alternatively, farm policy

could take the lead by providing price differentials at least equal to market differentials, to provide incentives throughout the system.

CCC administers programs for handling and

storing CCC-owned grain. Different rules are

applied to country and terminal elevators. CCC

requires that terminal elevators deliver the quality represented by the warehouse receipts and

it discounts individual railcars. CCC does not

pay terminal elevators for overdeliveries in

quality. This is not the case for country elevators, which are not subject to the same rejection rules if the quality delivered is inferior to

the warehouse receipts and which receive payment for overdeliveries.

One of the few ways to legislate incentives

into the system, particularly for intrinsic quality, is via the price differentials in the loan program. This alternative consists of differentials

associated with loans to be greater than or, alternatively, equal to the market. They could be

applied as currently done, on grades, or on specific physical and sanitary quality criteria. A

very simple example would be a 4-cents/bushel

price differential for clean wheat (i.e., less than

0.5 percent dockage). In addition, measures of

intrinsic quality (e. g., falling number in wheat,

oil content in soybeans, or protein content in

corn) could be incorporated, as in other

countries.

Because the relationship between market

prices and loan values varies across grains, and

because the participation rates vary, this policy would have a greater impact on wheat than

on other grains. In addition, its impact would

only be periodic due to the loan not being effective all the time.
22

If the loan supported prices of higher quality

grain, lower value grain would be forced into

the market, as opposed to into the loan program,

as currently happens. Thus, there would be an

increase in the amount of grain going into alternative uses, with lower end value. The most

vivid example is the use of wheat as animal feed.

Incentives for intrinsic quality could be relatively easily incorporated into the loan program

(i.e., relative to measuring them in the marketing system).

Some type of mechanism for quality measurement would have to be developed for grain

going under loan, e.g., through farmers submitting samples. Establishment of the optimum

price differentials would be difficult to administer. This is especially true given the large number of U.S. markets and given that—at least in

the past—loans have to be announced long before crop quality is determined.

Country elevators would be forced to become

more concerned with maintaining quality, and

CCC would be guaranteed that the quality of

grain received into the country elevator would

be delivered out of the elevator. This change

in policy would also relieve the pressure of

maintaining discount schedules that reflect the

market, in that CCC would not accept quality

below that specified in the warehouse receipts.

This particular alternative addresses the market for quality characteristics, and provides

incentives in an important market for some

grains. Changing the current system would have

a number of system benefits. First, to the extent that intrinsic characteristics are used, variety development would be favorably affected.

Signals from this important market would be

transmitted directly to breeders and would affect their breeding objectives and release criteria. Thus, this provides somewhat of a surrogate for variety control. Second, there would

be somewhat reduced pressure to measure intrinsic quality in grain standards. In the extreme of a proactive farm policy, together with

variety identification/licensing, the role and

function of grain standards could be reduced

to some extent toward measuring physical and

sanitary quality characteristics.

Minimum Quality Specifications

for Loans

An alternative used in many countries is that

of minimal receival standards on grain entering the marketing system. Normally grain marketing is integrally related to prices and policies (e.g., initial payments) and therefore it is

difficult to isolate physical marketing from pricing. As developed here, minimum quality specifications would be applied to grain entering the

loan program as opposed to grain entering the

marketing system. The global application of

minimum quality specifications to the U.S. marketing system would be next to impossible to

implement since a majority of grain under loan

is stored on farms.

The concept of setting minimum quality specifications for loans is similar to the option just

discussed, except that a constraint, rather than

a price incentive, is used for entry into the loan.

Minimum quality specifications could be applied

to physical characteristics (e.g., minimal dockage) or intrinsic characteristics (e.g., variety,

protein, falling number, oil, or meal protein).

If these were integrated into the loan program,

the potential exists for grain not meeting those

specifications to be diverted to the export market. One way to help minimize this would be

to use whatever quality specification has been

established for government programs as a basis for rejecting grain going into an export elevator. This would have the added benefit of reducing the spread of qualities available for

blending within the export elevator.

This policy option would have many of the

same advantages as increased differentials in

government policies. But the minimums would

be difficult to establish and maintain in today’s

political environment. The desirable quality

characteristics to be incorporated in the loan

program could also be those not easily measured in the marketing system. Depending on

the minimum quality specifications (physical,

sanitary, intrinsic, or variety), farmers could

be required to certify the variety planted or to

submit samples of the grain being stored for

testing as directed by the U.S. Department of

Agriculture.
23

Use of minimum quality specifications could

also solve, or contribute to, the resolution of

problems elsewhere in the system. Desirable

varieties or intrinsic characteristics, if used,

would transmit signals to breeders. These

would influence their objectives and release criteria. In addition, the role and function of grain

standards in the marketing system as they pertain to measuring intrinsic quality could be reduced to some extent.

Grain Standards

The U.S. Grain Standards Act states that it

is Congress’ intent to promote the marketing

of high-quality grain to both domestic and foreign buyers, and that the primary objective for

grain standards is to certify grain quality as accurately as practicable.

Mandatory USGSA Inspection

The Federal Grain Inspection Service establishes grain standards, which includes developing technology to measure the factors

contained in the standard. The agency also develops and publishes sampling and inspection

procedures, evaluates and approves inspection

equipment for use during inspection, monitors

the inspection accuracy of its employees and

licensed inspectors, and periodically tests sampling and inspection equipment for accuracy.

Mandatory export inspection is required and

a system of delegated and designated agencies,

along with FGIS oversight, is in place to perform domestic inspections upon request. Therefore, a basic structure is in place for approving

and overseeing all equipment and procedures

used for measuring grain quality characteristics.

Having mandatory inspection on interstate

grain shipments would ensure that the factors

covered by the standards are tested using approved equipment and procedures. It would provide consistency in test results in that the identical procedures are used for each inspection

in the marketplace and are performed by independent, government-sponsored agencies.

Mandatory inspection would focus the primary responsibility y for grain quality measurement on one government agency. The basic

framework is in place through the delegated

and designated agencies, which already own

approved equipment and have trained employees who use FGIS-published procedures. Even

though these agencies are in place, their ability to cover the wide areas required to meet the

needs of country elevators receiving trucks is

severely limited. This fact, coupled with past

problems of regulating truck movement, makes

this policy option only applicable to railcar and

barge shipments.

Imposing this requirement on the market will

increase costs associated with obtaining inspection of grain that would not normally have to

be inspected (i.e., grain moving from one facility to another owned by the same company).

Approval of Testing by

a Single Agency

The National Institute of Standards and

Technology* (NIST), through the National Conference of Weights and Measures, standardizes

weights and measures by developing specifications for instrument precision and accuracy

along with scale tolerances. Currently, NIST

addresses neither grain measures other than

weights nor sampling equipment. In some instances, individual States have developed criteria for approving inspection equipment and

monitored equipment accuracy. (Moisture

meters and mechanical truck probes are prime

examples.)

NIST, in consultation with FGIS, could take

the lead in developing and maintaining equipment specifications and maintenance tolerances. These actions could be in conjunction

with developing new tests that would be included in the standards by FGIS. All equipment

used to measure grain quality attributes would

then be standardized and traceable to national

standards. Variations in testing results introduced by a wide range of equipment accuracies would be minimized. Only approved equip-

*The National Bureau of Standards was recently renamed the

National Institute of Standards and Technology (NIST) with the

passage of the Omnibus Trade and Competitiveness Act of 1988

(Public Law 100-418) as of August 1988.
24

ment could be used to provide testing results,

and NIST oversight would ensure accurate

testing.

The basic framework is in place for this policy option in that NIST already has established

approval procedures, publishes user requirements, and enforces its provisions through State

organizations. Having NIST be ultimately responsible for approving grain testing equipment

that serves as the basis for the grain standards

has the advantage of placing responsibility in

an agency that does not have a vested interest

in the equipment’s use. Yet, NIST does not

cover tests that are subjective in nature, such

as odor, wheat classing, and the determination

of damaged kernels. Nor does the bureau have

any experience in basing a national standardization program on reference methods that are

defined rather than proven.

Other than equipment approved by FGIS or

individual States, no other equipment is approved. Converting to approved equipment

would result in increased costs for those having to dispose of unapproved equipment and

purchase other equipment. This policy option

does not address who will use the equipment

and when it will be used.

Mandatory USGSA Inspection in

Conjunction With NIST Equipment

Approva l

A policy that requires mandatory USGSA

inspection on grain moving in interstate

commerce and a broadening of NIST involvement into grain sampling and testing equipment

captures the advantages of both these options

while minimizing many of the disadvantages

of either.

The advantages of mandatory inspection

on railcars and barges moving in interstate

commerce ensures that consistent sampling

and testing are performed on both subjective

as well as objective factors and that one agency

is responsible for grain testing as well as standards development. The inability to perform

USGSA testing on trucks and at country elevators can be offset to some extent by involving

NIST and its related support systems in the

grain testing area. Even though USGSA inspection would not be performed, those groups that

do perform testing would be required to use

approved equipment and to follow user requirements spelled out in the NIST approval. This

would be the same equipment and user requirements that USGSA inspectors use.

This policy option would allow country elevators to continue to perform their own testing

services on grain received from the farmer, thus

reducing the potential increase in costs associated with mandatory USGSA inspection. However, it would create more uniform testing since

anyone performing grain quality testing will

be required to use NIST-approved equipment

and to follow published user requirements. Coupled with the NIST State support systems already in place to oversee equipment accuracy

and ensure that user requirements are followed,

NIST involvement would provide oversight in

previously uncovered areas.

Interaction Between Standards,

Variety Control, and Market

Intervention

The interdependence between variety control,

market intervention, and grain standards is

complex. The debate over grain quality has focused primarily on grain standards, but physical, sanitary, and intrinsic grain qualities are

a function of the variety planted, farmer practices, environment and geographic location,

handling practices, end-user preferences, marketing, government policies, and the system’s

ability to measure these factors accurately.

Therefore, policy options have an impact on

many areas, not just on grain standards.

Policy alternatives outlined in the variety control section address intrinsic quality characteristics, since physical and sanitary quality cannot be addressed through such programs. Policy

choices discussed in the market intervention

section can address the easily measurable factors for physical and sanitary quality, and can

be expanded to deal with intrinsic quality attributes once technology is developed to measure them in the marketplace.
25

In both the variety control and market intervention sections, an option for no change in

present policies has been provided. Such an approach places the responsibility for physical,

sanitary, and intrinsic quality solely on grain

standards. For the physical and many sanitary

quality concerns, relying on the grain standards is a relatively simple matter that does not

involve adoption of new technology. It involves

taking existing factors and applying appropriate criteria. Several factors could be combined

(as is the case of foreign material and dockage

in wheat, as many have suggested, as either

grade-determining or non-grade-determining)

or factors could be separated (as is the case with

broken kernels and foreign material in corn)

to describe quality more accurately. In addition to rearranging existing factors into gradedetermining, non-grade-determining, or official

criteria, fixed percentages could be established

for certain factors that transcend all grades (e.g.,

maximum level of dockage in wheat or maximum moisture levels in corn and soybeans).

Limits for current factors (e.g., stones or live

insects) could also be tightened.

Making no change to variety control systems

or market intervention has a dramatic impact

on grain standards, however, in that they must

be able to address the buyer’s desire for information on important intrinsic characteristics

and take the lead in establishing signals regarding quality for the entire system. At the moment,

technology to measure intrinsic attributes easily in the marketplace is not available. If standards are to be the vehicle for providing information on intrinsic and many new sanitary

quality characteristics (e.g., pesticide residue),

resources must be provided to develop the technologies needed to measure them accurately and

easily before the market can respond. It will take

many years to research and develop new tests

that could be put on-line before signals begin

to be transmitted back through the system.

In addition to identifying what factors the

standards should measure and whether factors

are grade-determining, non-grade-determining,

or official criteria, the way the standards are

implemented can also have a dramatic impact

on grain quality. One of the major problems facing the United States in terms of grain quality—

whether physical, sanitary, or intrinsic—is that

all grain, no matter the quality, is accepted into

the system and marketed. This places enormous

strain on the system’s handling and inspection

capabilities and is the cause of most of the

blending controversies.

Conclusions

The production and marketing of grain in the

United States is a highly interdependent system of activities. Any policy designed to enhance grain quality—physical, sanitary, or

intrinsic—must address this interdependence.

Traditional policy discussions, however, have

focused on only one component—grain standards. But a properly functioning market can

solve many grain quality problems. Therefore,

a fundamental policy alternative would be one

that creates an environment that would improve market efficiency. In addition, appropriate quality information must be provided so that

relevant incentives and disincentives can be

established to improve market efficiency.

Evaluating policy options in terms of their

strengths and weaknesses as well as their interdependence is a complex task. One possible

policy path that maximizes the strengths of the

various options as well as minimizes their weaknesses is to adopt variety identification/

categorization, increase the differentials in loan

policy and specify minimum quality for farm

loans, and introduce mandatory USGSA inspection in conjunction with NIST equipment approval.

Introducing a variety identification scheme

would improve information on intrinsic quality characteristics, thus reducing the pressure

on grain standards to measure intrinsic performance in the market. For most grains, variety indicates quality better than selected tests

do. The increased information resulting from

variety identification would raise the efficiency

of the market, resulting in incentives/disincentives being transmitted to producers, breeders,

handlers, and end users. Variety identification

alone, however, does not address physical or

sanitary quality concerns, which must be tackled in other areas.

88-378 - 89 - 2
Removing the distortion created by the current administration of premiums and discounts

for loan forfeitures and applying the same rules

to country and terminal elevators storing government grain would allow the market—which

has already established premiums and discounts—to function properly. Grain of lower

value would be forced onto the market as opposed to entering government programs. To the

extent that intrinsic quality characteristics are

included, variety development would be affected. Signals from government programs

would be directly transmitted to farmers that

would affect their decisions on varieties

planted, thus influencing breeders’ objectives

and release criteria.

Setting minimum quality specifications for

loans places an additional constraint on entry

into the loan program. These could easily be

applied to physical and sanitary quality characteristics as well as measurable intrinsic characteristics and, along with the variety identification scheme, would reinforce signals being

transmitted throughout the system. Farmers

would be required to obtain testing of grain that

was going into the loan program and being

stored on farm, rather that self-certifying quality as is presently the case.

Implementing such policies on government

programs and minimum quality specifications

could force lower quality grain into the export

market. Therefore, minimum quality specifications established for entry into government programs could be applied to grain entering export

elevators. This would transmit signals for improved quality throughout the system and

would reduce the spread of qualities available

for blending at export locations.

The need for accurate measurement of important characteristics—whether physical, sanitary, or intrinsic—is crucial to providing information for the market to function properly. The

vehicle by which quality information is transmitted throughout the system is grain standards. Incentives and disincentives cannot be

established unless accurate, consistent, and

timely information is provided in the market.

This can be accomplished by continued efforts

to incorporate the four objectives of grain standards, by implementing mandatory inspection,

and by increasing NIST involvement in approving grain sampling and testing equipment.

Mandatory inspection of railcars and barges

would ensure that consistent sampling and testing were performed. Used in conjunction with

minimum quality specifications on grain entering export elevators, this would ensure that

one government agency was responsible for

testing quality. The increased presence of NIST

in approving grain sampling and testing equipment would ensure that all parties testing grain

quality used approved equipment and followed

basic user requirements.

Grain quality is a function of the variety

planted, farmer practices, environment and geographic location, handling practices, end-user

preferences, marketing, government policies,

and the ability of grain standards to provide

information on important quality characteristics. Present policy does not recognize the interrelatedness of these factors. Policy changes,

therefore, must create an integrated policy for

enhancing grain quality.
Chapter 2

An Overview of

the U.S. Grain System
CONTENTS

Grain Production. . . . . . . . . . . . . . . . . . . . . . . .

Wheat . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Corn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Soybeans . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Utilization . . . . . . 

Wheat. ....... . . . . . . . . . . . . . . . . . . . . . ..

Corn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Soybeans . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Export Markets. . . . . . . . . . . . . . . . . . . . . . . .

Grain Flow.... . . . . . . . . . . . . . . . . . . . . . . . . .

Storage and Handling. . . . . . . . . . . . . . . . . . . .

Marketing of Grain . . . . . . . . . . . . . . . . . . . . . .

Government Farm Policy . . . . . . . . . . . . . . . . .

Loan Program. . . . . . . . . . . . . . . . . . . . . . . . .

Deficiency Payment/Target Price Program

Quality Control. . . . . . . . ~...... .

Quality as an Issue . . . . . . . . . . . . .

Chapter preferences . . . . . . . . . . .

,...., . . .

. ● ☛

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● ...,,. 0

.,...,. .*..*.., ...,.,.. . . . .

. . . . . . .*..,.* ..,.*.. ....,, *

,...,. ● ,,*.*. ....,** .**... .

.*...., .*..,.,, . . . . . . . . .., 0

,...,. ● . . . . . . .,**,., . . . . . . .

,..,... . . . . ● **.... . . . . . . . . ●

● O

. . . . . . . ....*,*. ....,.., ● * . .

.,...** . . . . . . . . ● ,*..... . . . .

,,..... .*.,*.*. . . . . . . . . ,., .

...*,, ,,,.... . . . . . . . ..*,*. .

Figure

2-1. U.S. Share of World Wheat, Corn, and Soybean Production,

2-2.

2-3.

2-4.

2-5.

2-6.

Page

U.S. Export Market Shares in Wheat, Corn, and Soybeans,

1970-88, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Wheat-Producing Areas of the United States . . . . . . . . . . . . . . . . . . . . . . . . 

Grain Flow From Farm to Final Destination.. . . . . . . . . . . . . . . . . . . . . . . 37

Flow of Grain Through the Country Elevator . . . . . . . . . . . . . . . . . . . . . . . 39

Flow of Grain Through the Export Elevator . . . . . . . . . . . . . . . . . . . . . . . . 40

Table Page

2-1. U.S. Wheat, Corn, and Soybean Production,

2-2. U.S. Utilization of Wheat by Type of Use, 1971.88 . . . . . . . . . . . . . . . . . .

2-3. U.S. Utilization of Corn by Type of Use, 1971-88 . . . . . . . . . . . . . . . . . . . .

2-4. U.S. Utilization of Soybeans by Type of Use, 1971-88 . . . . . . . . . . . . . . . .

2-5. Distribution of U.S. Wheat Exports by Destination,

1970-86, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2-6. Distribution of U.S. Corn Exports by Destination,

1970-86 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2-7. Distribution of U.S. Soybean Exports by Destination,

1970-86 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2-8. Quantity of Grain Hauled by Rail and Barges, 1974-85 . . . . . . . . . . . . . . .
Chapter 2

An Overview of the U.S. Grain System

The United States grain industry has many

characteristics that make it a formidable competitor in world markets. First, it has the capability to meet almost any demand. During the

1970s, when conditions caused a dramatic increase in demand, the Nation showed it had

the productive and distributional capability to

meet that demand. Second, the United States

can produce almost any type of grain. Of the

ducer of wheat (figure 2-I). Third, a buyer can

purchase nearly any type of grain at any time

of the year from the United States. For many

other countries this is not possible. Fourth, the

Nation has the capability to move grain from

farm to terminal to overseas buyer very efficiently. This is because of the extensive interstate highway system, rail system, and waterways. In addition, its high-volume, high-speed

major grains, it is the world’s largest producer elevator facilities—both inland and export—

of corn and soybeans and the fourth largest pro- are as efficient as any in the world.

Figure 2-1. -U.S. Share of World Wheat, Corn, and Soybean Production, 1970-88 (percentage)

90

80

70

40

30

20

10

0

.

SOURCES:

1 197&s3: s Evans, “wheat: Background for 1965 Farm Legislation,” Agriculture Information Bulletin No 467, U S Department of Agriculture (USDA), Economic Research

service (ERS), Washington, DC, 1964,

1984-88: USDA, Foreign Agricultural service (FAS), “World Gram Sltuatlon and Outlook,” Circular series FG 10-88, Washington, DC, October 1966

2 197H1: USDA, ERS, ‘mm, Background for 1965 Farm Le?yslatlon,” Information Bulletln No 471, Washington, DC 1964,

1982-88: USDA, FAS, ‘World Grain Situation and Outlook,” Circular Series FG 10 66, Washington, DC, October 1966

3 lg70_81: USDA, ERS, ‘Soytxans, Background for 1965 Farm Lewlahon,’” Agriculture Information Bulletin No 472, Washington, DC, 1964,

1982-88: USDA, FAS, “World OIlseed Sltuatlon and Market Hlghltghts,” Circular Series FOP 10-66, Washington, DC, October 1966

4 As of October 1966

29
30

Notwithstanding all these strengths, the ability of the United States to compete in world

markets has been called into question recently.

Such a question would have seemed absurd 10

years ago when the value and volume of U.S.

grain and oilseed exports increased enormously. The U.S. share of world markets

seemed secure (figure 2-2); the value of agricultural exports more than doubled in real

terms between 1970 and 1980, with the real

value of U.S. grain exports more than tripling.

Agricultural exports were considered the bright

spot in the generally poor U.S. trade performance across all economic sectors. In 1981, however, wheat, corn, and soybean exports fell

sharply while slow but consistent growth in imports of a large variety of agricultural products

continued unabated. By 1986, the Nation’s export and net trade position had almost returned

to 1970 levels. The U.S. agriculture industry

confronted the possibility that it might face the

kind of trade problems that had plagued the

steel, automobile, and semiconductor industries. One congressional attempt to respond to

this situation was the Grain Quality Improvement Act of 1986.

A number of factors have been listed by trade

experts as causing the decline in agricultural

exports, including global recession, the strong

U.S. dollar, high price-support levels, European

Economic Community restrictions, and increased world productive capacity. However,

another factor emerging is grain quality and

Figure 2-2. -U.S. Export Market Shares In Wheat, Corn, and Soybeans, 1970-88 (percentage)

SOURCES:

1 t97~: s Evans, wheat: ~ckgmund for lg&j Farm Lagislati~n,” A9rI~u~um Information Bulletin No 467, IJ S @pafiment of Agriculture (USDA), Economic Research

ServIca (ERS), Washington, DC, 1964;

1984-U: USDA, Foretgn Agricultural Service (FAS), “World Gram Situation and Outlook,” Cwcular series FG 10-66, Washington, DC, October 1966

2 197H1: USDA, ERS, “corn, ~ckgmund for 1= Farm Legislation,” information 8ulletin NO 471, Washington, ~ 19S4;

1942-U: USDA, FAS, “World Grain Situation and Outlook,” Circular Series FG 10-66, Washington, DC, October 1966

3 197~1: USDA, ERS, ,-~y~an~, ~ckgfound for l= Farm Legi$Jat~n,” Agricu~ure Information Bulletin NO 472, Washington, m, 1964 ;

1SS248: USDA, FAS, “World Oilsead Situation and Market Highlights,” Cwcular Series FOP 10-66, Washington, DC, October 1966

4 As of October 1966
31

its use as a competitive tool in international

markets. The factors listed above are considered the major contributors to the decline in

world market share. But as the dollar weakens

and lower price-support levels take effect, allowing U.S. exports to become more price-competitive, opportunities to increase exports may

be hampered by foreign buyers’ concerns about

U.S. grain quality.

Importers of U.S. grain have become more

vocal in their concern about quality. Formal

complaints made by buyers to the U.S. Department of Agriculture (USDA) have increased

yearly. In 1987 over 60 complaints concerning

quality were received at USDA. This number

is a conservative estimate of the true concern

since the amount of paperwork involved discourages the filing of complaints. Examples of

specific complaints include: excessive amounts

of material other than grain in the shipment;

quality attributes, such as wheat protein, not

meeting contract specifications; grain (mainly

corn and soybeans) arriving out of condition,

e.g., moldy or infested; and grain arriving in

a broken or cracked condition.

This report focuses on the enhancement of

grain quality, To put that issue in perspective,

it is important to understand how the U.S. grain

system operates. The following sections provide an overview of grain production, end uses,

export markets, grain flow, Government programs, and quality control, which are described

in the rest of this assessment. The chapter ends

with a discussion of the quality issue and a definition of quality.

GRAIN PRODUCTION

Production trends in the United States from

1971 to 1986 are shown in table 2-1. Annual

wheat production averaged 1.7 billion bushels

during the first 4 years of this period. By 1979,

yearly production had increased to 2.1 billion

bushels, and it peaked at 2.8 billion bushels by

1981. Overall, wheat production has increased

29 percent since 1971.

From 1971 to 1975, corn production averaged

5.5 billion bushels per year. Production increased to 7.9 billion bushels by 1979. In 1983,

corn production was drastically reduced as a

result of the payment-in-kind program. But in

1985, it peaked at 8.9 billion bushels. However,

in 1988 corn production dropped to only 4.5

billion bushels because of the severe drought.

Corn production overall has increased 46 percent since 1971.

Yearly soybean production averaged 1.3 billion bushels per year during the years 1971 to

1976; output peaked at 2.3 billion bushels in

1979, and stayed around 2.0 billion bushels by

1986. But it was reduced to 1.5 billion bushels

in 1988 because of the drought. Overall, soybean production has increased 71 percent since

1971.

Table 2-1.—U.S. Wheat, Corn, and Soybean

Production, 1971-88 (millions of bushels)

Year Wheat Soybeans Corn

1971 . .................1,618.6 1,176.1 5,641.0

1972 . .................1,546.2 1,270.6 5,573.0

1973 . .................1,170.8 1,547.5 5,647.0

1974 . . . . . . . . . . . . ......1,781.9 1,216.3 4,701.4

1975 . .................2,126.9 1,547.4 5,829.0

1976 . . . . . . . ...........2,148.8 1,287.6 6,266.4

1977 . .................2,045.0 1,767.0 6,425.5

1978 . . . . . . . . . . . . ......1,775.5 1,869.0 7,081.8

1979 . . . . . . . ...........2,134.1 2,268,0 7,938.8

1980 . .................2,380.9 1,798.0 6,644.8

1981 . .................2,785.4 1,989.0 8,201.6

1982 . .................2,765.0 2,190.0 8,235.1

1983 . .................2,419.8 1,636.0 4,174.7

1984 . .................2,594.8 1,861.0 7,674.0

1985 . .................2,425.1 2,099.0 8,876.7

1986 . .................2,086.8 1,940.0 8,252.8

1987 . .................2,105.0 1,905.0 7,064.0

1988* . ................1,821 .0 1,472.0 4,462.0

‘Preliminary

SOURCE U S. Department of Agriculture, “Crop Producflon, ” Agricultural

SIatlstlcs Board, National Agricultural Statistics Serv!ce CrPr 2-2,

Washington, DC, various issues.

Figure 2-3 shows the general areas where

various wheat types are grown. Forty-two States

produce various wheat types. However, almost

42 percent is produced in just five States:
32

Figure 2-3. --Wheat-Producing Areas of the United States

Soft Red Winter

White

Hard Red Winter

Where different kinds

of wheat are grown in the

United States

The map indicates the general areas in

which the various kinds of wheat are grown.

The classes of wheat grown in an area are

determined by climate, soil, rainfall, and

irrigation.

Durum

SOURCE: Wheat Flour Institute, “From Wheat to Flour,” revised cd., WaShln@On, DC, 19S1.

Kansas, Oklahoma, Texas, Nebraska, and Col- is grown mainly in North Dakota and Montana,

orado. These five produce Hard Red Winter White wheat is grown mainly in the Pacific

wheat—the major type grown in the United Northwest, and Soft Red Winter wheat is grown

States. from Missouri to Ohio and in the Atlantic

States.

About one-fourth of the wheat produced in

the United States is grown in North and South

Dakota, Minnesota, and Montana. These States

produce Hard Red Spring wheat. Of the sev- Corn is produced in 47 States. The six Corn

eral other wheat types produced, Durum wheat Belt States—Iowa, Illinois, Indiana, Nebraska,
33

Minnesota, and Ohio—produced about 70 percent of the 1985 corn crop. Historically these

six have been the dominant corn-producing

States. Corn production in recent years, however, has increased in other parts of the country. This has been the result of new, shortseason hybrid seed corn that has increased

yields in Northern States like North Dakota and

New York, and of Government programs that

have made corn production profitable in States

with relatively high production costs.

Soybeans

Soybeans are produced in 29 States. Six account for almost two-thirds of the output: Illinois, Iowa, Indiana, Missouri, Ohio, and Minnesota. In fact, Illinois and Iowa accounted for

33 percent of the total 1985 crop and were the

dominant producers.

UTILIZATION

Each grain has multiple uses and is important in world markets. In this section the various uses of each will be discussed as well as

the magnitude of the dependence on export

markets.

Wheat is used for domestic food consumption, export, animal feed, and seed (table 2-2).

The proportion used for domestic purposes has

fluctuated between 32 and 53 percent over the

past 15 years. Wheat is very dependent on the

export market. The export market has grown

since 1971, and by the early 1980s as much as

68 percent of U.S. wheat was exported. The export market share has declined since then to

less than 50 percent of total wheat use.

Almost all wheat, other than that fed directly

to livestock, is milled into flour for producing

a variety of bakery products for human consumption. Wheat is unique in that it is the only

cereal grain with sufficient gluten content to

make a loaf of bread without being mixed with

another grain.

Corn

The major use for corn is domestic animal

feed, accounting for well over half the corn conTable 2-2.— U.S. Utilization of Wheat by Type of Use, 1971-88 (million bushels and percentage)a

Domestic

Animal Total share

Year Food Seed feed domestic (percent) Exports

1971-72 . . . . . . . . . . . . . . . . . . . . 523.7 63.2 262.4 849.3 58.2 609.8

1972 -73 . . . . . . . . . . . . . . ......531.8 67.4 199.8 799.0 41.3 1,135.0

1973 -74 . . . . . . . . . . . . . . ......544.3 84.1 125.1 753.5 56.1 1,217.0

1974 -75 . . . . . . . . . . . . . . ......545.0 92.0 34.9 671.9 39.7 1,018,5

1975 -76...., . ..............588.6 99.0 38.3 725.9 38.2 1,172.9

1976 -77 . . . . . . . . . . . . . . ......588.0 92.0 74.4 754.4 44.2 949.5

1977 -78 . . . . . . . . . . . . . . ......586.5 80.0 192.5 859.0 43.3 1,123,9

1978-79 . . . . . . . . . . . . . . ......592.4 87.0 157.6 837.0 41.2 1,194,1

1979-80 . . . . . . . . . . . . . . ......596.1 101.0 86.0 783.1 36.2 1,375,2

1980 -81 . . . . . . . . . . . . . . ......610.5 113.0 59.0 782.5 34.1 1,513,8

1981 -82 . . . . . . . . . . . . . . ......602.4 110.0 134.8 847.2 32.4 1,770.7

1982 -83 . . . . . . . . . . . . . . ......616.4 97.0 194.8 908.2 37.6 1,508,7

1983-84 . . . . . . . . . . . . . . ......642.6 100.0 369.1 1,111.7 43.8 1,428.6

1984 -85 . . . . . . . . . . . . . . ......651.0 98.0 404.5 1,153.5 44.7 1,424.1

1985-86 . . . . . . . . . . . . . . ......678.1 93.0 273.5 1,044,6 53.3 915.4

1986 -87...., . ..............696.0 84.0 413.3 1,193,3 54.3 1,003,5

1987-8 8

b . ..................719.0 85.0 280.1 1,084.2 40.5 1,592.1

~Differences between utilization and production are attributable to imports

Preliminary

SOURCE U S Department of Agriculture, “Wheat Sltuatlon and Outlook Report, ” Economic Research Service, Washington, DC various Issues

Export

share

(percent)

41.8

58.7

43.9

60.3

61.8

55.8

56.7

58.8

63.8

65.9

67.6

62.4

56.2

55.3

46.7

45.7

59.5
34

sumed in the United States (table 2-3). Feed use

has fluctuated with prices and livestock inventory. Other domestic uses include food/industrial use and seed. Industrial use has shown

steady growth since 1971. Total domestic corn

usage has accounted for 70 to 85 percent of

usage over the past 15 years. Corn is not as dependent as wheat on world markets, but as

much as 30 percent of total usage is exported

in some years.

Feed grains, which include corn, are characterized as high-energy grains due to their relatively high levels of nitrogen-free extract (principally starch) and low levels of crude fiber (4).

Nearly all feed grains are highly palatable to

livestock. Corn is the leader in the amount of

energy contained. However, several byproducts

from corn used by food manufacturers are also

available for animal feed. These include such

products as corn gluten feed and meal, Brewer’s

dried grains, and distiller’s dried grains.

Corn is prepared for human consumption and

industrial use by dry and wet mill processing.

Dry milling is the process by which corn is separated into components of hulls, germs, and

endosperm. Two processes are used: tempering-degerming and alkaline dry milling. These

produce flaking grits for breakfast cereals, baking, and the snack food industries.

More than half the corn starch manufactured

from the wet milling process is converted into

corn syrups and corn sugar. Corn starches and

sugars are used for human foods, beverages,

industrial products, and livestock feeds. Corn

syrup is used in human foods, beverages, and

industrial products. Crude corn oil, which is

extracted during starch recovery, is used for

human food, industrial products, and animal

feed. The water used to soak the corn, commonly referred to as steepwater, is used in pharmaceuticals and liquid animal feed.

Soybeans

Soybeans are processed for domestic food

and feed consumption, used for seed, and exported. Domestic processing is the most important use of soybeans and has increased steadily over the past 15 years (table 2-4). Domestic

soybean utilization has accounted for approximately 60 percent of total usage, while the export market has accounted for about percent.

Soybeans are primarily used for oil extraction. The residuals from this process are toasted

and ground into a high-protein meal for use as

a supplement in animal feed. Other soybean

uses include lecithin, soy flour, and soy grits.

Soybean meal usage, like corn, has increased

Table 2-3.—U.S. Utilization of Corn by Type of Use, 1971-88 (million bushels and percentage)a

Food,

alcohol, and

Year industrial Seed

Animal

feed

Total

domestic

1971 -72 . . . . . . . . . . . . . . . .

1972-73 . . . . . . . . . . . . . . . .

1973-74 . . . . . . . . . . . . . . . .

1974 -75 . . . . . . . . . . . . . . . .

1975-76 . . . . . . . . . . . . . . . .

1976-77 . . . . . . . . . . . . . . . .

1977 -78. . . . . . . . . . . . . . . .

1978-79 . . . . . . . . . . . . . . . .

1979-80 . . . . . . . . . . . . . . . .

1980-81 . . . . . . . . . . . . . . . .

1981 -82 . . . . . . . . . . . . . . . .

1982-83 . . . . . . . . . . . . . . . .

1983-84 . . . . . . . . . . . . . . . .

1984 -85. . . . . . . . . . . . . . . .

1985-86 . . . . . . . . . . . . . . . .

1986-87 . . . . . . . . . . . . . . . .

1987 -88 . . . . . . . . . . . . . . . .

394.0

407.0

417.0

432.6

469.9

493.3

532.9

557.0

655.1

715.1

792.1

880.3

956.0

1,070.0

1,140.0

1,175.0

1,207.0

15.0

16.0

18.0

18.8

20.2

19.8

18.0

18.0

20.0

20.2

19.4

14.5

19,1

21.2

19.5

16.7

17.0

3,978.0

4,310.0

4,265.0

3,225.6

3,591.6

3,586.6

3,709.5

4,198.1

4,518.6

4,139.0

4,276.0

4,520.7

3,817.6

4,079.0

4,095.3

4,713.7

4,649.7

4,387

4,733

4,700

3,677

4,081.7

4,099.7

4,260.4

4,773.1

5,193.7

4,874.3

5,087.5

5,415.5

4,792.7

5,170.2

5,254.8

5,905.4

5,873.7

Domestic

share

(percent)

84.8

79.2

79.8

76.2

70.5

70.9

68.6

69.1

68.1

67.4

72.1

74.7

71.6

73.5

80.9

79.7

77.3

Exports

Export

share

(percent)

786.0

1,243.0

1,188.0

1,148.5

1,711.4

1,684.2

1,947.8

2,133.1

2,432.6

2,355.2

1,966.9

1,833.8

1,901.5

1,865.4

1,241.2

1,504.4

1,725.0

15.2

20.8

20,2

23.8

29.5

29.1

31.4

30.9

31.9

32.6

27.9

25.3

28.4

26.5

19.1

20.3

22.7

aDifferences between utilization and production are attributable to imports.

SOURCE: U.S. Department of Agriculture, “Feed Situation and Outlook, ” Economic Research Service, Washington, DC, various issues
35

Table 2-4.—U.S. Utilization of Soybeans by Type of Use, 1971-88 (million bushels and percentage)a

Seed, Domestic Export

Domestic feed, and Total share share

Year processing residual domestic (percent) Exports (percent)

1971 . . . . . . . . . . . . . . . . . . . . . . 720 65 785 65.3 417 34.7

1972 . . . . . . . . . . . . . . . . . . . . . . 722 82 804 62.7 479 37,3

1973 . . . . . . . . . . . . . . . . . . . . . . 821 75 896 62.4 539 37.6

1974 . . . . . . . . . . . . . . . . . . . . . . 701 79 780 64.9 421 35.1

1975 . . . . . . . . . . . . . . . . . . . . . . 865 71 936 62.8 555 37.2

1976 . . . . . . . . . . . . . . . . . . . . . . 790 76 866 60.6 564 39.4

1977 . . . . . . . . . . . . . . . . . . . . . . 927 82 1,009 59.0 700 41.0

1978 . . . . . . . . . . . . . . . . . . . . . . 1,018 99 1,117 60.2 739 39.8

1979 . . . . . . . . . . . . . . . . . . . . . . 1,123 85 1,208 58.0 875 42.0

1980 . . . . . . . . . . . . . . . . . . . . . . 1,020 99 1,119 60.7 724 39.3

1981 . . . . . . . . . . . . . . . . . . . . . . 1,030 89 1,119 54.6 929 45.4

1982 . . . . . . . . . . . . . . . . . . . . . . 1,108 86 1,194 56.9 905 43.1

1983 . . . . . . . . . . . . . . . . . . . . . . 983 79 1,062 58.8 743 41.2

1984 . . . . . . . . . . . . . . . . . . . . . . 1,030 93 1,123 65.3 598 34.7

1985 . . . . . . . . . . . . . . . . . . . . . . 1,053 86 1,139 60.6 740 39.4

1986 . . . . . . . . . . . . . . . . . . . . . . 1,179 104 1,283 62.9 757 37.1

1987 . . . . . . . . . . . . . . . . . . . . . . 1,170 96 1,266 61.7 785 38.3

1988b . . . . . . . . . . . . . . . . . . . . . . 1,075 95 1,170 65.2 625 34.8

aDifferences between uttllzation and production are attributable to imports

‘Prellmlnary

SOURCE US Department of Agriculture, “Ofl Crops Situation and Outlook Report,” Economic Research Service, Washington, DC, various Issues

relative to livestock inventory. Overall, soybean

meal usage has increased 49 percent since 1970.

Export Markets

The United States is quite dependent on

world markets, which are constantly changing

in response to new relationships between

buyers and sellers.

Wheat exports increased dramatically in 1972

and from 1976 to 1982. Overall, wheat exports

increased about 190 percent during the decade

from 1971 to 1981 and have declined by almost

50 percent since then,

The markets for U.S. wheat have shifted over

time. The major importers in 1970 were India,

Western Hemisphere countries, Japan, the

European Community (EC), and South Korea

(table 2-5) By 1985, exports to India and the

EC had declined sharply. The major importers

were Western Hemisphere countries and Japan

(same markets) and the African countries (new

markets). During this time the Soviet Union

(U.S.S.R) was a sporadic buyer–but a large

one.

Corn exports increased dramatically from

1971 to 1981, During that time exports increased by 200 percent, but since then they have

declined by 47 percent. In 1970, the largest importers of U.S. corn were the EC and Japan (table 2-6). By 1985, the EC share had dropped to

10 percent and the largest importers were Japan and the U.S.S.R. Other areas that had

steady growth during this time were theWestern Hemisphere, the Middle East countries, and

South Korea.

The growth of soybean export markets followed the same path as wheat and corn. During the 1971-81 period, U.S. soybean exports

increased 123 percent. Since then exports have

declined by 25 percent. Compared with wheat

and corn, the decline in soybeans was the

smallest.

The major soybean markets have not changed

since 1970 (table 2-7). The largest importers

have been the EC and Japan, accounting for

approximately 65 percent of the U.S. soybean

export market. Taiwan, Eastern Europe, Israel,

and Western Hemisphere countries have been

steady importers, but imports by other West

European countries have been declining

throughout the period.
36

Table 2-5.—Distribution of U.S. Wheat Exports by Destination, 1970.86 (in percent)

Middle

Western East oilHemi- exporting South

Years sphere Europe countries USSR Japan Korea Pakistan India Africa China Other Total

1970 -71 . . . . . . . . . 17.4

1971 -72 . . . . . . . . . 13.7

1972-73 . . . . . . . . . 19.1

1973-74 . . . . . . . . . 14.5

1974 -75 ..,...... 19.3

1975-76 . . . . . . . . . 14.9

1976-77 . . . . . . . . . 17.4

1977 -78 . . . . . . . . . 13.2

1978-79 . . . . . . . . . 19.6

1979-80 . . . . . . . . . 17.3

1980 -81 . . . . . . . . . 20.0

1981 -82 . . . . . . . . . 20.2

1982-83 . . . . . . . . . 18.1

1983-84 . . . . . . . . . 17.6

1984-85 .......,. 17.5

1985-86 . . . . . . . . . 23.7

11.3

23.7

12.7

13.1

10.9

10,4

16.0

12.8

15.0

14.4

19.3

10.2

9.1

4.4

5.6

5.9

0.1 0 14.0

2.0 0 15.6

4.6 0 13.4

2.1 30.6 10.9

4.4 9.2 10.3

7.6 3.6 12.0

1.7 12.3 10.2

8.4 10.8 11.4

6.7 10.7 11.6

5.2 9.0 10.2

1.8 6.2 9.5

3.3 5.0 8.5

1.6 13.2 7.4

2.7 8.7 9.5

2.7 18.1 8.2

2.0 9.6 11.2—

10.0

9.0

9.2

5.2

5.5

5.9

4.5

7.4

5.7

5.0

5.0

4.9

4,2

5.4

4.8

6.4

6.1 15.6 7.0

3.5 7.4 8.0

5.9 5.8 11.7

3.6 1.2 5.6

1.8 5.5 11.5

3.3 14.3 10.7

2.1 15.5 10.7

0.7 9.1 16.4

2.0 1.0 17.4

3.8 0.1 14.9

0.6 0.8 13.0

0.4 1.2 13.1

0.5 2.7 13.5

0.5 9.6 14.8

0.3 2.7 16.2

1.4 0.1 18.9

0

0

0.5

7.9

9.0

0.5

0

0

3.0

7.7

11.2

18.4

18.3

10.2

10.6

4.6

18.5

17.1

17.1

5.3

12,6

16,8

9.6

9.8

7.3

12.4

12.6

14.8

11.4

16.6

13.3

16.2

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

SOURCE: U.S. Department of Agriculture, “Grain and Feed Market News,” Agricultural Marketing Service, Washington, DC, various issues

Table 2-6.—Distribution of U.S. Corn Exports by Destination, 1970.86 (in percent)

Middle

Western Other East oil

Hemi- European Western Eastern exporting South

Year sphere Community Europe Europe countries USSR Japan Korea China

1970-71 . . . . . . . . 4.7 58.6 - 0 7.4 0 10 26.0 2.0 0

1971-72 . . . . . . . . 2.9 42.3 3.4 6.9 0.1 11.8 13.8 2.7 0

1972-73 . . . . . . . . 6.5 33.8 7.0 6.3 0.1 12.9 18.0 1.4 4.0

1973-74 . . . . . . . . 9.9 31.8 7.5 5.4 0.1 13.2 20.0 1.2 4.2

1974-75 . . . . . . . . 10.1 40.7 10.3 10.9 0.5 4.1 17.5 1.4 0

1975-76 . . . . . . . . 5.8 30.0 7.6 11.1 0.2 24.8 13.6 1.4 0

1976-77 . . . . . . . . 5.0 43.3 5.9 11.5 0.5 10.0 16,5 2.2 0

1977-78 . . . . . . . . 6.9 27.3 8.1 10.1 0.6 20.5 17.2 3.6 0

1978-79 . . . . . . . . 7.9 24.7 6.3 11.0 0.6 16.1 16.8 5.9 5.4

1979-80 . . . . . . . . 13.3 21.3 8.8 12.0 0.4 9.5 18.3 3.5 2.9

1980-81 . . . . . . . . 16.9 18.0 9.6 11.8 0.2 8.0 22.2 3.9 1.2

1981-82 . . . . . . . . 10.3 15.7 13.0 6.5 0.1 14.5 21.5 5.1 2.6

1982-83 . . . . . . . . 13.6 20.1 0.2 2.9 0.3 7.0 28.5 8.9 4.6

1983-84 . . . . . . . . 11.0 17.5 0.1 1.3 0.9 13.8 30.1 6.2 0

1984-85 . . . . . . . . 6.3 13.1 0.1 1.6 1.2 32.7 23.1 2.8 0

1985-86 . . . . . . . . 11.2 10.1 0 3.1 1.8 21.4 29.9 4.4 0

SOURCE’ US. Department of Agriculture, “Grain and Feed Market News:’ Agricultural Marketing Service, Washington, DC, various issues

Other

1.2

16.1

10.0

6.7

4.7

5.5

5.1

5.7

5.3

10.0

8.2

10.7

13.9

19.1

19.2

18.1

Total

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

GRAIN

The major tasks of the United States grain

industry are to assemble grain from farmers,

combine it in their facilities according to quality differentiations, store it until it is sold, and

transport it by the most cost-effective means

to the final market destination.

Farmers transport grain from the farm in

farm-tractor wagons or trucks to country eleFLOW

vators, subterminal or terminal elevators, export elevators, or domestic processors (figure

2-4). From some locations, farmers can deliver

grain directly to Canada from the farm by truck,

Domestic processors and export elevators can

receive grain straight from farmers who are located within the general vicinity. When sufficient quantities cannot be supplied by local
37

Table 2.7.–Distribution of U.S. Soybean Exports by Destination, 1970.86 (in percent)

Other

Western European Western Eastern

Years Hemisphere Community Europe Europe Japan Israel Taiwan Other Total

1970-71 . . . . . . . . . . . . . . . . . . . . 10.3

1971-72 . . . . . . . . . . . . . . . . . . . . 8.0

1972-73 . . . . . . . . . . . . . . . . . . . . 5.8

1973-74 . . . . . . . . . . . . . . . . . . . . 10.1

1974-75 . . . . . . . . . . . . . . . . . . . . 7.5

1975-76 . . . . . . . . . . . . . . . . . . . . 5.5

1976-77 . . . . . . . . . . . . . . . . . . . . 7.8

1977-78 . . . . . . . . . . . . . . . . . . . . 7.3

1978-79 . . . . . . . . . . . . . . . . . . . . 5.8

1979-80 . . . . . . . . . . . . . . . . . . . . 5.5

1980-81 . . . . . . . . . . . . . . . . . . . . 9.3

1981-82 . . . . . . . . . . . . . . . . . . . . 6.2

1982-83 . . . . . . . . . . . . . . . . . . . . 8.2

1983-84 . . . . . . . . . . . . . . . . . . . . 9.0

1984-85 . . . . . . . . . . . . . . . . . . . . 10.5

1985-86 . . . . . . . . . . . . . . . . . . . . 6.7

43.4

42.1

44.8

46.9

44.1

47.8

46.1

47.1

42.2

46.0

43.6

46.8

56.0

46.5

44.1

44.1

11.8

11.9

8.6

10.4

13.2

7.9

6.1

3.9

6.6

10.3

9.1

14.1

1.2

1.1

0.9

0.6

1.4

0.6

1.3

0.9

1.2

0.3

0.4

4.0

0.4

5.7

4.1

1.7

2.4

3.3

2.3

2.5

24.2 2.8

23.8 2.9

25.3 2.5

20,9 2.6

22.7 3.5

21.5 2.5

20.2 2.6

20.1 2.1

19.2 1.9

17.0 1.8

19.7 1.8

16.2 1.7

20.5 1.8

22.8 2.8

24.8 2.5

21.8 1.9

4.7 1.4 100

5.4 5.3 100

4.1 7.6 100

3.8 4.4 100

6.6 1.2 100

5.2 9.3 100

4.8 12.0 100

4.9 10.6 100

5.8 18.1 100

3.1 10.6 100

5.2 7,2 100

4,6 8.7 100

4.9 5.0 100

6.5 8.0 100

7.8 7.1 100

7.5 14.9 100

SOURCE: US Department of Agriculture, “Grain and Feed Market News,” Agricultural Marketing Service, Washington, DC, various issues

Figure 2-4. –Grain Flow From Farm to Final Destination

Processor

Farm

1

elevator

River Port

elevator elevator

Overseas

processor

SOURCE: US Department of Agriculture, “The Phywcal Dcstnbutlon System for Gram,” Office of Transportation, Agriculture Information Bulletin No 457, Washington, DC,

October 1983
38

farmers, domestic processors and export elevators obtain grain from other sources. This

is accomplished by a system of country, subterminal, and terminal elevators used to collect, store, and move grain through the system

to its ultimate destination.

In many cases, grain destined for export is

delivered by the farmer to the country elevator, unloaded and stored, loaded, and delivered

to a subterminal elevator. Here again the grain

is unloaded and stored. At subterminal elevators, it can be loaded and shipped to export elevators or terminal elevators. If subterminal elevators do not deliver the grain to its final

destination, then it is delivered to a terminal

elevator, unloaded, stored, and reloaded for

shipment to a port. Once grain is received at

an export elevator, it is unloaded and loaded

onto the vessel for shipment to the importing

country within a very short period of time. At

export elevators the emphasis is on throughput capacity with minimal storage. At interior

elevators the reverse is true, with the emphasis being on increased storage capacity and reduced handling capacity.

Grain moves by truck, railroad, barge, or ship

or any combination of these modes as it makes

its way from the farm to its final destination.

The reported quantities of grain moved by railroads and barges is shown in table 2-8. The

share by rail ranged from a high of 80.3 percent in 1974 to a low of 66 percent in 1982.

Barge shares tend to rise and fall as exports increase or decrease, primarily because almost

all grain moving by barge is destined for export ports in the New Orleans area. The rail

share of grain moving to export ports declined

from 62 percent in 1974 to 38 percent in 1983

(l). Except for the relatively small amount of

grain moving into Canada by truck and into

Mexico by rail, ocean vessels carry almost all

exported grain.

Table 2.8.–Quantity of Grain Hauled by

Rail and Barges, 1974.85

Quantity moved Share moved

(billion bushels) (percent)

Year Rail Barges Rail Barges

1974..............4.2 1

1975..............4.0 6

1976..............4.1 0

1977..............3.9 1

1978..............4.1 2

1979..............4.4 1

1980..............5.0 0

1981..............4.3 8

1982..............4.2 2

1983..............4.7 2

1984..............4.8 1

1985..............3.9 9

1.03

1.20

1.61

1.52

1.63

1.62

1.91

1.99

2.18

2.11

1.97

1.67

80.3

77.3

71.8

72.0

71.7

73.1

72.4

68.8

66.0

69.1

70.9

70.5

19.7

22.7

28.2

28.0

28.3

26.9

27.6

31.2

34.0

30.9

29.1

29.5

SOURCE Association of American Railroads, The Grain Book 1986 (Washington,

DC: 1987)

STORAGE AND HANDLING

Grain handling and storage systems have types of equipment, size, capacity, and configdeveloped over the years to provide an eco- uration.

nomical means of moving grain into storage,

preserving its quality while in storage, and unloading it from storage. The total U.S. grain stor- The basic storage types can be categorized

age capacity in 1987 was 23 billion bushels (5), as upright metal bins or concrete silos, flat

of which 14 billion bushels was on-farm stor- warehouses (buildings), and on-ground (piles),

Upright bins and concrete silos are the most age and 9 billion was considered off farm, easily managed type and can be found on farms

Regardless of whether storage and handling as well as in commercial facilities. They range

systems are constructed on farm or off, basic in size from farm bins as small as 3,000 bushels

types of equipment are being used. The only to over 500,000 bushels in commercial facilities.

differences are in the choice of the number and These storage types are loaded from the top and
39

easily unloaded from the bottom. In most instances, they can be equipped with aeration to

maintain cool grain temperatures, easily sealed

for fumigation when required, and, depending

on the number of bins available, unloaded and

turned if needed,

The recent demand for additional storage

space has increased the use of flat warehouses,

of on-ground piles placed on hard surfaces confined by movable sloping walls or circular rings,

and of several other forms of on-ground piling.

These storage types are more difficult to load,

unload, fumigate, and aerate than upright bins.

In the fall of 1986, approximately 300 million

bushels of grain were stored in piles, By the

summer of 1987 this volume had doubled, to

over 600 million. Most was corn and, to a lesser

extent, wheat (5).

Considerable interactions occur between

handling and storage technologies based on the

size and type of storage structures in use. Certain kinds of handling equipment are well suited

to high-speed, high-volume upright elevators;

others, to flat storage or to on-farm storage.

Various types of handling equipment are used

to move grain horizontally or vertically within

farm or commercial facilities. Figures 2-5 and

2-6 show basic flow diagrams of terminal and

export elevators. Country elevators could have

less equipment than shown in figure 2-5, and

export elevators may have cleaners on the outbound side. Therefore, these figures only provide basic configurations and should not be

taken as being representative of all grain elevators,

Figure 2-5.— Flow of Grain Through the Country Elevator

conveyor

Probe

sampler

SOURCE. U.S. Department of Agriculture,“The Physical Distribution System for Grain, ”Office of Transportation, Agriculture Information Bulletin No 457, Washington

DC, October 1983
40

I 9

\

SOURCE: U S Department of Agriculture, “The Physical Distribution System for Grain, ” Office of Transportation, Agriculture Information Bulletin No. 457, Washington,

DC, October 1983.

MARKETING OF GRAIN

A fundamental principle of the U.S. grain

marketing system is that of self-selection. Producers, handlers, and users all act in their own

best interests. Producers select varieties and

make other agronomic decisions with the objective of maximizing profit. Handlers assemble, condition, and deliver grain subject to negotiated contract terms with the objective of

maximizing profit. And users select among different qualities available, each with a different

end-use characteristic, also with the objective

of maximizing profit.

The market for quality characteristics is central to these decisions. Through this market,

price differentials develop that provide incentives and disincentives for participants throughout the system. An important aspect of this

process is that premiums and discounts, and

therefore incentives and disincentives, develop

for quality characteristics. Bargaining and contracting for quality specifications occurs

throughout the system, explicitly and implicitly,

between buyers and sellers. The premiums and

discounts built into contracts reflect value to

the participants.

From an operational perspective, farmers

typically sell and deliver grain to local country

elevators for a cash price. Farmers’ decisions

on whereto sell their grain are sometimes based

simply on selling to the closest elevator or the

one they have always sold to before. Since the

middle 1960s, however, farmers have increas-
ingly searched for bids at competing elevators

located as far as 40 or more miles away. They

subtract the cost of delivery from the bid price

at each elevator and then deliver to the one from

which they receive the highest net bid,

After buying from farmers, the country elevator manager, like many farmers, also decides

when and where to sell the grain to processors

or exporters based almost entirely on the highest available net bid. Typically, elevators will

switch shipments from one destination to another

for a fraction of a cent per bushel. In this highly

competitive setting, participants are almost certain to adopt innovations in technology, services, and transportation quickly. Gains that accrue to an innovator through cost-reducing

procedures soon become apparent to competing firms through changing prices and a shift

of grain away from their firm. This, in turn,

forces neighboring firms to adopt the innovation or accept a declining volume of business,

Country elevators typically hedge their grain

purchases from farmers by selling a futures contract for a similar quantity on the Chicago Board

of Trade. When country elevators sell their

grain directly or through a broker to grain processors, exporters, or cash merchandisers, the

country elevator “lifts” the hedge by buying

back a futures contract for a similar quantity

from the Chicago Board of Trade, The hedge

protects the elevator from the large price risks

associated with changes in international grain

supplies and demands. In exchange, the elevator receives the smaller price risk from the

“basis’ ’-that is, the difference between the

appropriate Board of Trade futures contract

price and the local price of grain. Almost all

participants in the grain trade—except speculators at the Chicago Board—hedge their purchases and sales in a similar manner.

The sales contract between the country elevator and the processor, exporter, or cash merchandiser typically specifies the terms of the

sale. Unless otherwise specified in the contract,

title and risk of loss or damage on domestic

sales pass to the buyer as follows:

●

●

on f.o.b. (free on board) contracts, at the

moment of acceptance of the appropriate

shipping document by the courier, and

on delivered contracts, when the shipment

is constructively placed or otherwise made

available at the buyer’s original destination

(2).

Thus, the buyer is responsible for loss or damage during transit on f.o.b. sales and the seller

is responsible for loss and damage during transit on delivered contracts.

Export sales are typically made directly between exporting firms and importing country

buyers. In centrally planned countries, the

buyer is a government agency; in most other

countries, the buyer is typically a merchandiser

or buying agency who buys grain and resells

it to end users in the importing country.

Most U.S. export sales are made under terms

specified in North American Export Grain

Association, Inc. (NAEGA) contract forms. Industry sources indicate that at least half of U.S.

grain export sales are made under terms specified in the NAEGA f.o.b. contract, This contract specifies that:

2.

the quality and condition to be final at port

of loading in accordance with official inspection certificates,

seller shall retain title to the commodity

until seller has been paid in full, it being

understood that risk of loss shall pass to

buyer at discharge end of loading spout (3).

Therefore, the seller retains title of the grain

until paid, but the buyer assumes all risk once

the grain leaves the discharge end of the loading spout at the export elevator.
42

G0VERNMENT FARM POLICY

The main purpose of government farm policy is to support farm incomes. Several different policies and program mechanisms have

been used over time to achieve this. The two

main programs are the loan rate and deficiency

payment/target price.

Loan Program

The Commodity Credit Corporation (CCC)

makes nonrecourse loans to farmers at established loan rates for a variety of crops, including corn, wheat, and soybeans. The loan, plus

interest and storage, can be repaid within 9 to

12 months and the commodity sold on the cash

market. If it is not profitable for the farmer to

repay the loan, CCC has no recourse but to accept the commodity in full payment of the loan.

Commodity loans are frequently referred to as

a price support, since national season-average

prices generally do not fall below set loan levels.

ing CCC stocks when prices are high and withdrawing them when prices are low. A second

objective is to encourage orderly marketing of

commodities throughout the year by preventing a glut at harvest.

Deficiency Payment/Target Price

In the United States, deficiency payments are

paid to farmers to make up the difference between a price determined to be a politically

acceptable income level (target price) and the

higher of the average market price or the loan

rate. Deficiency payments are made on each

farm’s actual planted acres and farm program

yield. The farm program yield is based on each

farm’s yield history. Deficiency payments were

initiated to raise and stabilize farmer incomes,

while allowing farm prices to be competitive

in the export market.

The major objective of the loan program is

to add price stability to the market by releasQUALITY CONTROL

The United States Grain Standards Act

(USGSA), administered by the Federal Grain

Inspection Service (FGIS), is the statutory authority for developing grain standards. The

Declaration of Policy contained in Section 2

of the USGSA states that it is Congress’ intent

that uniform standards for promoting and protecting grain moving in interstate and foreign

commerce be developed so that grain can be

marketed in an orderly and timely manner and

that trading in grain may be facilitated.

Standards for wheat, corn, barley, oats, rye,

sorghum, flaxseed, soybeans, triticale, sunflower seed, and mixed grain have been promulgated under the USGSA by FGIS. Each standard consists of numerical grades, i.e., 1, 2, 3,

and Sample Grade. Factors are included in each

standard and maximum limits for each factor

have been set for each grade. The grade for any

given parcel of grain is based on the factor reProgram

suits determined during the course of an inspection.

Section 6 of the USGSA states:

Whenever standards relating to kind, class,

quality, or condition are effective . . . no person shall in any sale, offer for sale, or consignment for sale, which involves the shipment of

such grain in interstate of foreign commerce

. . . describe such grain as being of any grade

. . . other than by an official grade designation.

In other words, the grain standards must be

used to describe grain being marketed and subsequently used as the basis for all inspections.

Grain is usually inspected each time it is handled, i.e., into and out of grain elevators. As

demonstrated in figure 2-4, this could result in

many inspections if grain moves through each

step in the marketing chain. Two separate
43

USDA agencies provide and/or license individuals to perform inspection services. Private

companies not affiliated with either of these

Government agencies also provide inspection

services.

Several authorities regulate inspection requirements by specifying who will perform

these services and where. In other instances,

sales contracts and individual market policies

dictate inspection requirements. In all cases,

settlement is based on inspection requirements

as required by individual sales contracts or

agreements.

No single national policy exists on inspection requirements on domestic grain. Inspection can be performed by FGIS or an FGISlicensed inspector, by a private individual

licensed by USDA’s Agricultural Stabilization

and Conservation Service (ASCS) under the

United States Warehouse Act, by private companies, or by grain elevator employees. Three

main forces determine when inspection is required: warehouse licensing requirements under the Warehouse Act or individual State warehouse authorities, the Grain Trade Rules

published by the National Grain and Feed Association, and the Uniform Grain Storage Agreement administered by ASCS.

Inspection of export grain is mandatory and

must be provided by FGIS or an FGIS-licensed

inspector. Even though inspection by FGIS is

mandatory, private companies are retained in

some cases by the importing country to inspect

grain and represent their interests during

loading.

QUALITY AS AN ISSUE

Today more competitors exist in the international grain market than just 10 years ago.

In the 1970s one-third of the world supplied

grain to two-thirds of the world’s people.

Growth in farm trade was dynamic. Today, twothirds of the world supplies grain to the other

third. Trade growth is relatively stagnant. In

such a competitive atmosphere, foreign buyers

have become increasingly sensitive about the

quality of grain they receive.

During the debate of the Food Security Act

of 1985, several Members of Congress expressed growing concern over the quality of

U.S. grain exports. Accusations were made that

grain elevator operators and export traders

were adultering loads of grain shipped to foreign buyers; these allegations were supported

by a sharp increase in foreign complaints over

quality. On the other hand, traders and handlers indicated that they have been shipping

grain according to specifications, and that most

of the buyers’ complaints were motivated by

their desire to obtain a higher grade of grain

at a lower price. Much of the focus of the debate concerned the adequacy of present grain

standards, which were developed over 70 years

ago. Critics argue that the grain standards themselves are partly to blame for customer complaints. They claim that the grain standards

have not kept pace with the changing world

marketplace and are frequently misunderstood

by foreign buyers.

Improving U.S. grain quality—or even the

perception of quality—will be much more complicated than tinkering with the criteria for determining grain grades. Grain is vulnerable to

quality deterioration at virtually every stage of

the production and marketing process. Many

aspects of the interrelatedness of producing,

harvesting, storing, handling, and testing grain

need to be understood before any changes in

the system can be contemplated. Understanding these relationships is the main goal of this

report,

First, it is important to clarify what is meant

by grain quality. Webster defines quality as an

essential character; a degree of excellence; or

a distinguishing attribute. In grain, such a definition has come to mean a variety of things.

Quality grain could be grain free of material

other than grain, or grain not cracked or
44

spoiled, or grain with the proper characteristics for its ultimate use. Therefore no one definition of quality applies as it relates to grain.

For the purpose of this assessment, grain

quality will be defined in terms of sanitary,

physical, and intrinsic characteristics.

● Sanitary quality characteristics refer to the

cleanliness of the grain. They include the

presence of material other than grain, dust,

broken kernels, rodent excreta, insects,

residues, fungal infection, and other nonmillable materials. They are essentially

characteristics that detract from the overall value and appearance of the grain.

● Physical quality characteristics are associated with the outward visible appearance

of the kernal or measurement of the kernel. These characteristics could include

kernel size, shape, and color; kernel moisture; kernel damage; and kernel density,

CHAPTER 2

1. Association of American Railroads, The Grah

Book 1986 (Washington, DC: 1987).

2. National Grain and Feed Association, “Trade

Rules and Arbitration Rules,” Washington, DC,

1985.

3. North American Export Grain Association, Inc.,

“Free on Board Export Contract—USA/Canada,” Washington, DC, 1985.

4. Perry, T. W., “Grain Attributes for the Feed Industry,” background paper prepared for the OfIntrinsic quality characteristics are critical to the specific use of the grain and can

only be determined by analytical tests. In

wheat, for example, such characteristics

refer to protein, ash, and gluten content.

For corn they could include starch, protein, and oil content, and for soybeans, protein and oil content. These characteristics,

along with the specific values, will differ,

depending on the grain and its final use.

Using these grain quality definitions, the following chapters will consider various aspects

of the quality issue. Chapters 3 through 5 look

at which quality attributes are considered important by buyers of U.S. grain and how views

on what is important change. Chapters 6

through 10 analyze the U.S. grain system’s ability to produce and deliver quality grain, and

compares the system with that of other major

grain exporters. Chapter 11 identifies policy options to enhance the quality of U.S. grain.

REFERENCES

fice of Technology Assessment, U.S. Congress,

Washington, DC, 1988.

5. Sauer, D. B., and Converse, H., “Handling and

6

Storage of Wheat: An Assessment of Current

Technologies,” background paper prepared for

the Office of Technology Assessment, U.S. Congress, Washington, DC, 1988.

Wheat Flour Institute, “From Wheat to Flour,”

revised cd., Washington, DC, 1981. ●
Chapter 3

Bask Grain Processing

Industries
CONTENTS

Page

Grain Processing Industries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

Milling Industries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

Feed Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

Soybean Processing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

Basic Processes Used To Produce Grain Products . . . . . . . . . . . . . . . . . . . . . . 50

Dry Milling Wheat and Corn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

Wet Milling Corn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

Soybean Processing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

Chapter 3 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

Figures

Figure Page

3-1. Flour Grades Obtained in the processor Milling . . . . . . . . . . . . . . . . . . . . 48

3-2. How Flour is Milled . . . . . . . . . . ....... . . . + . . . . . . . . . . . . . . . . . . . . . 52

3-3. Production Flow Chart for a Typical Corn Tempering-Degerming

System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

3-4. Block Flow Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

3-5. Wet-Milling Process Flow Diagram. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

3-6. Typical Soybean Extraction Process Flow . . . . . . . . . . . . . . . . . . . . . . . . . . 56

Tables

Table ‘ Page

3-1. Active Wheat Flour Capacity by Size Group . . . . . . . . . . . . . . . . . . . . . . . . 48

3-2. Amount of Corn Used Annually for Dry Milled and Alkaline Cooked

Products in the United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

3-3. Estimated Dry Milling Product Quantities Classified According

to End Use, 1977 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

3-4. Typical Proportion of Corn Products From a Degerming Dry Mill . . . . . 49

3-5. Shipment of Products of the Corn Refining Industry in the

United States, 1983-85 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Chapter 3

Basic Grain Processing Industries

Wheat, corn, and soybeans can be used in

a variety of ways. They can be used directly

in food for human consumption, as in the case

of wheat flour and soybean oil. Products from

these grains can also be mixed with other ingredients, as is the case with corn starch and

corn sugars, to produce a multitude of products for human consumption. Wheat and corn

are fed directly to animals or mixed with other

ingredients to produce balanced diets. Meal

produced during soybean oil extraction is used

as a feed supplement to increase the protein

content of mixed feed. Byproducts from the

various processes, such as millfeed produced

from wheat milling and steep-water concentrates from corn wet milling, are used by the

feed industry or for industrial use. In addition,

new uses for these grains are constantly being

developed–for example, ethanol and biodegradable plastics produced from corn. Therefore, the physical and intrinsic characteristics

required of each grain vary; more important,

they must be assessed in terms of their various

commercial uses.

The basic uses for wheat, corn, and soybeans

in the United States are very similar to those

in countries that import these grains. The basic

processes used to produce wheat flour, corn

starch, soybean oil, and so on are similar everywhere. Yet, differences in processing technologies exist, as do cultural preferences for certain types of products. The specific physical

and intrinsic attributes required of finished

products for U.S. consumption may therefore

differ from those required for a specific product in an importing country, even though the

basic processing technology is similar.

When identifying the basic sanitary, physical, and intrinsic requirements for wheat, corn,

and soybeans, it is important that the technology involved with producing the intermediate

product and the quality required of the finished

product be understood. This chapter thus provides basic information on grain processing industries and technologies.

GRAIN PROCESSING INDUSTRIES

Three basic industries–milling (wheat and

corn), feed manufacturing, and soybean processing—process wheat, corn, and soybeans.

Milling Industries

Milling is a process by which kernel components are separated physically or chemically.

Each milling process yields products indicative of the grain being milled. Wheat is milled

to produce various types of flour. In the case

of corn, dry or wet processes are used, and each

results in different products and byproducts.

The many products of milling can be used

directly as food or as ingredients in another type

of food product. Specialty uses of milling products have also been developed, along with uses

for the various byproducts. Thus each milling

process entails almost complete utilization of

all the grain.

Wheat Milling

Wheat is milled to remove the bran and germ

and reduce the wheat kernel to flour to be used

in various baked and nonbaked goods. Other

products of the process, e.g., vital gluten, can

supplement other edible products. Millfeed, the

material remaining after all the usable flour is

extracted, is used by the feed industry either

directly or as a feed supplement.

In general, 100 pounds of wheat will produce

72 pounds of flour. The remaining 28 pounds

is classified as millfeed (figure 3-1). In large flour

mills, 30 or more flour streams of varying com47
48

Figure 3-1. - Flour Grades Obtained In the Process

of Milling

Short patent flour so%

14%

bran

14%

shorts

SOURCE: Wheat Flour Institute, “From Wheat to Flour,” revised ed., Washington,

DC* 1981

position and purity may be collected, grouped,

and merchandised. Combining all the streams

results in a straight grade flour. The more highly

refined flour streams are taken off separately

and sold as patent grade flours. The remaining streams contain more bran and germ and

are considered clear flour. Raising the proportion of this that is included in the patent flour

lowers the quality of the remaining clear flour

(8).

Flour is used in a variety of U.S. products.

Fancy patent flour from soft wheats is used in

cake products. In the case of hard wheats, short

patent is used in premium breads, standard patent in featured breads, medium and long patent and straight in bread and rolls, and high

gluten flour in hearth breads and Kaiser rolls.

Flour types and grades produced in non-U.S.

mills vary by mill and by the type of flour

product.

The Association of American Feed Control

Officials has defined eight different types of

millfeeds: wheat bran, wheat feed flour, wheat

germ meal, wheat mill run, wheat middlings,

wheat shorts, wheat red dog, and defatted

wheat germ meal (9). These products are used

to feed cattle, poultry, and other small animals

as part of a formulated ration.

In 1988, a total of 211 flour mills and 18 Durum mills were operating in the United States

(5). The basic flour types produced and the daily

production capacities from these mills are hard

wheat flour (843,606 cwt), soft wheat flour

(247,931 cwt), whole wheat flour (40,205 cwt),

and Durum flour (96,540 cwt). Table 3-1 provides a breakdown of the 211 hard, soft, and

whole wheat flour mills by size and capacity.

Twenty-four percent of mills in the United

States produce 84 percent of all flour.

Dry Milling Corn

The dry milling process requires the miller

to remove the corn hull and germ without reducing the endosperm. The dry milling and

alkaline cooking industries processed about 161

million bushels of corn in 1986. Total corn

usage has ranged from a low of 154 million

bushels in 1975 to a high of 170 million bushels

in 1982 (table 3-2).

This process produces flaking grits, meals,

flours, oil, and other products. Low-fat flaking

grits are the highest valued grit product and

are used primarily in breakfast foods. General

food use accounted for 1,125 million pounds

of dry milling product in 1977, with breakfast

cereals using the most (table 3-3).

Table 3-4 shows the yield of primary and alternate products produced by dry milling. Breakfast cereal is produced from large flaking grits.

Coarse and regular grits are used by the brewing industry, while corn meal is made from material too small to make grits. Corn meal and

flour are made from finely ground starchy endosperm and used in various baked goods,

snack foods, and mixes, but they also have inTable 3-1.-Active Wheat Flour Capacity by Size Group

(wheat, soft wheat and whole wheat flour)

Hundredweights Number of Active Inactive

per day mills capacity capacity

Under 200 . . . . . . . . . 21 2,371 —

200-399 . . . . . . . . . . . 22 6,415 —

400-999 . . . . . . . . . . . 17 10,330 —

1,000-4,999 . . . . . . . . 61 168,670 —

5,000-9,999 . . . . . . . . 48 317,200 –

10,000 & over . . . . . . 42 615,750 –

Total 211 1,120,736 —

SOURCE: &fi//irrg and Baking News, Milling Directory/Buyers Guide” (Merriam, KS: Sosland Publishing Co., 19SS).
49

Table 3-2.—Amount of Corn Used Annually for

Dry Milled and Alkaline Cooked Products

in the United States

Dry-milled

and alkaline Total U.S.

cooked products corn production Dry-mill share

Yeara

(million bushels) (million bushels) (in percent)

1975 . . . 154 5,841 2.6

1976 . . . 155 6,289 2.5

1977 . . . 158 6,505 2.4

1978 . . . 155 7,268 2.1

1979 . . . 158 7,928 2.0

1980 . . . 160 6,639 2.4

1981 . . . 162 8,119 2.0

1982 . . . 170 8,235 2.1

1983 . . . 164 4,175 3.9

1984 . . . 160 7,674 2.1

1985 . . . 161 8,865 1.8

1986 . . . 161 8,253 2.0

‘Year begins Sept. 1,

SOURCE: U.S Department of Agriculture (USDA), Economic Research Service,

“Feed Situation and Outlook Report,” FdS-302, Washington, DC, May

1987; USDA, Agricu/tura/ Statistics, 1986 (Washington, DC: U S Government Printtng Office, 1986).

Table 3-3.—Estimated Dry Milling Product Quantities

Classified According to End Use, 1977

Quantity

Use (million Ibs)

Brewing ... , , . . . . . . . . . . . . . . . . . . . . . . . . . . 1,850

Food, general . . . . . . . . . . . . . . . . . . . . . . . . . . 1,125

Breakfast cereals . . . . . . . . . . . . . . . . . . . . . 800

Mixes (pancake, cookie, muffins, etc.) . . . 100

Baking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

Snack foods. . . . . . . . . . . . . . . . . . . . . . . . . . 100

Breadings, batters, baby foods, etc. . . . . . 75

Fortified Public Law 480 foods . . . . . . . . . . . 485

Nonfood . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 530

Gypsum board . . . . . . . . . . . . . . . . . . . . . . . . 100

Particle, fiber board, plywood. . . . . . . . . . . 40

Pharmaceuticals, fermentation. . . . . . . . . . 200

Foundry binders . . . . . . . . . . . . . . . . . . . . . . 90

Charcoal binders. . . . . . . . . . . . . . . . . . . . . . 75

Other (paper, corrugating, oil well

drilling fluids . . . . . . . . . . . . . . . . . . . . . . . 25

Animal feed . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,200

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,190

SOURCE: R.J. Alexander, “Corn Dry Milling” Processes, Products and Applications,” Corn Chernfstry and Technology, S.A. Watson and P.E. Ram.

stad (eds ) (St. Paul, MN American Association of Cereal Chemists,

1987),

dustrial uses. Corn oil obtained from dry milling is used in food products and in industrial

uses. Hominy feed consists of all the byproducts

such as hull fractions, inseparable mixtures of

hull, endosperm, germ, germ meal, and corn

cleanings. It is the single largest product sold

by dry millers (6).

The number of corn dry mills in the United

States has dropped from 152 in 1965 to only

Table 3-4.—Typical Proportion of Corn Products

From a Degerming Dry Mill (percent)

Product Yield

Flaking grits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Coarse grits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Regular grits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Coarse meal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Dusted meal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Flour . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Oil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Hominy feed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

Shrinkage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

SOURCE: O.L. Brekke, “Corn Dry Milling Industry,” Corn” Culture, Processing,

Products, G.E. Inglett (cd.) (West port, CT: AVI Publishing Co , Inc , 1970).

68 in 1986. Of these, 55 had daily capacities

of under 12,000 bushels, 8 could handle between 12,000 and 36,000 bushels, and 5 could

process 36,000 bushels a day (4). The majority

of corn dry mills are located in the midwestern and southeastern part of the United States.

The 13 largest mills have a combined estimated

daily capacity of 445,000” bushels, about 69 percent of the total corn usage for dry milling,

Wet Milling Corn

The amount of corn processed by the wet

milling industry has increased from 155 million bushels in 1960 to 645 million bushels in

1985, accounting for some 12 percent of domestic corn use (3).

Wet milling corn produces starch, oil, and

sweeteners (table 3-5). Corn starch is used in

food and nonfood products by the brewing and

baking industries; in the production of chemicals, drugs, and pharmaceuticals; by the paper

industries; and in the production of ethanol.

Sweeteners are used by the baking, beverage,

canning, and feed industries. Byproducts from

the wet milling process, including the water

used to steep the corn prior to milling, are used

by the feed industry.

Feed Manufacturing

Livestock and poultry consumed 85 percent

of domestic corn during the 1980s. Over the

past 5 years, swine consumed 34 percent of the

corn; beef, 22.3 percent; dairy, 18.2 percent;

poultry, 21.3 percent; and other classes of animals, 5.1 percent. Wheat use in feed, on the

other hand, is significantly lower. In 1985 wheat
50

Table 3-5.—Shipment of Products of the Corn Refining Industry in the United States, 1983-85 (thousand pounds)

Product 1983 1984 1985

Starch products

(includes corn starch, modified starch, and dextrin). . . . . . . . . . . . . . . . 4,018,905 4,182,866 4,225,171

Refinery products

(includes glucose syrup, high-fructose corn syrup dextrose,

corn syrup solids, and maltodextrins) . . . . . . . . . . . . . . . . ..........16,005,529 17,921,126 20,341,535

High-fructose corn syrup . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,707,041 11,502,324 13,920,406

Other products:

Corn oil crude . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72,612 116,142 164,382

Corn oil refined . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 399,919 407,456 382,234

Corn gluten feed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,391,069 8,739,730 8,811,476

Corn gluten meal

41% protein 19,115 20,272 18,503

60% protein . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,383,129 1,635,228 1,609,112

Corn oil meal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,728 29,465 48,585

Steepwater . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 211,937 300,770 282,333

Hydrol . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 208,807 216,558 228,742

Ethanol (thousand gallons, 100%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 325,000 375,000 425,000

SOURCE: Stanley A. Watson and Paul E. Ramstad (eds), Corn Chemistry and Teclrno/ogy (St Paul, MN: American Association of Cereal Chemists, 1987)

and rye combined accounted for 16.9 percent

of total feed grain consumption by livestock.

Wheat and corn can be ground and fed to animals or ground and mixed with other ingredients to produce a balanced diet for a particular species. Each animal species has specific

dietary requirements; when corn and wheat are

used, ingredients must be added to overcome

certain deficiencies in these grains (7). Feed

concentrates, byproducts from wheat and corn

milling processes, soybean meal, animal protein, and other byproducts are mixed with other

feeds or fed directly to livestock.

The modern feed manufacturer blends ingredients using a computer program designed to

select the lowest priced ingredient that is a significant source of the desired nutrients. For

most nutrients, published average values are

used and any deviation from these values will

render the feed deficient and affect animal performance.

Soybean Processing

Soybean processing separates oil by solventextraction from the nonoil portion of the bean.

The soybeans are cleaned prior to being

cracked, hulls are removed, and the cracked

dehulled pieces are heated and rolled into

flakes. Crude oil is then extracted from the

flakes. After extracting the oil, the flakes can

be toasted and ground into meal products.

The two major products from soybean processing are high-protein meal and oil. Food uses

of oil include shortening, margarine, and cooking and salad oils; nonfood uses include paint,

varnish, resins, and plastics. Soybean meal,

which is the largest product produced from this

process, is used by the feed industry as a protein supplement unmanufactured feeds.

BASIC PROCESSES USED TO PRODUCE GRAIN PRODUCTS

To fully understand the quality requirements company within the United States and among

of each industry, a general knowledge of the countries around the world.

basic technologies used to process the various

grains is important. Since such technologies Dry Milling Wheat and Corn

are similar worldwide, general descriptions are

provided in this section. Modifications of and The basic process used to mill wheat and corn

improvements to these will vary by individual involves cleaning, conditioning, grinding, and
51

sifting. In the case of dry milling corn, degerming also takes place.

Samples are taken from each incoming shipment of wheat and corn and tested. The characteristics of the wheat determine how it will

be handled, since different types are usually

blended before milling to meet various flour requirements. Figure 3-2 provides a simplified

wheat milling flowchart, and figure 3-3 is a dry

corn milling flowchart. The sequence, number,

and complexity of different operations will vary

somewhat between mills.

The first step in milling involves cleaning the

grain to remove weed seeds, other grains, and

material such as sticks, stones, dirt, and other

debris. This involves the use of scalpers to remove large material, aspiration to remove fine

material, and screens. Magnetic separators can

also be used to remove any metal from the grain.

Disc separators are used to catch individual

kernels and reject larger or smaller ones, thus

creating a uniform kernel size for milling. In

the case of wheat, the grain passes through a

scourer that throws the kernels against a surface, buffing each one and breaking off the

beard. Air currents remove the dust and 1oosened particles of the bran coat.

Wheat and corn are conditioned prior to milling. This process, called tempering, involves

adding moisture. Tempering is done to aid in

removing the bran from the endosperm during grinding, since the outer bran layers are

brittle and must be toughened. Wheat is held

in tempering bins for usually 8 to 24 hours, depending on the type of wheat. The percent of

moisture added, the amount of soaking time,

and the temperature differ for soft, medium,

and hard wheats. Corn is injected with steam

or sprayed with warm water in a tempering

chamber. This may occur in one to three stages

before the corn finally reaches 18- to 24-percent

moisture. The moist corn is then held in the

tempering bin for up to 6 hours, Corn moisture,

holding time, and the temperature during conditioning are critical for obtaining correct moisture gradients in the kernel.

Wheat Milling Process

After tempering, wheat is moved to an entoleter, which consists of discs revolving at high

speed that crack unsound wheat kernels and

separate them from the grain stream. Wheat

flows from the entoleter to the grinding bin,

where it is held and metered into the mill itself.

Corrugated rolls are used to break the wheat

into coarse particles. The initial set of these (referred to as the “first break” rolls) break the

kernel into very coarse pieces. These rolls can

be adjusted for spacing as well as speed to

achieve the exact milling surface desired, depending on the type of wheat and its condition.

As many as four to six break rolls, with successively smoother surfaces, can be used to further reduce the kernel into flour.

The coarse pieces of wheat and bran produced from the first break are sifted over a series of bolting cloths or screens to separate larger

from smaller particles. Sifters consist of as

many as 27 frames of bolting cloth with meshes

that grow progressively smaller from top to bottom. Larger material is shaken off at each step

and the finer flour sifts to the bottom. The

coarse pieces are sized and carried to the second set of break rolls. The second break rolls

are spaced closer together, producing a finer

material, This material is then sent to a sifter

and the process repeats itself.

Flour is obtained from each break roll and

sifting operation. However, fragments of endosperm, bran, and germs called middlings remain after each sifting. These are sent to purifiers, where air removes bran particles and

bolting cloth is again used to separate coarser

fractions by size and quality. The coarse material is then sent to reduction rolls and again

sifted (8).

The process of grinding, sifting, purifying,

and reducing is repeated many times until the

maximum amount of flour is obtained. Each

process results in a separate flour stream. For

example, flour is produced from each break and

middlings reduction (first, second, third, etc.).
52 I [

\
53

I

SOURCE: Richard J Alexander, “Corn Dry Mdling: Processes, Products, and Applcatlons” m Corn ChemLsiYY and Technology (St Paul, MN: American Asaoaatlon of Cereal

Chemists, 1987)

Figure 3-4 shows an example of a milling process with four breaks. In this case, 12 different

flours are produced–four from each break and

eight from each reduction (2).

Flour from each point in the process has different characteristics and baking properties and

can be combined in many different ways. Flour

from the first few middlings separations is the

most highly refined. After each additional process the flour contains more bran and germ. In

large mills, there can be 30 or more separate

streams.

Some mills, in addition to producing flour,

produce vital wheat gluten, essentially a powdery product containing 75 to 80 percent protein with a bland flavor that is able to absorb

water 2.5 times its dry weight. This product is

relatively simple to produce in that flour is

washed with water and then dried. Vital wheat

gluten is used as a supplemental ingredient in
54

1BK

rolls

2 B K

rolls

3 B K

rolls

4 B K

rolls

Breaking Purified

SOURCE: Canadian International Grams institute, “Gram& Oil seeds, Handling, Marketing, Processing,

- 3rd ad, rewed, Winnipeg, MB, Canada, 1982

breadmaking especially by commercial bakers.

It is added to a dough that requires additional

protein to develop properly.

Corn Dry Milling Process

Determination is the process by which the

corn kernel is broken apart into endosperm,

germ, and pericarps (6). Although a few companies use impact mills or granulators, about

90 percent of the dry mills producing flaking

grits use the Bean degermer almost exclusively.

This is a cone-shaped mill with rows of small

conical protrusions that rotate within an outer

conical surface that also has protrusions. This

process causes corn-on-corn rubbing to remove

germs, pericarps, fines, and a few small grits

called through-stock. Tail-stock consists primarily of grits that are free of attached germs and

pericarps.

After degerming, through-stock is normally

wetter than the tail-stock and must be dried.

This is accomplished by rotary steam-tube

dryers that quickly heat the products to 140 to

160 ‘F. After drying, the stock is cooled to 90

to 100 ‘F.

Tail-stocks consisting of large pieces of endosperm are aspirated to remove loose pericarps. The material is then sieved. Material

passing through a 3.5 mesh/inch sieve but not

a 5 mesh/inch sieve is considered large flaking

grits. Material that will not pass through the

3,5 mesh/inch sieve is recycled for retempering and degermination. Whatever passed

through the 5 mesh/inch sieve is then sieved

using 6 and 10 mesh/inch sieves. Anything passing through the 6 but not the 10 mesh/inch sieve

is considered brewers and coarse grits. If there

are any attached germs or pericarps, the material will be roller-milled.

Several sets of corrugated rollers are used in

a manner similar to that described in the wheat

milling section. Smaller numbers of corrugations are used for the first break to produce

coarse grits. Second and third break rolls use

more corrugations, resulting in more finely

ground products. After grinding, the material

is sifted and then aspirated to remove free

pericarps.

Through-stock containing germs is aspirated

to remove loose pericarps and then sent to gravity tables for separation. The germ fractions can

then be dried and sent to an oil expeller or solvent oil extraction process to recover the crude

oil. The germ meal remaining after the crude

oil has been extracted is used in hominy feed.

The material other than the germ separated

with the gravity table is recycled back to the

first break rolls to be processed with the

tail-stock.

Wet Milling Corn

Corn is first cleaned by screening and aspiration to remove dust, chaff, cobs, stones, and

so on, similar to the processes described for

dry milling (figure 3-5). After cleaning, the corn

is moved on to the refining process (3).

As in dry milling, corn must be tempered.

This is accomplished by placing the grain in

steeping tanks and adding water containing sulfurous acid that has been heated to 125 ‘F. Corn

is held in steeping tanks for 22 to 50 hours. During this time the water is recirculated and reheated.

Water is used to transport the corn from the

steeping tanks to holding bins. It is screened

off prior to the wet corn being placed in the
55

Figure 3-5. - Wet-Milling Process Flow Diagram (showing equipment arrangement for the separation of the major

components --steepwater, germ, fiber, gluten, and cornstarch)

Multiple-stage fiber wash system

I

I I

Multiple-stage starch washing system

SOURCE: James B Mag, “Wet MWng: Process and Products” In Corn Chamisby and Technology (St

bin, From the holding bin the corn moves into The material remaining in the flotation tanks

grinders that break up the kernel. Water is again is screened to separate fiber from starch and

added and the material is transported to flota- gluten. About 30 to 40 percent of all the starch

tion tanks, where the germ floats to the top. The is separated at this stage. The remaining mategerms are recovered, washed, and screened. rial is further processed, washed, and screened

The recovered germs are then dried and fur- to separate more starch and gluten. Starch is

ther processed to remove the oil, purified by washing and can be dried, treated
56

Figure 3-6.—Typical Soybean Extraction Process Flow

n

Seed Preparation

I

Meal grinder

Meal to-storage

*Alternative - A crown desolventizer toaster dryer cooler may be furnished in Ileu of desolventizer toaster and dryer cooler

SOURCE’ Crown Iron Works, 1987.
57

with chemicals to modify the starch to meet

various requirements, and then processed for

its various uses. The gluten is also washed and

then dried, forming corn gluten meal.

Corn steepwater is processed to remove the

corn solubles by evaporation. The corn solubles removed during this process are used

directly by the feed industry or in the production of corn gluten feed. The corn germ meal

remaining after the oil is extracted is also used

in the feed industry,

Soybean Processing

Soybeans are first cleaned to remove dust,

weed seeds, stones, and so on. Then they are

cracked by means of corrugated rolls and

moved to the dehuller (l). The hulls are drawn

off between the first and second cracking rolls

by dehulling equipment, using air suction (figure 3-6). Screens remove any portions of the

seeds that have been removed with the hulls.

Seed hulls are transported to a grinder, where

they can be kept separate or recombined with

the extracted meal.

The moisture content of the soybeans being

processed must be between 9.5 and 10 percent.

The cracked soybeans are first heated to about

140 ‘F and then proceed through a series of

rollers, where they are flaked, Following a cooling period, the flakes are exposed to continuous extraction with hexane to reduce the oil

remaining in the soybean flakes to 0.5 percent

or less. The extracted flakes are then transported to dryers and held at 208 ‘F for approximately 10 minutes to drive off any residual hexane. From the dryer, the flakes are moved to

a toaster for a 90-minute toasting at 220 ‘F.

Then the flakes are cooled and moved to the

grinder for reduction into the ultimate soybeanmeal-sized product.

Crude soybean oil extracted from the meal

contains impurities that can affect its quality

and must be removed. The various processes

used to remove objectionable impurities are designed to minimize the effect on the finished

oil and the loss of oil.

CHAPTER 3 REFERENCES

1.

2,

3.

4.

Brekke, O. L., “Edible Oil Processing-Introduction,” Handbook of Soy Oil Processing and Utilization, D.R. Erickson, et al. (eds.) (St. Louis,

MO, and Champaign, IL: American Soybean Association and the American Oil Chemists’ Society, 1980).

Canadian International Grains Institute,

“Grains & Oilseeds Handling, Marketing, Processing,” Zrd cd., revised, Winnipeg, MB, Canada, 1982.

May, J. B., “Wet Milling: Process and Products,”

Corn Chemistry and Technology, S.A. Watson

and P.E. Ramstad (eds.) (St. Paul, MN: American Association of Cereal Chemists, 1986).

h4iZling and Baking News, “1987 Milling Directory/Buyers Guide” (Merriam, KS: Sosland Publishing Co., 1987).

5. Milling and Baking News, “1988 Milling Directory/Buyers Guide” (Merriam, KS: Sosland Publishing Co., 1988).

6. Paulsen, M. R., “Grain Quality Attributes for

Corn Dry Milling,” background paper prepared

for the Office of Technology Assessment, U.S.

Congress, Washington, DC, 1988.

7. Perry, T. W., “Grain Attributes for the Feed Industry,” background paper prepared for the Office of Technology Assessment, U.S. Congress,

Washington, DC, 1988,

8. Pomeranz, Y., and Schellenberger, J. A., Bread

Science and Technology (Westport, CT: AVI

Publishing Co., Inc., 1971).

9, wheat Flour Institute, “From Wheat to Flour, ”

revised cd., Washington, DC, 1981.

88-378 - 89 - 3
Chapter 4

Quality Attributes Important to

Domestic and Overseas

Industries
CONTENTS

Page

Survey Description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

Quality Measurement as Evidenced by Official Standards. . . . . . . . . . . . . . . . 62

Wheat Standard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63

Corn Standard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64

Soybean Standard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

Important Attributes for Wheat, Corn, and Soybeans . . . . . . . . . . . . . . . . . . . . 67

Wheat . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68

Corn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72

Soybean Processing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78

Uniformity Between Shipments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79

Decrease In Quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

Findings and Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

Important Attributes Not in Standards. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84

Uniformity Between Shipments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84

Chapter preferences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85

Figures

Figure Page

4-1. Adequacy of Grain Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63

4-2. Importance of Wheat Standard Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

4-3. Use of Wheat Standard Factors in Contracts . . . . . . . . . . . . . . . . . . . . . . 66

Importance of Corn Standard Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

Use of Corn Standard Factors in Contracts . . . . . . . . . . . . . . . . . . . . . . . 68

Importance of Soybean Standard Factors . . . . . . . . . . . . . . . . . . . . . . . . . 69

Use of Soybean Standard Factors in Contracts,.. . . . . . . . . . . . . . . . . . . 69

Protein Range and Flour Uses of Major Wheat Classes . . . . . . . . . . . . . 70

Importance of Wheat Attributes and/or Tests—Domestic Millers . . . . . 73

Importance of Wheat Attributes and/or Tests—Overseas Millers . . . . . . 74

Additional Tests for Inclusion in the Wheat Standards. . . . . . . . . . . . . . 75

Importance of Corn Attributes and/or Tests . . . . . . . . . . . . . . . . . . . . . . . 77

Importance of Soybean Attributes and/or Tests . . . . . . . . . . . . . . . . . . . . 78

Importance of Uniformity Between Shipments . . . . . . . . . . . . . . . . . . . . . 79

Importance of Uniformity on Wheat Standard Factors . . . . . . . . . . . . . . 80

Importance of Uniformity on Corn Standard Factors . . . . . . . . . . . . . . . 81

Importance of Uniformity on Soybean Standard Factors . . . . . . . . . . . . 82

Tables

Table Page

4-1. Countries Included in OTA Wheat Survey, by Region . . . . . . . . . . . . . . . 62

4-2. Regional Tastes and Preferences for Wheat-Based End Products

and Their Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70

4-3. Importers Preference for Wheat by Type and Source . . . . . . . . . . . . . . . . 71

4-4. Quality Characteristics of U.S. No. 2 or Better DNS, 15 Percent

Protein, 1975-86 Shipments to Thailand . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83

4-5. Quality Characteristics of U.S. No. 2 or Better HRW, 11 Percent

Protein, 1981-86 Shipments to Thailand . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Chapter 4

Quality Attributes Important to

Domestic and Overseas Industries

Grain quality, or more importantly the attributes that constitute it, is as varied as the number of grains and commercial processes used

to produce finished products. Quality attributes

can vary from perfect kernels used for seed to

highly damaged corn kernels used in fuel production, and may entail cleanliness, health, and

safety concerns, Add to this cultural differences

and consumer preferences, and what may be

considered high quality for one use may be considered poor quality for the next.

Other than concerns for conditions affecting

sanitary quality, no one set of physical or intrinsic characteristics fully describes quality for

any one particular grain. Physical and chemical differences exist between varieties as a result of heredity, soil, and climatic conditions.

Further, in the case of wheat, intrinsic quality

characteristics vary from one type to the next.

Even in the case of flour, however, the way the

flour will ultimately be used has an impact on

the intrinsic wheat attributes required for high

quality.

Quality attributes (sanitary, physical, and intrinsic) are measured using a multitude of specific tests designed to provide information on

the various characteristics of grain. The most

commonly used tests for sanitary and physical

quality are those contained in the Official

United States Standards for Grain, These include measurements for conditions such as kernel density; moisture; damaged, broken, or split

kernels; impurities; and other visual defects,

In addition to tests provided for in the grain

standards, each industry, along with individual companies within each industry, has either

developed or uses internationally accepted testing procedures. These determine values for intrinsic characteristics that ultimately influence

decisions on the grain’s suitability for a particular process and product. Even the use of

any one of these tests varies by industry and

is influenced by the type of product produced.

Beyond tests for quality attributes, uniform or

consistent quality within and between shipments can also influence buyers’ perceptions

of quality, The ultimate test for quality is how

well the grain performs in actual use.

As processing technologies, increased numbers of uses, and more sophisticated methods

of using grain become available, specialization

in specific quality attributes becomes more critical. This is especially true in the case of wheat.

Flour quality is more narrowly defined for milling than for baking because milling is more

standardized around the world, even though

it varies by level of development within a country. A multitude of baking technologies exists

that are becoming more sophisticated, thus requiring flour quality to be more closely regulated. This places increased importance on the

attributes required of wheat, in addition to their

consistency within and between shipments.

Since what constitutes physical and intrinsic quality varies according to processor (wheat

miller, corn dry and wet miller, soybean processor, and feed manufacturer), the important

attributes of each were examined for this assessment. OTA identified the quality attributes important to each industry as they relate to either

the attribute itself or the test used to measure

the attribute. The important attributes are outlined later in this chapter, The levels at which

these attributes affect the quality of a finished

product are not discussed since the values

placed on the attribute by an individual industry have an impact on ideal quality, For example, protein quantity and gluten strength are

important attributes in wheat. However, high

protein and strong gluten are required by millers to produce a high-protein, strong flour for

bread, whereas low-protein and weak gluten

are required for low protein, weak flour used

to produce cakes and pastries, To aid further

in this evaluation, surveys of domestic and overseas processors were conducted to identify the

important attributes and/or tests.

61
OTA developed questionnaires for each domestic industry. The 1987 Milling Directory

was used to identify wheat milling and corn

dry and wet milling companies. Additional input was provided by their trade associations.

Questionnaires then were sent to 119 wheat

millers, 64 corn dry millers, and 6 corn wet

millers—all the companies in each industry.

Since there are thousands of feed manufacturers in the United States, the American Feed

Manufacturers Association assisted in identifying 190 major companies to be surveyed. The

Soybean Processing Directory, along with help

from the National Soybean Processor Association, was used to identify 19 major soybean

processing companies.

Responses were received from 57 out of 117

wheat milling companies (48 percent), 24 out

of 64 corn dry milling companies (38 percent),

4 out of 6 corn wet milling companies (75 percent), 83 out of 190 feed manufacturing companies (44 percent), and 10 out of 19 soybean

processing companies (53 percent).

An overseas wheat questionnaire was also developed by OTA and administered in 18 importing countries (table 4-I) by the U.S. Wheat Associates. All but one country responded. Corn and

soybean overseas questionnaires were not developed since work was already being done in

this area by other research groups, which provided data to OTA for use in this analysis.

In order to gather information on the importance of the specific attributes and/or tests identified, five basic areas were examined:

1. the attribute’s and/or test’s importance,

2. how the attribute and/or testis used when

purchasing grain,

Table 4-1.—Countries Included in

OTA Wheat Survey, by Region

Far East Europe

China Soviet Union

Japan Norway

Indonesia The Netherlands

Taiwan Italy

Republic of Korea France

Philippines United Kingdom

Middle East Switzerland

Egypt

India

South America

Venezuela

Brazil

Chile

SOURCE: Office of Technology Assessment, 1989,

3. whether quality has decreased as evidenced by any of the tests,

4. whether grain standards adequately reflect

conditions important to their operations

and if more tests are needed, and

5. the test’s importance as it pertains to uniformity between shipments.

Respondents were asked in several questions

to rank each attribute and/or test using a scale

of 1 to 7. Four was defined as being neither important nor unimportant, 5 as slightly important, 6 as moderately important, and 7 as extremely important. Yes and no questions were

also used and respondents were asked to identify the attributes and/or tests of particular concern when answering yes. The information collected in this survey only represents the

respondents’ concerns at the time it was administered, a point worth noting given the fluctuations in perceptions about important quality issues in these industries.

QUALITY MEASUREMENT AS EVIDENCED

OFFICIAL STANDARDS

Official grain standards developed for wheat, standards and the ways they are implemented

corn, and soybeans establish certain factors are discussed in ch. 8.) Each standard covers

used to describe a level of quality and provide areas such as grain type; bulk density; degree

a basis for marketing grain. (The need for grain of cleanliness; amounts of broken, shriveled,
63

or split grains; moisture content; amounts of

impurities including damaged kernels; and

other areas relating to the sanitary and physical condition of grain. The levels for each factor used to define a grade, as well as their impact on the finished product, have caused

considerable debate regarding the usefulness

of the factors and the limits established by the

grades themselves. This assessment does not

address the specific limits used to define grades,

but merely focuses on the factor’s importance.

Much research has been done on determining the impact that physical properties such as

type, color, kernel hardness and size, and degree of kernel damage have on various products. For example, kernel damage resulting

from heating, storage and field fungi, frost, and

immaturity have been shown to affect flour and

oil quality. Factors such as excessive moisture

content, the presence of molds or mycotoxins,

the amount of material other than grain, live

insects, and rodent excreta are not desired in

any product.

All industries desire grain with good bulk

density and safe moisture levels that is clean

and free from impurities and otherwise fit for

processing. These factors in various ways are

covered by the grain standards. Domestic industries as well as overseas wheat millers were

asked if the factors contained in the standards

adequately reflect conditions important to their

operation and whether additional tests are

needed (figure 4-I).

For the three corn industries (wet millers, dry

millers, and feed manufacturers), the degree to

which the factors contained in the corn standard reflects conditions important to their operations varies; only the dry millers see a need

for additional tests. Only half the domestic soybean processors considered the soybean standard adequate, but few respondents indicated

the need for additional tests.

Domestic wheat millers generally felt the

wheat standard does not adequately reflect conditions important to their operations. The need

for additional tests is evident from responses

from domestic and overseas respondents, but

is slightly higher for overseas millers even

Figure 4-1. -Adequacy of Grain Standards

—

FEED DRY WET SOY WHT-D WHT-O

Industries

Standards :,:,

adequate

ABBREVIATIONS:

FEED = Feed manufacturers WHT-D = Wheat millers

DRY = Dry millers (domestic)

WET = Wet millers WHT-O = Wheat millers

SOY = Soybean processors (overseas)

SOURCE: Office of Technology Assessment, 19S9

though they consider the wheat standards more

adequate. This section discusses each grain

standard along with information gathered from

the survey on the importance of the specific

factors covered by each standard.

Wheat Standard

Wheat is grouped according to growing habit,

color, and kernel texture. The major distinction, however, is its growing season. Winter

wheats are planted in the fall and harvested in

the summer; spring wheats are planted in the

spring and harvested in the fall. Both winter

and spring wheats produce grain that is red,

white, or yellowish amber in color. Wheat is
64

also grouped according to whether it is hard

or soft. Spring and winter types tend to be

higher in protein and are principally used in

bread flour, Softer wheats, white and red types,

contain lower protein and are milled into flour

for cakes, cookies, pastries, and crackers. Durum wheat, which is very hard, is milled into

semolina for pasta products (9). These general

groupings have resulted in the establishment

of seven basic classes: Hard Red Spring, Hard

Red Winter, Soft Red Winter, White, Durum,

Unclassed, and Mixed.

The wheat standard, in addition to establishing classes based on the above criteria using

visual examination, provides information on:

• test weight,

● moisture,

● heat-damaged kernels,

● damaged kernels total,

● foreign material,

● shrunken and broken kernels,

● total defects,

● contrasting classes, and

. wheat of other classes.

Also measured are the number of live insects;

the amount of dockage (material other than

wheat that can be removed by scalping, aspiration, and screens); special conditions such as

the presence of garlic and ergot; and the amount

of stones, metal, glass, and toxic weed seeds.

Respondents were asked in the domestic survey to rank the importance of each factor as

it pertains to producing four major flour types:

hard wheat flour, whole wheat flour, soft wheat

flour, and semolina. In addition to evaluating

whether flour type has a bearing on a factor’s

importance, the company’s daily production capacity was also factored in. The cutoff point

for capacity was set at 5,600 daily hundred

weight (cwt) capacity. The number of responses

in the 5,600-cwt-and-over range accounted for

approximately 83 percent of the total U.S. daily

milling capacity.

All factors currently contained in the wheat

standard were ranked as 5 (slightly important)

or higher by domestic millers, Each factor’s importance was similar across flour types and

milling capacities, with the highest ranking being for live insects. Overseas millers also ranked

all factors as 5 or higher. They were slightly

less concerned than domestic millers about live

insects, contrasting classes, and wheat of other

classes. For the remaining factors, overseas

millers generally regarded the factors as being

slightly more important, especially in the case

of dockage (figure 4-2).

Information was collected on whether the

wheat standard is used when purchasing wheat

and if contracts are based on grade only, grade

and factor, or only factors (figure 4-3). Even

though specific factors included in contracts

vary, 79 percent of the domestic respondents

indicated they use the wheat standard and include limits for one or more of the factors in

their contracts. This compares with 34 percent

for overseas respondents, Significant differences were found between milling capacities

for domestic respondents regarding using the

wheat standard for contracting, Those with

5,600 cwt and over capacity indicated that

limits for some or all factors are always included in contracts,

Corn Standard

Corn is classed based on color without regard

to growing habit. With color serving as the basis for classing, three classes have been established: Yellow, White, and Mixed. In addition

to visually classing based on color, the corn

standard provides information on:

● test weight,

● moisture,

● heat-damaged kernels,

● damaged kernels total, and

● broken corn and foreign material,

The number of live insects, along with stones

and toxic weeds, are also included,

Unlike the wheat standard, the corn standard is used by several different industries,

Therefore, domestic questionnaires where sent

to dry millers, wet millers, and feed manufacturers,

All industries ranked the factors as 5 (slightly

important) or higher except for class in the wet
65

Figure 4-2.-importance of Wheat Standard Factors

M HT DKT FM SHBN DEF CCL WOCL DKG INS

Factors

Domestic Overseas

millers millers

ABBREVIATIONS:

M = Moisture FM =

TW = Test weight SHBN =

HT = Heat damage DEF =

DKT = Damaged kernels (total) CCL =

SOURCE. Office of Technology Assessment, 1989

Foreign material WOCL = Wheat of other classes

Shrunken and broken kernels DKG = Dockage

Total defects INS = Live insects

Contrasting classes

milling and feed manufacturer responses (figure 4-4), Differences exist across all industries

regarding the importance of certain factors, but

wet millers consistently ranked factors as more

important than the other two,

Industries differ on which factors have limits

included in contracts. All wet millers indicated

they use the corn standard and include limits

in their contracts for one or more of the factors. This compares with 75 percent for the dry

milling and feed manufacturers. Except for broken corn and foreign material, the frequency

with which individual factors are included in

contracts varies (figure 4-5), Moisture was mentioned the most often by feed manufacturers,

whereas heat-damaged kernels was contracted

for the most often by dry millers and damaged

kernels total was included by wet millers.

The data on the importance to overseas industries of factors contained in the corn standard were obtained from surveys not conducted

by OTA. This resulted in only one common

area—contracting—between the OTA domestic questionnaire and overseas responses. Responses by the three overseas industries indicated that limits for moisture, test weight,

damaged kernels total, and broken corn and

foreign material are included in contracts by
66

Figure 4-3. - Use of Wheat Standard Factors in Contracts.

—

—

M TW HT DKT FM SHBN DEF WOCL DKG

Factors

I

Domestic Overseas

millers millers

ABBREVIATIONS:

M= Moisture FM = Foreign material WOCL = Wheat of other classes

TW = Test weight SHBN = Shrunken and broken kernels DKG = Dockage

HT = Heat damage DEF = Total defects

DKT = Damaged kernels (total) CCL = Contrasting classes

~ Percentages are based on number of responses that use standards for contracting

SOURCE. Office of Technology Assessment, 1989

wet millers and feed manufacturers. Moisture,

damaged kernels total, and live insects are included in contracts by dry millers.

Soybean Standard

Soybeans are classed based on color, and two

classes have been established: Yellow and

Mixed. In addition to visually classing based

on color, the soybean standard provides information on:

● test weight,

● moisture,

● heat-damaged kernels,

●

●

●

INS = Live insects

damaged kernels total,

foreign material, and

splits.

J

INS

The number of live insects, garlic, stones, and

toxic weeds are also included.

Several factors were ranked below 5 (slightly

important) by domestic soybean processors

class, test weight, and splits (figure 4-6), The

test for live insects did not rank as the most

important test, as it did for wheat and corn,

since live insects are not normally a problem

in soybeans. Heat-damaged kernels received the

highest ranking for soybeans.
67

Figure 4-4.--Importance of Corn Standard Factors

CL M TW HT DKT

Factors

ABBREVIATIONS:

CL = Class DKT =

M = Moisture BCFM =

TW = Test weight INS =

HT = Heat damage

SOURCE: Office of TechnologyAssessment, 1989

Damaged kernels (total)

Broken corn and foreign material

Live insects

All soybean processors indicate that they use

the soybean standard and set limits in their contracts for one or more factors. Moisture and

heat-damaged kernels were identified as being

contracted for the most often (figure 4-7).

As with the corn standard, information on

the importance to importers of factors conIMPORTANT ATTRIBUTES FOR

Many factors influence grain value and what

is considered quality either by affecting wholesomeness or by affecting the yield and quality

of the finished product. Factors such as pesticide residue, molds, mycotoxins, toxic weed

n

INS

tained in the soybean standard was obtained

from another survey. Moisture and foreign material were ranked as most important by overseas soybean processors, while moisture, test

weight, and damaged kernels total were identified as having limits included in contracts.

WHEAT, CORN, AND SOYBEANS

seeds, insect fragments, and soon affect a product’s wholesomeness. Yield and quality can be

affected by variety; kernel size, shape, color,

and hardness; foreign material, dust, and stems;

and intrinsic properties such as protein, oil, and
I

68

Figure 4-5. -Use of Corn Standard Factors in Contracts ●

—

—

CL M TW HT DKT BCFM IN

Factors

ABBREVIATIONS:

CL = Class HT = Heat damage

M = Moisture DKT = Damaged kernels (total)

TW = Test weight BCFM = Broken corn and foreign material

a percentage are based on number of responses that use standards for contracting

SOURCE: Office of Technology Assessment, 1989

starch. This section examines wheat, corn, and

soybeans for these type of factors.

Wheat

The ultimate test for wheat quality is whether

it will bake an acceptable product. Protein

quantity and quality, the amount of alpha amylase, and dough handling properties (water absorption, mixing time, and extensibility) along

with other tests are used as indicators of quality and impact on baking quality. Except for

Durum, the differences between the amount of

protein required to produce certain products

and the range of protein between classes reINS = Live insects

veal the inability of any one wheat class to be

perfectly suited-for any one finished product

(figure 4-8). This is also true for wheats produced in various regions of the world. This

forces millers to blend different wheat types

in order to produce the flour quality desired.

Not only can different types be blended, but

importers blend different U.S. wheat classes

with wheats imported from other countries (table 4-2).

Millers blend wheats in order to produce

flour that can meet the variety of demands of

various finished products. In many instances

flour produced from the various flour streams
7.0

6.5

4.5

4.0

Figure 4-6. - Importance of Soybean

Standard Factors

CL M TW HT DKT FM SPL INS

Factors

ABBREVIATIONS:

CL = Class DKT = Damaged kernels (total)

M = Moisture FM = Foreign material

TW = Test weight SPL = Splits

HT = Heat damage INS = Live insects

SOURCE: Office of Technology Assessment, 1989

(see ch. 3) is also blended to meet the specific

quality demands placed on flour. Information

on protein quantity and quality along with other

important quality characteristics such as the

amount of alpha amylase (as measured by the

falling number test), dough handling properties (as measured by farinograph, mixograph,

extensograph, and alveograph tests), and bake

test results are all used to determine the quantities of each wheat type that will go into the

blend.

To produce a hearth bread, spring and winter/spring mixes maybe required. Spring, winter/spring mixes, and winter wheats are used

for buns and rolls. Pan bread uses winter, winter/spring mixes, and spring wheat. Cakes and

pastries may use red and white soft wheat, low69

Figure 4-7.-Use of Soybean Standard Factors

in Contractsa

CL M

Factors

ABBREVIATIONS:

CL = Class DKT = Damaged kernels (total)

M = Moisture FM = Foreign material

TW = Test weight SPL = Splits

HT = Heat damage INS = Live insects

a Percentages are Mon number of respaw.esthat use standards forcontractmg

SOURCE: Office of Technology Assessment, 1989

protein winter, and blends of other wheat types.

In addition, U.S. winter wheats with various

attributes from various regions may be blended

with spring wheats. Blending wheats from various origins, types, and intrinsic characteristics

allows millers to produce flour to meet various flour specifications, maximize the milling

operation, and produce uniform, consistent

flour quality.

To illustrate this point further, the OTA overseas questionnaire collected information on the

primary reason for importing wheat. Five basic

reasons were suggested:

1. to supplement the volume of domestic

wheat,
70

Figure 4-8.-Protein Range and Flour Uses of Major Wheat Classes

——

Flour uses

●

●

Used to blend With weaker

wheats for bread flour

Whole wheat bread,

hearth breads

Egg noodles (U.S.),

macaroni, and other

alimentary pastes

White bakers’ bread,

bakers’ rolls

Waffles, muffins, quick

yeast breads, all-purpose

flour

Noodles (Oriental), kitchen

cakes and crackers, pie

crust, doughnuts and

cookies, foam cakes, very

rich layer cakes

SOURCE: U S Oepariment of Agriculture, Economk Reaaarc h Service, Wheat Background for 19S5Farm LeglalatlM,. A@cu)tural lnfomuUion Bulletin No 4S7, September 19S4

Table 4-2.—Regional Tastes and Preferences for Wheat= Based End Products

and Their Requirements

Averaged required

Major products protein level Types of

Region consumed (in percent) wheat used

Fast East Asia Pan bread 12-14 Hard red

Steamed products 10-11 Medium-hard

Noodles 9-11.5 Medium-hard white

Chappatis 9-1o Soft to mediumhard white

MiddIe East and Bread Durum, mediumNorth Africa hard white and red

Couscous, pasta, 9-11 Durum

bulgur, fereek

Europe White pan bread 10-12 Hard red, domestic soft

Rolls 9.5

Pasta Durum

Latin America Breads 10-14 Hard red, domestic soft

Pasta Durum

SOURCE: Canada Grains Council, Wheats of the World (Winnipeg, MB, 1979).

to supplement quality for blending with As more than one reason may apply to a pardomestic wheat, ticular country, respondents were asked to inequalities are not available in domestic dicate all that applied, The results indicate that

wheat, 51 percent import wheat to supplement volume,

as feed, and 32 percent to supplement quality, 47 percent

local wheat is not available. because quality is not available in domestic
71

wheat, 6 percent for feed, and 13 percent because local wheat is not available.

Importers’ preferences for bread, soft, and

Durum wheats from all countries exporting

these types were also evaluated. Each respondent was asked to rank their preference assuming that price, transportation, and other related

costs were equal. Overall the United States did

not rank as first choice, even though some respondents did identify it as first choice, The

average for all responses is shown in table 4-3.

When identifying important wheat attributes,

the demands placed on flour quality must be

considered. Flour is used to produce a large

number of products under various baking conditions. Advances in milling technology have

enabled millers to increase the water absorption of flour so bread yield can be increased.

Flour protein levels can also be modified by air

classification. This process separates lowprotein flour for use in cakes and pastries from

high-protein flour that can be used to blend with

other flours (2). In addition to traditional leavened bread, many countries produce a variety of unleavened products using weaker flour

and chemical leavening.

Flour is classified according to strength, ranging from strong to weak (7). Strong flours have

relatively high protein and elastic gluten and

can be baked into loaves that have good crumb,

grain, and texture. They require considerable

water to make a dough that produces a highyield bread. Doughs from strong flours have

excellent handling properties. They are not critical in their mixing and fermentation properties, and yield good bread over a wide range

of baking conditions.

Weak flour, on the other hand, has relatively

low protein, weak gluten, and low water absorption; it yields dough of inferior handling

quality for bread baking, and mixing and fermentation requirements are critical. Weak

flours, therefore, require less mixing and fermentation than strong flours and can be used

to bake biscuits, crackers, and pastry. Intermediate flour strengths can be considered allpurpose flours for use in traditional household

applications.

Baking technologies also influence flour

attributes, Chemical and mechanical dough development processes require lower flour protein and weaker gluten than straight (traditional) dough processes. Since flour can be used

for home use, in small bakeries, and in highly

mechanized plants, knowledge of intrinsic

wheat attributes along with how the flour will

be baked are required in order to produce a

quality flour.

Since no one set of values—high v. low protein or strong v. weak flour-meets the needs

of all products, the survey questionnaire was

used to determine which attributes and/or tests

are important to wheat millers here and abroad,

No effort was made to determine levels since

they vary by product, country, and baking technology.

Traditionally, wheat class has been used as

a quality indicator. Spring wheats have traditionally been high-protein, strong gluten wheats

used to make products requiring strong flours

and for blending with other wheat types. Soft

wheats, which are lower in protein, are used

in products requiring weak flour. Domestic and

overseas millers were asked if “wheat class is

Table 4“3.—lmporters Preference for Wheat by Type and Source

Bread-type wheats Soft-type wheats Durum wheats

1. Canadian spring 1. Australian standard white 1. Canadian

2. Australian prime hard 2. U.S. white 2. Us.

3. U.S. spring 3. U.S. soft red 3. Argentinean

4. U.S. hard red winter 4. Australian soft white 4. EC

5. Australian hard 5. EC soft

6. Argentinean hard

7. EC soft

8. U.S. soft red

SOURCE OTA Overseas Wheat Survey, 1988
72

I

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I

a good indicator of wheat quality”; both groups

indicated that wheat class alone is not a satisfactory indicator of quality.

In an effort to identify the importance of various attributes and/or tests to domestic millers,

the survey listed 28 attributes and/or tests not

currently found in the wheat standard. As in

the wheat standard analysis, the 28 items were

evaluated by flour type and an analysis was

made between capacities for domestic millers.

Other than attributes and/or tests not normally used for a particular flour type, no significant differences were found between flour

types. Slightly more variability between flour

types was evident in the under-5,600-cwt category, and overall rankings varied on some items

between capacities (figure 4-9). Eight items (protein, mycotoxins, alpha amylase, falling number, pesticide residue, hidden/dead insects,

flour protein, and bake test) were ranked as 6

(moderately important) by the over-5,600-cwt

capacity companies. Only mycotoxins, pesticide residue, and hidden/dead insects were

ranked as 6 or higher by the smaller companies.

In the overseas questionnaire, only 22 attributes and/or tests were included. Most respondents did not rank the items using the 1 to 7 scale

but merely checked the important ones. The

importance ranking is therefore based on the

frequency with which they responded.

Significant differences exist between items,

but more importantly between regions of the

world (figure 4-10). For example, protein and

alpha amylase were considered the most important by Far East countries. This compares

with protein, the falling number test, starch

damage, and flour yield in the European Community (EC). Overall, the Far Eastern countries

ranked the majority of the items as more important, followed by EC, South America, and

then the Middle East.

The frequency with which the 28 items were

included in domestic contracts was also examined. Overall, 70 percent of those responding

(but 88 percent of the 5,600-cwt-and over category) indicated that one or more items were

included in contracts. Five items (protein, hidden/dead insects, pesticide residue, falling number, and farinograph) were identified as being

contracted for most frequently.

Only 14 of the 22 attributes and/or tests listed

in the overseas questionnaire are included in

contracts. Sixty-two percent of those responding indicated that protein is specified in each

contract. Of the remaining 13 items, 23 percent

indicated they specify limits for one or more.

The falling number test and radiation ranked

first (45 percent) followed by the farinograph

test (36 percent), pesticide residue (18 percent),

and mycotoxins (18 percent).

Both groups indicated additional tests are

needed, as demonstrated by their responses on

whether the wheat standard adequately addresses their needs. The falling number test and

pesticide residue were the main items identified by both groups (figure 4-11). Domestic

millers also marked hidden/dead insects for inclusion. Overseas millers identified tests for

dough handling properties (farinograph, extensograph, alveograph, and amylograph) for inclusion, while domestic millers did not indicate any preference for these tests even though

they often contract for the farinograph.

Corn

Three main industries account for the majority of corn usage and each one has different

requirements. The following is a brief discussion of the important attributes for each industry.

Corn Dry Milling

Several factors affect dry milling performance, yields, and the quality of products derived

from dry milling. These factors include:

●

●

●

●

●

●

corn hardness;

drying temperature;

stress cracks;

broken corn and foreign material;

kernel size and shape; and

wholesomeness or freedom from molds,

aflatoxin, insects, rodent excreta, toxic substances, odors, and so on.
73

Figure 4-9. --lmportance of Wheat Attributes and/or Tests - Domestic Millers

PRO KWT HD SZ MYCO ASH P/s AMLY FN SED RES

I(H/D) SD GLT F/CL P/FL A/FL FAR ALV MIX BT

Attributes/tests

Particle size SD = Starch damage EXT = Extensograph

Alpha amylase GLT = Wet/dry gluten ALV = Alveograph

Falling number F/CL = Flour color MIX = Mixograph

Sedimentation P/FL = Flour protein BT = Baking test

Pesticide residue A/FL = Flour ash

Insects (hidden/dead) FAR = Farinograph
74

9 0

8o

70

3 0

2 0

1

1 10

0

Figure 4-10.—lmportance of Wheat Attributes and/or Tests — Overseas Millers

PRO KWT HD SZ MYCO ASH P/s AMLY FN SED RES

I

I

I

I

SD GLT F/CL P/FL A/FL YD FAR

Attributes/tests

ALV MIX AMY

ABBREVIATIONS:

PRO = Protein P/S = Particle size GLT = Wet/dry gluten EXT = Extensograph

KWT = 1,000 kernel weight AMLY = Alpha amylase F/CL = Flour color ALV = Alveograph

HD = Hardness FN = Falling number P/FL = Flour protein MIX = Mixograph

SZ = Kernel size SED = Sedimentation A/FL = Flour ash AMY = Amylograph

MYCO = Mycotoxins RES = Pesticide residue YD = Flour yield

ASH = Wheat ash SD = Starch damage FAR = Farinograph

SOURCE: - of Technology _ment, 1989
75

Figure 4-11 .–Additional Tests for Inclusion in Wheat Standards”

10

0

50

40

30

20

10

0

ABBREVIATIONS:

PRO = Protein

HD = Hardness

MYCO = Mycotoxins

ASH = Wheat ash

FN = Falling number ALV = Alveograph

SED = Sedimentation AMY = Amylograph

RES = Pesticide residue RAD = Radiation

l(H/D) = Insects (hidden/death) BT = Baking test

GLT = Wet/dry gluten EXT = Extensograph ‘

a Percentages are based on number of responses that indicated additional tests are needed

SOURCE: Office of Technology Assessment, 1989
76

Corn hardness can be defined as the quantity of vitreous or horny endosperm contained

in a corn kernel relative to the amount of floury

endosperm. Corn hardness is almost entirely

a result of corn genotype, but to a limited extent nitrogen, soil fertility, and drought can

cause hardness to increase. Dry millers need

a hard corn in order to produce high yields of

large flaking grits and have even developed approved lists of corn hybrids.

Excessive drying temperatures can lead to

corn kernel stress cracking, which has deleterious effects on dry milling yields. The stress

crack formation in the horny endosperm is

caused by rapidly drying kernels with heated

air. Stress-cracked corn not only causes increased breakage during handling, but also reduces flaking grit yields since stress-cracked

flakes produce smaller grits when undergoing

cooking and pressing through flaking rolls.

Broken corn and foreign material is detrimental to dry milling and no attempt is made to use

this material in the milling process. It is removed prior to milling and diverted to hominy

feed. Broken kernels affect the tempering process because they absorb moisture faster than

whole kernels. Kernel size, shape, and color also

affects the dry milling process. Round kernels

are more difficult to degerm than flat kernels,

and the same is true of small kernels compared

with large ones. Color is important to producing corn chips because the alkali cooking process modifies the color. In some cases white and

yellow kernels are blended to produce the

desired color (5).

Corn Wet Milling

Since the wet milling process involves steeping with elevated temperatures and sulfur

dioxide, fungi and other micro-organisms are

destroyed (4). Many of the other wholesomeness factors such as insects, mycotoxins, and

other debris are not found in the food product

after processing but can be found in the feed

byproducts if they are present in the corn being processed.

High levels of broken corn and foreign material, breakage susceptibility, and damaged

kernels are not desired by the wet milling industry. Broken corn must be removed prior to

processing because it affects steeping. High

levels of mold-damaged kernels affects germ

recovery and crude oil quality. Drying temperature, as discussed in the dry milling section,

causes stress cracking and increases breakage

susceptibility, which affects starch recovery.

Feed Manufacturing

All feed grains are highly palatable to livestock. Corn has the lowest protein content of

all feed grains. However, the protein in all feed

grains has a relatively low biological value for

monogastric animals due to a deficiency of one

or more essential amino acids. When formulating diets for poultry and swine, therefore, supplemental protein that adds sufficient amino

acids to balance this deficiency must be added.

Also, feed grains are extremely low in calcium

content and in phosphorus, and deficient in several essential vitamins (6). Therefore, these deficiencies must also be overcome with supplements in various degrees, depending on the type

of animal to be fed (3).

Properly balanced diets containing wholesome ingredients are necessary for efficient

livestock production. In addition, variations in

important intrinsic properties (protein, crude

fiber, total digestible nutrients) from published

values are detrimental to efficient feed production.

Survey Results

The OTA questionnaire sent to dry millers,

wet millers, and the feed manufacturers listed

19 attributes and/or tests not currently found

in the corn standard (figure 4-12). With the exception of starch and oil content in the wet

millers’ rankings, all three industries ranked

hidden/dead insects, mold, mycotoxins, and

pesticide residue as the most important items.

Breakage susceptibility, stress cracks, and hardness, as expected, were ranked higher by wet

and dry millers than by feed manufacturers.

Protein is considered more important by wet

millers and feed manufacturers. Oil and starch

content were considered very important by wet
77

n

6.5

I

n

ABBREVIATIONS:

VAR = Variety BSUB =

l(H/D) = Insects (hidden/dead) RES =

MD = Mold ADT =

MYCO = Mycotoxins FFA =

SZ = Kernel size PRO =

SOURCE: Office of Technology Assessment, 1989

Breakage susceptibility OIL = Oil FIB = Fiber

Pesticide residue ST = Starch ASH = Ash

Artificial drying temperature ONUT = Other nutrients STC = Stress cracks

Free fatty acid CL = Color HD = Hardness

Protein AGE = Age
78

1

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4

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,

I

millers, but only marginally important by dry

millers and feed manufacturers.

Seventy-one percent of the wet and dry millers and 36 percent of feed manufacturers indicated that limits for one or more of the 19

items were being included in contracts. Five

items (hidden/dead insects, mold, mycotoxins,

pesticide residue, and stress cracks) were found

most often in contracts by all industries.

Data from the survey of importers only involved the attributes and/or tests that are included in contracts. Stress cracking was the

only one identified by dry millers as having

limits included in contracts, whereas five items

(protein, fiber, starch, oil, and mycotoxins) were

marked by wet millers being included. Overseas feed manufacturers specify limits on four

items (protein, fiber, energy, and carbohydrates)

in contracts.

Soybean Processing

The quantity and quality of soybean protein

and oil are important attributes to processors

since the main products are high-protein meals

and oil. Crude soybean oil contains oil-insoluble

and oil-soluble impurities that must be removed

(1). Oil-insoluble impurities include seed fragments, excess moisture, and waxy fractions that

make oil cloudy. Oil-soluble impurities such as

free fatty acid, phosphatides, and protein fractions are detrimental to the oil’s flavor, odor,

color, and stability.

Of 16 attributes and/or tests not currently contained in the soybean standard, soybean processors ranked protein, oil, oil stability, and neutral oil loss as most important (figure 4-13). No

limits for any of the 16 items listed, however,

are included in contracts.

For overseas soybean processors the importance of items and which items have limits included in contracts were evaluated. Protein, oil

and free fatty acid were considered the most

important and the only items for which limits

are included in contracts.

Figure 4-13. - Importance of Soybean Attributes

‘and/or Tests -

IIN

Attributes/tests

ABBREVIATIONS:

PRO = Protein FAC = Fatty acid content

OIL = Oil PL = Phosphorous level

FFA = Free fatty acid PV = Peroxide value

RES = Pesticide residue L = Lipoxygenase

l(H/D) = Insects OS = Oil stability

(hidden/dead) HP = Hydratable

LN = Lovibond number phosphatides

IN = Iodine number NOL = Neutral oil loss

IC = Iron content CC = Chlorophyll content

SOURCE. Office of Technology Assessment, 1989
79

UNIFORMITY BETWEEN SHIPMENTS

Delivering uniform, consistent quality between shipments has been identified by overseas and domestic industries as important. U.S.

industries have more flexibility in handling a

shipment that is not up to specification, since

the grain can be resold or blended. Many overseas industries cannot do this since they have

little or no inventory and each time a shipment

arrives they must deal with the quality received.

The need for uniform or consistent quality

was documented at the International U.S.

Wheat End Use Quality Conference in June

1986 by Dr. Seiichi Nagao from the Nisshin

Flour Milling Co., Ltd., Japan, and by Emma

B. Laguio, United Flour Mill Co., Ltd., Bangkok, Thailand. Dr. Nagao stated:

The low reliability of U.S. Hard Red Spring

wheat is caused by wide fluctuation both in

milling and in baking performance, and it

seems to me that the quality fluctuation among

cargoes is getting larger and more serious,

. . .Besides ash content, almost all quality items

including test weight, moisture, protein, flour,

yield, the analytical data of flour and baking

performance vary very widely. As we are afraid

of giving our large customers trouble in their

automated baking process by blending a large

amount of U.S. Hard Red Spring wheat that

varies widely in its baking absorption and

dough handling property, it is thought to be a

supplementary material usable only with No.

1 Canada Western Red Spring wheat which is

more stable in quality (8).

Emma Laguio echoed Dr. Nagao but added

that consistency in quality is foremost in the

Asian miller’s mind.

Bakers in our region require consistency of

quality in flours they use. Flour millers also require consistency of quality in the wheat they

will mill. I realize that the attainment of consistent or even near-consistent wheat quality

at any given time calls for more than just the

acts of mortals. However, there are factors

within the producer’s control which can and

do contribute to quality consistency in wheat.

This, I believe is particularly important to Asian

millers who are a captive market, so to speak,

in the sense that we are obligated to mill whatever wheat we receive (8).

When identifying important grain quality attributes, the system’s ability to consistently deliver these attributes can be as big a factor as

the attribute itself, as evidenced by these importers’ statements. The qualities desired are

generally available, given the information collected from the OTA survey. But quality fluctuations between shipments can affect purchasing decisions and the ultimate use of a

particular grain.

As part of the OTA survey, each industry was

asked to rank the importance of uniformity between shipments (figure 4-14). Domestic and

overseas wheat millers ranked the importance

of uniformity between shipments as 6 (moderately important) or higher. The wet millers conFigure 4-14. - Importance of Uniformity

Between Shipments

FEED DRY WET SOY WHT-D

Industries

ABBREVIATIONS:

FEED = Feed manufacturers WHT-D = Wheat millers

DRY = Dry millers (domestic)

WET = Wet millers WHT-O = Wheat millers

SOY = Soybean processors (overseas)

SOURCE: Office of Technology Assessment, 1989
80

—

sidered uniformity more important than the

other corn industries did, while the soybean

processors ranked it as 5 (slightly important).

When evaluating future attributes/and or tests

for grain, the ability to deliver uniform, consistent quality must be addressed, The importance of delivering consistent quality is evident

when examining the factors currently contained in each standard. Significant concern

exists for these factors regarding uniformity

(figures 4-15, 4-16, and 4-17).

For wheat, moisture, test weight, dockage,

and live insects stand out as being critical factors regarding uniformity between shipments

to overseas buyers. With the exception of dockage, these factors are also considered the most

important in terms of uniform it y between shipments to domestic millers.

Except for moisture, the importance of each

factor varies by individual corn industry, Moisture was considered the most important factor

overall in terms of uniformity, followed by

damaged kernels total.

The importance of uniformity between shipments for attributes and/or tests not currently

found in the grain standards again reflects the

industries’ concerns, Protein content, in the

case of wheat, was considered the most important by domestic and overseas millers. Overseas millers showed more concern for dough

Figure 4-15.-lmportance of Uniformity on Wheat Standard Factors

100 ‘

3o1-

—

M TW HT FM INS

ABBREVIATIONS:

M = Moisture FM = Foreign material DKG = Dockage

TW = Test weight SHBN = Shrunken and broken kernels INS = Live insects

HT = Heat damage DEF = Total defects

DKT = Damaged kernels (total) WOCL = Wheat of other classes

SOURCE: Office of Technology Assessment, 1989
81

Figure 4-16.-lmportance of Uniformity on Corn Standard Factors

—

CL M TW HT DKT BCFM INS

Factors

Wet ❑

Dry

milling millin g❑ Feed

ABBREVIATIONS:

CL = Class DKT =

M = Moisture BCFM =

TW = Test weight INS =

HT = Heat damage

SOURCE: Office of Technology Assessment, 1989

Damaged kernels (total)

Broken corn and foreign material

Live insects

handling tests than did domestic millers, but

domestic millers ranked the bake test second

in importance. Except for mycotoxins, the three

corn industries ranked the items differently,

DECREASE

Each industry was asked in the OTA survey

if quality has decreased as evidenced by any

of the factors contained in the grain standards

or for the attributes and/or tests listed. The domestic and overseas wheat millers indicated

that they have perceived a decline in quality.

Sixty-six percent of the overseas respondents

indicated that they have experienced a decrease

with concerns being evident for the items of

particular interest to each. Soybean processors,

on the other hand, did not identify any item

as being overly important.

in wheat quality. Five factors (moisture, heat

damage, foreign material, wheat of other

classes, and dockage) were identified as having gotten worse. Domestic millers also identified these factors, but ranked four others (test

weight, damaged kernels total, shrunken and

broken kernels, and live insects) as the areas

showing declines. Both groups indicated that

quality has decreased in terms of protein and
82

Figure 4-17. - Importance of Uniformity on Soybean

‘Standard Factors

the falling number test. Overseas millers also

identified wet/dry gluten and the farinograph

test, whereas domestic millers expressed concerns for the presence of hidden/dead insects.

The results from the survey regarding decreases in wheat quality were also reported by

Emma Laguio (tables 4-4 and 4-5), who pointed

out at the International End Use Quality Conference that test weight, kernel size, and kernel hardness have been decreasing over time.

Lower water absorption and shorter mixing

times of spring wheat, as demonstrated by the

farinograph test, have been evident since 1983.

Further, it was reported that 1985 and 1986 arrivals show significantly lower water absorption and mixing time as compared with the

shipments of the 1970s, and that flour doughs

are softer and slightly more extensible. These

conditions, in his opinion, indicate lower gluten strength.

Factors

ABBREVIATIONS:

M = Moisture FM = Foreign material

TW = Total weight SPL = Splits

HT = Heat damage INS = Live insects

DKT = Damaged kernels (total)

SOURCE: Office of Technology Assessment, 1989

FINDINGS AND CONCLUSIONS

All processors desire grain that is free from

pesticide residues, molds, mycotoxins, toxic

weed seeds, and insects and insect fragments,

and that otherwise is in a sanitary condition,

The importance, however, of physical and intrinsic quality characteristics can vary by grain

and by processor and are influenced by the

grain’s ultimate use. Each industry, domestic

and overseas, defines quality in terms of the

areas important to its market, as the OTA survey of buyers confirmed.

Standards

Domestic and overseas wheat millers consider the factors contained in the wheat standard important, but indicated a need for additional tests. However, overseas millers generally

consider the factors contained in the standard

as slightly more important. Live insects were

considered the most important factor by both.

Domestic millers include in their contracts

limits for the factors contained in the standard

more often than overseas millers, who purchase

on grade only with limits.

Overall each corn industry considers the factors contained in the standard as important.

Differences exist between industries regarding

the importance of each factor, but wet millers

consistently ranked the factors higher than dry

millers and feed manufacturers did, Differences
83

Table 4-4.—Quality Characteristics of U.S. No. 2 or Better DNS, 15 Percent Protein, 1975-86 Shipments to Thailand

1975 1978 1981 1983 1984 1985 1986

Wheat characteristics:

1,000 kernel weight (g) . . . . . . . . . . . . . . . 29.2 31.4 32.4 32,1 31.9

Grain hardness (o/o) . . . . . . . . . . . . . . . . . . — 13.2 12.4 11.5 12.3

Moisture (o/o) . . . . . . . . . . . . . . . . . . . . . . . . 12.1 12.5 13.0 11.8 11.2

Ash (

0

/0) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.50 1.52 1.53 1.64 1.63

Protein (o/o, as is M. B.) . . . . . . . . . . . . . . . 15.2 15.1 14.7 15.0 15.0

Protein (o/o, 12.0°/0 M. B.) . . . . . . . . . . . . . . 15.2 15.2 14.9 15.0 14.9

28.3

15.2

11.6

1.59

15.0

14.9

27.4

15.2

12.3

1.60

15.2

15.2

Flour characteristics (milled in Buhler Mill MLU-2020):

Flour extraction (o/o) . . . . . . . . . . . . . . . . . — 73.0

Ash (

0

/0) . . . . . . . . . . . . . . . . . . . . ., . . . . . . 0.53 0.41

Protein (o/o, 13.0°/0 M. B.) . . . . . . . . . . . . . . 14.5 14.5

Wet gluten (%) . . . . . . . . . . . . . . . . . . . . . . 40.2 38.5

Amylogram peak viscosity (BU) . . . . . . . . – 620

Farinogram:

Absorption (o/o) . . . . . . . . . . . . . . . . . . 69.3 68.8

Peak time (min.) . . . . . . . . . . . . . . . . . 14.5 11.5

Mixing tolerance index (BE) . . . . . . . 25 15

Stability (min. ). . . . . . . . . . . . . . . . . . . 20 26

Calorimeter (BU) . . . . . . . . . . . . . . . . . 87 90

Extensogram:

45 minutes

Extensibility (mm.).... . . . . . . . . . . . . . 232 240

Resistance . . . . . . . . . . . . . . . . . . . 240 265

Area (sw. cm.) . . . . . . . . . . . . . . . . . . . . . 127 150

135 minutes

Extensibility (mm.)... . . . . . . . . . . . . . . 181 214

Resistance . . . . . . . . . . . . . . . . . . . . . . . . 480 345

Area (sq. cm.) . . . . . . . . . . . . . . . . . . . . . 176 171

73,5

0.42

13.8

37.5

545

73.4

0.51

14.2

38.2

728

74.1

0.48

14.0

38.0

869

72.6

0.46

14.2

38.0

805

70.6

0.46

14.2

39.5

500

67.5

11.5

15

26

92

66.0

8.0

20

16

77

65.4

9.5

20

20

85

64.3

9.5

25

25

89

64.9

8.5

25

20

89

244

275

161

262

256

174

242

324

188

235

299

186

236

320

192

218

320

209

246

283

218

255

382

222

235

386

230

240

400

217

SOURCE U S Wheat Associates, “U S Wheat End Use Quality Conference,” published proceedings, Washington, DC, June 1986

Table 4-5.—Quality Characteristics of U.S. No. 2 or Better HRW, 11 Percent Protein, 1981-86 Shipments to Thailand

1981 1982 1983 1984 1985 1986

Wheat characteristics:

1,000 Kernel weight (g) . . . . . . . . . . . . . . . 30.5 31.7 31.6 31.7

Grain hardness (o/o) . . . . . . . . . . . . . . . . . . 11.4 11.8 12.5 14.2

Moisture (o/o) . . . . . . . . . . . . . . . . . . . . . . . . 10.0 10.6 11.2 11.1

Ash (0/0) 1.50 . . . . . . . . . . . . . . . . . . . . . . . . 1.53 1.47 1.51 1.55

Protein (o/o, as is M. B.) . . . . . . . . . . . . . . . 11.9 12.0 11.8 12.2

Protein (o/o, 12,0°/0 M. B.) . . . . . . . . . . . . . . 11.6 11.8 11.7 12.1

Flour characteristics (milled in Buhler Mill MLU-202):

Flour extraction (o/o) . . . . . . . . . . . . . . . . . 72.0 71.0 72.3 75.6

Ash (o/o) 0.53 . . . . . . . . . . . . . . . . . . . . . . . . 0.40 0.41 0.46 0.46

Protein (o/o, 13.0°/0 M. B.) . . . . . . . . . . . . . . 10.8 10.7 10.8 11.1

Wet gluten (o/o) . . . . . . . . . . . . . . . . . . . . . . 28.6 29.6 29.8 31.2

Amylogram peak viscosity (BU) . .......655 790 760 800

Farinogram:

Absorption (o/o) . . . . . . . . . . . . . . . . . . 63.3 63.2 62.0 63.5

Peak time (min.) . . . . . . . . . . . . . . . . . 4.0 6.5 5.25 6.0

Mixing tolerance index (BU) ... , . . . 20 30 30 25

Stability (min. )........ . . . . . . . . . . . 15 13 12 16

Calorimeter (BU) . . . . . . . . . . . . . . . . . 71 68 66 74

Extensogram:

45 minutes

Extensibility (mm.)... . . . . . . . . . . . . . . 200 207 200 215

Resistance . . . . . . . . . . . . . . . . . . . 265 350 290 320

Area (sw. cm.) . . . . . . . . . . . . . . . . . . . . . 116 156 146 142

135 minutes

Extensibility (mm.).... . . . . . . . . . . . . . 189 203 207 204

Resistance . . . . . . . . . . . . . . . . . . . . . . . . 318 390 331 382

Area (sq. cm.) . . . . . . . . . . . . . . . . . . . . . 130 178 158 175

SOURCE U S Wheat Associates, “U S Wheat End Use Quallty Con ference,” published proceedings, Washington, DC June 1986

31.2

16.1

11.4

1.44

12.0

11.9

28.9

16.5

10.9

1.55

11.8

11.6

71.9

0.43

10.9

30.0

600

73.4

0.44

10.5

20.4

700

62.1

6.5

25

15

69

60.1

10

17

51

219 185

310 330

144 122
84

also exist between industries concerning which

factors are included in contracts. The factors

having limits included in contracts by domestic processors are similar to those of their overseas counterparts, however.

A number of factors currently in the soybean

standards are not considered important by

processors. These include class, test weight,

and splits. Moisture and heat damage are considered the most important factors by domestic processors, while overseas processors consider moisture and foreign material as important.

Important Attributes Not in

Standards

No one set of quality attributes—e.g. high v.

low protein or strong v. weak flour-meets the

demands for all wheat products. Domestic millers do agree, however, that at least eight factors are important no matter what the end-product may be: protein, mycotoxins, alpha amylase,

falling number, pesticide residue, hidden/dead

insects, flour protein, and bake test. Overseas

millers differed by region of the world in their

response to which attributes are important. Nevertheless, four factors were common across all

regions: protein, pesticide residue, falling number, and dough handling tests. The Far Eastern countries considered these factors to be of

greater importance than other regions of the

world.

Domestic and overseas wheat millers indicate that additional tests are needed. Falling

number and pesticide residue were the items

most often identified by both groups. Overseas

millers also specified dough handling tests such

as farinograph and alveograph as important additional tests, while domestic millers indicate

a strong preference for a test for hidden/dead

insects.

Determining which attributes are important

for corn is industry-dependent except in areas

regarding wholesomeness, health, and safety

concerns. Quality attributes vary by requirements of each corn industry, Items such as

stress cracking, breakage susceptibility, and

hardness are more important to wet and dry

millers than to feed manufacturers. Attributes

such as pesticide residue, mold, mycotoxin, and

hidden/dead insects are important to all industries.

Commonality of important quality attributes

is more evident in soybeans than in wheat or

corn between domestic and overseas processors. The most important attributes are protein,

oil, and free fatty acid content.

Uniformity Between Shipments

The grain system’s ability to deliver the important quality attributes consistently is as important as the attributes themselves. Quality

fluctuations between shipments significantly

influence purchasing decisions. Problems with

uniformity are especially acute in wheat and

corn. Uniformity between shipments will become more important as processing technologies become more sophisticated and more enduses are found for each grain.

In wheat, overseas millers indicate that the

factors contained in the wheat standard that

are most affected by lack of uniformity are moisture, test weight, dockage, and live insects. With

the exception of dockage, uniformity in these

factors was also considered the most important by domestic millers. Protein, dough handling tests, and the bake test were also identified as items of concern.

In corn, moisture was the most important uniformity concern, followed by damaged kernels,

Mycotoxin was considered important by all

three corn industries, with other concerns being expressed for items of particular interest

to each industry.
85

1.

2.

3.

4.

5.

CHAPTER 4

Brekke, O. L., “Edible Oil ProcessingIntroduction,” Handbook of Soy OiZ Processing

and Utilization, D.R. Erickson et al. (eds,), ch.

5 (St. Louis, MO and Champaign, IL: American

Soybean Association and the American Oil

Chemists Society, 1980).

Canada Grains Council, “Wheat Grades for

Canada—Maintaining Excellence,” Winnipeg,

MB, Canada, 1985.

“Feed Marketing and Distribution,” 1987 Reference Issue, Feedstuffs 69(31):6, 1987.

May, J. B., “Wet Milling: Process and Products,”

Corn Chemistry and Technology, S.A. Watson

and P.E, Ramstad (eds.) (St. Paul, MN: American Association of Cereal Chemists, 1986).

Paulsen, M. R,, “Grain Quality Attributes for

REFERENCES

Corn Dry Milling,” background paper prepared

for the Office of Technology Assessment, U.S.

Congress, Washington, DC, 1988.

6, Perry, T. W,, “Grain Attributes for the Feed Industry,” background paper prepared for the Office of Technology Assessment, U.S. Congress,

Washington, DC, 1988,

7. Pomeranz, Y., and Shellenberger, J. A., Bread

Science and Technology (Westport, CT: Publishing Co., Inc., 1971).

8, U.S. Wheat Associates, “U.S. Wheat End Use

Quality Conference,” published proceedings,

Washington, DC, June 1986.

9. Wheat Flour Institute, “From Wheat to Flour, ”

revised cd,, Washington, DC, 1981.
Chapter 5

The Changing Role of
Content s

Page

Quality in the Market Place . 89

Changing Nature of Markets–A Case Study in Wheat. . . . . . . . . . . . . . . . . . . 91

Background 91

Product Consumption and Wheat Importation . . . . . . . . . . . . . . . . . . . . . . . . 91

The Dynamics of the Wheat Market. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93

Analysis Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93

Case Study Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98

Chapter 5 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99

Tables

Table Page

5-1.

5-2.

5-3,

5-4,

5-5.

5-6.

5-7.

5-8.

Export Classes of Wheat Categorized by Characteristics and

Country of Origin ● . .... ... ● . ..,..0. . 92

Required Protein Levels for Wheat-Based End Products and

Protein Content of U.S. Wheat Classes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92

Regional Tastes, Preferences, and the Requirements

for Wheat-Based End Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93

Wheat Consumption in Selected Countries, 1984/85 . . . . . . . . . . . . . . . . . 94

Market Shares of Imported Wheat Classes, 1984/85. . . . . . . . . . . . . . . . . . 95

Correlation of Imported Wheat Class Market Shares, Income, and

Domestic Wheat Production, 1984/85 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96

Average Growth Rates of Wheat Class imports by Country, Region,

and World, 1961/62-84/85 ● ****.. .**.*.** ● **..*.. ● ******. ● *,.,..* * 97

Simulated Changes in Wheat Class Market Shares, 1985/95 . . . . . . . . . . . 98
Chapter 5

The quality concerns of each industry using

wheat, corn, and soybeans are identified in

chapter 4. Wheat, by its very nature, is the most

complex of the three grains in terms of defining quality because of the vast array of products and processing technologies involved.

Quality requirements differ not only by type

and individual product, but between mills using

the same type wheat to produce flour for the

same type of product. Corn is somewhat less

complex in that fewer products are produced

and quality concerns can be traced to the individual industries, Nevertheless, the quality required by one corn industry is not necessarily

important to others, so decisions regarding corn

quality must be assessed in terms of major

usage. Quality concerns of different industries

using wheat are somewhat offset by the fact

that different types of wheat exhibit different

properties. Soybean quality is the least complex,

because the vast majority of soybeans are used

to produce oil and meal,

The varying quality requirements exhibited

by these industries, especially for wheat, highlight the need for the United States to become

more aware of individual industry requirements if the goal is to produce and deliver highquality grain, The Nation has developed the

reputation as a consistent supplier for any type

and quality of grain desired; to become a supplier of high-quality grains, it must become

more quality-conscious and develop a reputation as a supplier of high quality. The U.S. grain

industry must understand the specific requirements of its customers in order to deliver the

quality requested and must become more aware

of the dynamic issues surrounding the qualities required by the marketplace. Areas such

as technological advancements in processing

technologies, Government policies, customer

preference, development of new finished products, and consumption patterns all affect customers’ purchasing decisions and their definition of quality at any one point in time.

QUALITY IN THE MARKETPLACE

High quality, as defined by the specific attributes required by each industry, is constantly

changing. But the ability to produce and deliver high-quality grain can mean more than

just providing grain that meets specific test results. What constitutes high quality from the

customer’s point of view can range from special handling (low-temperature drying of corn)

to the uniformity of specific attributes within

and between shipments. The importance of the

latter was evident in the OTA survey results

and in the statements by overseas wheat millers

(ch. 4).

The OTA survey specifically asked respondents to rank the importance of uniform quality

between shipments. Domestic and overseas respondents considered uniformity as being important even though they differed on which attributes were more critical. Overseas millers

also indicated the importance of uniformity:

Canada and Australia stress uniformity between shipments and this often accounts for

wheats from these countries being considered

first choice.

Even identifying the important quality attributes for specific industries is not simple. Some

traditional measuring technologies are not accepted by all industries producing the same

product. In the OTA survey, tests for rheological properties (extensograph, alveograph, and

mixograph) were considered more important

by overseas wheat millers than by domestic

89

88-378 - 89 - 4
90

ones. Though overseas millers considered these

tests key, their importance varies by region of

the world. Paul Clark, for example, has indicated that in trying to identify and establish soft

wheat flour quality characteristics, Archway

Cookies, Inc., found not only that companies

had different quality requirements but that

different companies keyed on different analytical tests for performance parameters (3).

As processing technologies become more sophisticated through automation or as more

demanding qualities are required for finished

products, the need for specific attributes within

well-defined ranges becomes more critical.

Technologies for baking bread, rolls, and sim1 ilar products in large bakeries have advanced

significantly. While bread can be made by hand

using low-protein wheat, large dough mixers

I and other equipment found in large automated

! bakeries place too much stress on the low1 protein flour, which results in unacceptable fin-

, ished products and the need for different attributes. The way the flour will be baked plays

a very important role in determining the specific values for the various attributes required. ,

In addition to advances in processing technologies, technological advances in other areas

can have an impact on the quality required by

different industries. For many years, highprotein wheats have been blended with lowprotein wheats to strengthen flour. More recently, vital wheat gluten, a product containing 75 to 80 percent protein, has been used as

a flour fortifier. The recent expansion of vital

wheat gluten production is the result of technological improvements in breadmaking, population growth, and increasing urbanization in

some countries. Vital wheat gluten in these nations has become more attractive than higher

priced, imported wheat.

Many countries striving to become self-sufficient in wheat production are producing vital wheat gluten to fortify their locally produced

low-protein wheat. Some European processors

are also producing isoglucose, a sweetener and

sugar substitute, from wheat starch (that portion of the wheat kernel remaining after the gluten is extracted), similar to corn sweetener’s

use in the United States.

Corn, which has always been considered

from a feed point of view, is beginning to experience pressures in areas similar to those experienced by wheat. As feed manufacturing

becomes more sophisticated and automated,

along with the need for strictly controlled balanced diets especially in the poultry industry,

the demand for quality attributes and consistency in delivery is of increased importance.

In other cases, individual dry and wet corn milling companies are placing more stringent demands on the quality of corn they purchase.

Companies are contracting with farmers to

grow certain varieties and provide special handling, such as low-temperature drying.

Traditional quality attributes, even though

varied, thus may be influenced by technological advances, economic concerns, and Government policies here and abroad. For the United

States to produce and deliver high-quality grain,

it must not only become increasingly aware of

concerns over quality expressed by domestic

and overseas industries and match quality to

their wishes, but it must understand why importers purchase grain in the first place.

The findings in chapter 4 could lead to the

conclusion that the United States should stress

developing high-protein wheats. Yet the expanded use of vital wheat gluten in some countries to obtain self-sufficiency provides a

completely different picture. Knowledge of customer preference, consumption patterns, and

the role of Government policies is critical when

considering what direction the United States

should take. The rest of this chapter examines

these areas using wheat as an example.
91

CHANGING NATURE OF MARKETS-A CASE STUDY IN WHEAT

As the intensity of competition in grain markets increases, so does the differentiation of important quality characteristics. Because of the

dynamic nature of wheat markets, OTA analyzed the demand for wheat quality characteristics in international markets. The analysis had

two specific objectives—to identify the extent

to which market shares are determined by factors such as relative prices, income, preferences, and other factors, and to analyze preferences for wheat by quality factors and estimate

changes in these preferences. *

Background

Various types of wheat are produced around

the world based on conduciveness of the local

climate. For example, the semiarid climate

found around the Mediterranean Sea is particularly suitable for production of Durum wheat.

Environmental factors including rainfall, temperatures, soils, available nutrients, and topography influence and cause wide variety in such

wheat characteristics as protein content, test

weight, and kernel size. Genetics is also a major factor in wheat characteristics. Plant breeding programs differ greatly from one producing area to the next, resulting in wide variations

in inherited attributes. Differences in environment and genetics among wheat-producing areas

of the world or within a country result in wide

variations in the characteristics of wheats produced, even among those of the same general

type.

Numerous classes of wheat are available from

the major wheat-exporting countries of Argentina, Australia, Canada, France, and the United

States (see table 5-1). Although each exports one

or more wheat class, the United States is alone

in exporting five classes in significant amounts.

Hard Red Winter (HRW) has always been the

dominant class in U.S. wheat exports, followed

by Hard Red Spring (HRS); White and Soft Red

*The analysis is based on William W. Wilson, Paul Gallagher,

and Jean Riepe, “Analysis of Demand for Wheat Quality Characterist ics, ” prepared for the Office of Technology Assessment,

U.S. Congress, Washington, DC, 1988.

Winter (SRW), in varying arrangements—the

second through fourth positions. Durum is consistently the class with the lowest export volume. Each of the remaining exporter countries

is known for one dominant class or, in the case

of France, type. Argentina predominantly exports Trigo Pan whereas Canada has established a reputation with high bread-making

quality Canadian Western Red Spring (CWRS).

France, a member of the European Community

(EC), exports soft wheats. Australian Standard

White is by far the dominant class in Australian

wheat exports.

The quantity and quality of protein is the most

important attribute of wheat in determining

end-use suitability. Table 5-2 shows the required

protein levels of typical American wheat products and protein ranges for U.S. wheat classes.

The overlapping of class protein ranges portrays the possibilities of class substitutions.

Differences between protein ranges and realization of protein quality differences between

classes reveal the inability of wheat classes to

be perfectly substitutable or homogeneous from

a technical perspective.

Product Consumption and Wheat

importation

Consumers generally prefer end products that

make good use of the characteristics of wheat

grown in their local or regional area. Tastes

and preferences thus tend to be regionalized

by climate and culture (l). In the Mediterranean

area, for instance, where Durum wheat is

grown, products typically consumed include

bread, couscous, bulgur, and fereek, all of

which are made from Durum alone or in a blend

with common wheat. The Far East provides

another example of this behavior. Vast amounts

of soft wheat are grown in this region so that

noodles, chappatis, and steamed breads join

rice as common consumer products.

Flour millers and other wheat product

providers in importing countries are well aware

of the tastes and preferences in their markets.

Millers are interested in buying wheats that em-
92

Table 5-1 .—Export Classes of Wheat Categorized by Characteristics and Country of Origin

Characteristics

Kernel hardness Bran color Habit

Country/wheat class Hard Medium-hard soft Red White Winter Spring

Argentina:

Trigo Pan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . X x

Fideos and Candaal

Taganrock (Durum)a

Australia:

Prime hard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . X

Hard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . X

Australian Standard White . . . . . . . . . . . . . . . . . .

Australian Standard

White—soft varieties.. . . . . . . . . . . . . . . . . .

Australian Soft. . . . . . . . . . . . . . . . . . . . . . . . . . . .

Duruma

x

x

x

x

Canada:

Canadian Western Red Spring . . . . . . . . . . . . . . . X x

Canadian Prairie Spring . . . . . . . . . . . . . . . . . . . . x

Canadian Utility . . . . . . . . . . . . . . . . . . . . . . . . . . . X x

Canadian Western Red Winter . . . . . . . . . . . . . . X x

Eastern . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x

Western Amber Duruma

France:

By lot specifications . . . . . . . . . . . . . . . . . . . . . . . x x

United States:

Hard Red Spring . . . . . . . . . . . . . . . . . . . . . . . . . . X x

Hard Red Winter . . . . . . . . . . . . . . . . . . . . . . . . . . X x

White wheat . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Western White . . . . . . . . . . . . . . . . . . . . . . . . x

Western Club . . . . . . . . . . . . . . . . . . . . . . . . . x

Soft Red Winter . . . . . . . . . . . . . . . . . . . . . . . x x

Duruma

aDurum lsa highly specialized wheat type generally not classified with others.

SOURCE: Canada Grains Council, ~heafs offbe Wor/d(Winnipeg, MB: 1979)

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x x

x

x

x

x

x

Table 5-2.—Required Protein Levels for Wheat-Based End Products and Protein Content of U.S. Wheat Classes

Uses Sources

Protein content Protein content

Product (percent) Wheat class (percent)

Pasta . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 and above Hard Red Spring . . . . . . . . . . . . . . . . . . . . . . 12-18

Hearth bread . . . . . . . . . . . . . . . . . . . . . . . . . 13-14 Durum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10-16

Hard rolls . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13-14 Hard Red Winter . . . . . . . . . . . . . . . . . . . . . . 9-14

Pan bread . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.5-13 Soft Red Winter . . . . . . . . . . . . . . . . . . . . . . . 8-11

Crackers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10-11 White wheat . . . . . . . . . . . . . . . . . . . . . . . . . . 7-11

Biscuits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.0-11.0

Cake . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9-9.5

Pie crust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-10

Cookies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-9

SOURCES: S. Evans, “Wheat: Background for 1985 Farm Legwlation,” Agriculture lnformat!on BuIletln No 467, Economic ResearchServlce, US Department ofAgrlcul

fure, Washington, DC, 1984, and J. Halverson and L. Zeleny, ’’Criteria of Wheat Quality,” Wheaf Chemistry and Technology. Y Pomeranz(ed) (St Paul,MN

American Association of Cereal Chemists, 1988)

body the characteristics suitable for the desired wheat has been the preferred U.S. wheat class

end products. Table 5-3 provides a guide to re- imported by Far East Asian countries under

gional tastes and preferences for end products Public Law 480, and the region still imports subas well as the required flour protein levels and stantial amounts of White wheats from the

wheat types to produce them. Western White United States and Australia {41 Besides hav-
Table 5-3.—Regional Tastes,

Region

Far East Asia . . . . . . . . . . . . . . . . . . . . .

Middle East and North Africa . . . . . . . .

Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Latin America. . . . . . . . . . . . . . . . . . . .

9 3

Preferences, and the Requirements for Wheat-Based End Products

Major products

consumed

Pan bread

Steamed products

Noodles

Chappatis

Bread

Couscous, Pasta,

Bulgur, Fereek

White pan bread

Rolls

Pasta

Breads

Pasta

SOURCE Canada Grains Council, Wheats of the Workl (Wtnnlpeg, MB 1979)

ing appropriate protein content, White wheats

are preferred because they produce products

with acceptable color,

Wheat importers in regions of high bread consumption have more than one option for achieving protein levels required based on relative

prices and qualities, Government policies, and

other factors (4). If there is sufficient domestic

production of soft wheat, high-quality wheats

can be imported for blending to upgrade the

flour. This is customary in the United Kingdom,

which imports CWRS and HRS for this purpose. In regions of insufficient or no local production, flour millers can import either moderately high-quality wheat, all of which is the

desired protein content, or a combination of

hard and soft wheats to blend together to

achieve the required protein level. In the Mediterranean region, medium-hard White wheats

from the United States and Australia are imported to fill the gap between domestic production and total wheat needs.

The Dynamics of the Wheat Market

International wheat trade has been characterized by change. As a result, there has been

no consistent indication by the market of ideal

wheat quality. Major importers purchase a

variety of classes and grades. Many new importers that have entered the market require

different characteristics from the quality bread

wheats in high demand during the last two decades. Changes in milling and baking technolAverage required

protein level

12-14

10-11

9-11.5

9-1o

Types of - - -

wheat used

Hard Red ‘-

Medium-hard

Soft to Medium-hard White

Soft to Medium-hard White

Durum, medium-hard White and Red

9-11 Durum

10-12 Hard Red, domestic soft

9.5

Durum

10-14 Hard Red, domestic soft

Durum

ogy have resulted in lower protein requirements, while increased sophistication in milling

and baking technology has made knowledge of

the specifications of wheat shipments more important. Generally, the required average flour

protein differs by country and end product, as

indicated in chapter 4.

Developing countries are rapidly becoming

the areas of growth in world market demand

from a total wheat import perspective. Traditional importers such as Japan and Western

Europe have declined in relative importance.

This trend is expected to continue as imports

by developing countries account for a greater

proportion of world trade. Africa and the Middle East have historic wheat consumption

growth rates of 8 percent, compared with 3 percent for Japan and 4 percent for the world.

Related to this is the observation by several

researchers that wheat product consumption

patterns in developing countries differ from the

leavened bread orientation of industrial countries. The demand growth in non-bread-consuming countries has switched the emphasis

in world trade away from high bread-making

quality wheats toward lower priced, lower protein wheats. Technological changes and declining consumption in industrial countries have

also aided this shift.

Analysis Results

Many factors influence demand for quality

characteristics, as indicated. Relative prices,
94

income, domestic production, and preferences

all have an effect.

Relative Prices

One important factor influencing demand for

wheats of different qualities is the variability

in relative prices. Price differences in international markets were relatively small prior to

1973, probably reflecting the supply/demand

situation and the lack of need to distinguish between wheat classes, Since then, differentials

have increased dramatically in nearly all markets, indicating the increased differentiation in

the international market (2). Notable gaps 1

occurred between the prices of stronger wheat

(HRS and CWRS) and all other classes, and the

relative increase in CWRS has exceeded that

of HRS. Embedded in these prices are implicit

values for quality characteristics. Analysis of

these values indicates that significant

premiums exist for Canadian wheats (or discounts for U.S. wheats), that significant implicit !

values exist for spring v. winter planted, and

that the implicit value of protein has been in1 creasing throughout the 1980s.

Income and Domestic Production

With the importance of developing countries

in the growth of the world grain trade, it is essential to examine the role of income in the quality of wheat purchased. In addition, the importance of the level of per capita domestic wheat

production is considered. Countries with

higher wheat production may have different

requirements regarding imported wheat quality than those with little or no domestic production.

Countries representative of wheat producers

and importers with different income levels

were selected for analysis (table 5-4). Bread

prices range from $().4()/kilogram in Pakistan

to $1.88/kilogram in Sweden. Per capita consumption for food ranges from 47 kilograms

in Brazil to 164 kilograms in Greece, compared

with 86 kilograms in the United States.

Previous studies indicate a tendency for highincome countries to use relatively more wheat

for feed (5). The logic is that in times of wheat

surpluses the price differential between wheat

and coarse grains may be reduced to the point

Table 5-4.–Wheat Consumption in Selected Countries, 1984/85

—-

Bread price Real income Wheat consumption;

(cents per (thousand dollars (kilogram per person)

Country kilogram) per person) Total Food

Importers:

Austria. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Denmark . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Germany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Greece. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Ireland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Jordan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Netherlands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Norway . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Pakistan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

South Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Spain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Sweden . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Switzerland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

United Kingdom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Exporters:

Argentina . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Australia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

France . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

61

85

133

96

52

77

151

56

78

173

40

136

49

188

98

53

6.9305

0.0540

7.6354

8.7645

1.5632

3.1068

9.6621

0.9351

7.2426

9.2084

0.2305

1.4330

2.6039

8.0802

11.5979

5.7339

112.848

47,518

342.857

157,437

185.930

210.734

52.216

117.262

132.455

91.787

133.247

69.065

149.702

102,638

121.118

184.422

41 0.0130 152.824

106 7.9079 187.967

129 9.7567 207.043

129 6.0351 233.236

177 12.3430 132.512

71.788

47.518

92.368

77.738

163.819

112.994

51.033

117.262

83.911

79.710

133.247

64.025

103.815

66.307

91.149

97.681

150.332

146.396

107.561

113.706

85.998

SOURCE: Office of Technology Assessment, 1989
95

where feeding wheat becomes economical, and

generally only high-income countries can afford to feed large livestock populations. OTA

analysis indicates that a significant inverse relationship exists between the proportion of wheat

used for food and income. A smaller proportion of wheat is used for food in higher income

countries or they use relatively more wheat for

feed. Lower income countries, on the other

hand, consume a greater proportion of wheat

as food.

Table 5-5 shows market shares by class of

wheat imported. CWRS, HRS, and EC wheat

do relatively well in Western Europe. Correlations between market shares, income, and domestic production were computed (table 5-6).

A number of points are clear. First, market

shares for stronger, high-protein wheats are

positively related with income. Second, market shares of HRW and SRW are inversely related to per capita income. Third, domestic

wheat production is inversely related to HRW

and Argentine shares, but positively related to

the CWRS market share. These results suggest

that income level and domestic production influence wheat import patterns. Countries with

relatively large domestic per capita production

have a tendency to import a greater proportion

of Canadian wheat and less Argentine and

HRW. Lower income countries tend to purchase the less expensive wheats, possibly due

to reduced ability to pay or because they do not

require the characteristics of stronger wheats.

The level of domestic wheat production affects

wheat class market shares, likely reflecting

blending v. filler wheat requirements. Thus, the

tendency is a shift to CWRS by countries with

higher levels of domestic production and a shift

away from HRW.

Preferences

Considerable variation exists among markets

in the wheat classes imported, their relative importance, and historic growth rates. Useful information can, therefore, be gained by analyzing class or quality import demand on a

market-by-market basis. Such an analysis, as

previously noted, shows that relative prices and

income are significant determinants of market

shares. In addition, however, it indicates that

a different preference structure exists for individual wheat classes.

The most prominent shifts are away from the

dominant HRW and toward weaker wheats (EC

and SRW) or stronger wheats (HRS, CWRS, and

Durum) (table 5-7). In the overall world trade

market, preferences shifted from HRW and

toward all other classes. Results from most regional markets are similar. Growing nonprice

preferences for SRW, HRS, and CWRS exist

in Asia. SRW and Durums are gaining preference in Africa relative to HRW. In Japan, HRW

is losing preference to White and HRS. In addiTable 5-5.–Market Shares of Imported Wheat Classes, 1984/85

European

Argentina Australia Canada Community Us .

Country (ARG) (ASW) (CWRS) (EC) HRS HRW SRW White Durum

Brazil . . . . . . . . . . . . . . . . 0.15

Denmark . . . . . . . . . . . . . 0.00

France . . . . . . . . . . . . . . 0.00

Germany. . . . . . . . . . . . . 0.00

Greece . . . . . . . . . . . . . . 0.00

Japan . . . . . . . . . . . . . . . 0.00

Jordan. . . . . . . . . . . . . . . 0.13

Netherlands . . . . . . . . . . 0.04

Norway . . . . . . . . . . . . . . 0.27

Pakistan . . . . . . . . . . . . . 0.02

South Africa. ., . . . . . . . 0.03

Spain. . . . . . . . . . . . . . . . 0.00

Sweden. . . . . . . . . . . . . . 0.00

Switzerland . . . . . . . . . . 0.00

United Kingdom . . . . . . 0.00

0.00

0.00

0.00

0.00

0.00

0.17

0.15

0.00

0.00

0.60

0.93

0.00

0.00

0.00

0.00

0.27

0.00

0.73

0.66

0.00

0.23

0.00

0.10

0.53

0.00

0.00

0.00

0.60

0.36

0.93

0.01

0.00

0.00

0,00

0.00

0.00

0.01

0.00

0.19

0.14

0.00

0.00

0.40

0.63

0.00

0.00 0.54 0.01 0.00

0.00 0.00 0.00 0.00

0.02 0.00 0.00 0.00

0.33 0.00 0.00 0.00

0.00 0.00 0.00 0.00

0.17 0.22 0.00 0.18

0.00 0.69 0.00 0.00

0.69 0.00 0.01 0.00

0.00 0,00 0.00 0.00

0.00 0.00 0.04 0.17

0.00 0,02 0.00 0.00

0.00 0.00 0.00 0.00

0.00 0.00 0.00 0.00

0.00 0.00 0.00 0.00

0.06 0.00 0.00 0.00

0,00

0.00

0.23

0.00

0.00

0.00

0.00

0.14

0.00

0.00

0.00

0.00

0.00

0.00

0.00

SOURCE: Office of Technology Assessment, 1989,
96 I IIIIIIIII IIIIIIII IIIIIIII IIIIIII IIIII IIII IIII III I I I I m

mlI

al 0

.-=0
97

I

. .

In

In

m

7j
98

tion, CWRS, though preferred, is losing relative to White and HRS. But the Latin American

market has a strong preference for HRW. Similarly, there are strong and relatively stable

preferences for HRW in U.S. domestic markets,

Simulations of changes in wheat class market shares that extrapolate historical preference

changes identify important changes (table 5-8).

The important underlying assumption is that

of constant relative prices. The SRW share of

the Asia market is expected to grow by 14 percent by 1995 with losses between 2 and 5 percentage points for most other competitors. In

Japan, the HRS share increases by 5 percent.

HRW consistently loses between 2 and 4 percent in all regional import markets except Latin

America.

Case Study Summary

The analysis measured and compared underlying nonprice shifts in preferences occurring

through time. Several regional shifts of particular interest include:

● increases in SRW, HRS, and CWRS in Asia;

● increases in SRW and Durum in Africa,

and decreases in HRW;

• decreases in HRW in the Middle East; and

● decreases in SRW in Latin America and

increases in HRW and spring wheats.

In general, the world market is experiencing

nonprice shifts in preferences away from HRW

and toward soft wheats (SRW and EC) and HRS.

Numerous changes in market shares of wheat

classes are expected in specific markets, and

in some cases these are relatively large, In general, these changes reflect the shifts in preferences. However, despite the shift in preferences

toward HRS, growth in this market will be

stalled due to the current high price for this

class relative to others.

In general, the results indicate that quality

differentials are important in international markets, affecting both relative prices and shares

in particular markets. Given the unique demands for different classes of wheat and the

key underlying shifts in imports, the ability to

differentiate wheats of different classes is an

important component of international competition. A particular concern, however, is that

in many markets the preferences for U.S.

wheats are distinctly different from like wheats

of competitors. In some markets, imports tend

to shift toward stronger wheats as income increases. This is not generally true, however, and

in fact in some cases higher incomes through

time result in more imports of softer wheats,

Thus, strong wheats are not necessarily a luxury, and softer wheats are not necessarily inferior.

Table 5.8.—Simulated Changes in Wheat Class Market Shares, 1985/95 (percent)

Region Class: HRW SRW

Africa:

1984 share . . . . . . . . . .

1985-95 change . . . . . .

Asia:

1984 share . . . . . . . . . .

1985-95 change ... , . .

Japan:

1984 share . . . . . . . . . .

1985-95 change . . . . . .

Latin America:

1984 share . . . . . . . . . .

1985-95 change . . . . . .

Middle East:

1984 share . . . . . . . . . .

1985-95 change . . . . . .

United States:

1984 share . . . . . . . . . .

1985-95 change . . . . . .

World:

1984 share . . . . . . . . . .

1985-95 change . . . . . .

14.5 19.9

–3.1 1.6

7.2 18.3

–4.0 14.3

22.9 –

–2.0 –

48.0 5.4

0.5 –0.2

12.0 3.4

–2.5 –0.3

48.7 25.0

– 1.0 0.0

19.1 7.1

– 1.3 1.7

WHI EC ASW

. 46.6 —

— –0.8 –

17.1 — 18.4

–0.7 – –0.1

1.5 2.4 –

–0.1 –0.2 –

9.3 21.9 42,8

0.8 0.6 0.8

7.5 – –

0.6 – –

6.0 18.2 15.9

–0.1 0.5 –0.4

ARG HRS CWRS OUR CDUR

5.0 9.6 4.4

–0.8 0.1 3.0

19.3 — —

–2.3 — –

23.4 – –

–2.5 – –

15,5 2.7 —

1.0 0.8 —

10.7 — –

0.6 – –

— 3.8 –

— 0.1 –

20.2 – –

–0.9 – –

SOURCE Office of Technology Assessment, 1989
99

1.

2,

3.

CHAPTER 5

Agriculture Canada, AnaZysis of Strategic Mixes

for Canadian Wheat Exports, Guelph, Ontario,

1980.

International Wheat Council, VVorZd Wheat Statistics, Annual Issues, London, 1960-1985.

A4i)ling and Baking News, “Programs To Improve Flour Quality Showing Promise, ” 67(5]:

l&30, 1988.

REFERENCES

4. Oleson, B., “Price Determination and Market

Share Formation in the International Wheat

Market, ” unpublished Ph.D. dissertation,

University of Minnesota, St. Paul, MN, 1979.

5. Woodhams, R., Wheat to 1991: Adapting to

Oversupply, Special Report No. 1070 (London:

The Economist Intelligence Unit, 1986).
Chapter 6

Genetics
Contents

Page

Wheat . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..103

Objectives of Genetic Selection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ......103

Genetic Influences on Wheat Quality . ...............................10 4

Role of Public and Private Wheat Breeders. . .........................106

Variety Release Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .........106

Wheat Breeding Technology . . . . . . . . . . . . . . . . . . . . . . . . ...............108

Soybeans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .....................114

Objectives of Genetic Selection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ......114

Genetic Influences on Soybean Quality . .............................11 5

Role of Public and Private Soybean Breeders . ........................118

Variety Release . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..............120

Soybean Breeding Technology . . . . . . . .............................,.122

Corn. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..................123

Objectives of Genetic Selection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. ....123

Genetic Influences on Kernel Quality . . . . . . . . . . . .....................125

Role of Public and Private Corn Breeders . . . . . . . . ....................127

Variety Release Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...........128

Corn Breeding Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .........129

Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...........................130

Chapter preferences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ................131

Figure

Figure No. Page

I U.S. Corn Yields and Kinds of Corn Over Years . ...................124

Tables

Table No. Page

6-1. Grain Yield and End-Use Quality Characteristics of Four Wheat

Varieties in North Dakota, 1981-85 . . . . . . . . . . . . . . . . . . . . ...........104

6-2. Environmental Influence on Important End-Use Quality Traits in

Wheat . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. ...105

6-3, Generational Advance in a Typical Pedigree Wheat Breeding Program .108

6-4. Breeding and Seed Increase History for Stoa Hard Red Spring Wheat .110

6-5. Genotypic Correlations in Soybeans . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...117

6-6. Mean Performance of Check Cultivars and Breeding Lines With

Higher Percent Seed Protein . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ......118

6-7. Soybean Cultivars Released by Public Institutions in the United States

and Canada Prior to 1976 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....121

6-8. Soybean Cultivars Released by Private Companies Under Plant Variety

Protection Certificates, April 1973-November 1987 . .................121

6-9. Summary of Studies on Breeding Gain in Corn . ....................125
Chapter 6

The Genetics of Grain Quality

The most fundamental starting point for efforts to improve the United States’ ability to

produce, handle, and deliver quality grain is

the seed, The role of plant genetics cannot be

overstated, Indeed, if the genes for physical and

intrinsic quality are not present, little can be

done in the rest of the system to improve quality.

Quality is influenced by plant genotype and

the environment in which the plant is grown,

Genotypes often can be altered using classical

plant breeding methods so that changes in quality result, This has not generally been the aim

of breeders, however, as their focus on increased yield often means quality factors such

as protein or oil content remain the same or

even decline unless special incentives are present for the grower. Likewise, some environmental factors can be changed, such as soil fertility through fertilizer application or water

status through irrigation. Many others, however, cannot be affected, such as weather and

soil type.

Plant breeding can offer a partial solution to

problems caused by environmental variation,

through consideration of genotype-environment interactions, This chapter considers for

wheat, soybeans, and corn:

●

●

●

●

the objectives of genetic selection;

direct genotypic influences on physical and

intrinsic quality and the interactions between genotype and environment that affect seed quality;

the procedures, tests, and criteria for releasing seed varieties; and

emerging plant breeding technologies to

improve quality.

The wheat plant and the grain it bears have

evolved over many centuries into the plants

grown today. Early humans over thousands of

years selected types of wheat with the largest

seeds, leading to the wheat grown in crop agriculture in Europe and Asia prior to migration

of people to North America in the early 17th

century. Early North American immigrants

brought wheat seed with them that had been

selected from variable native species with

different characteristics that were used to make

different foods. This led to the different classes

of wheat with different end uses now grown

in the United States.

Differentiation of end-use characteristics of

these different wheats is important. Because

the science of wheat breeding has many common points across wheat classes, however, this

section is organized by topic area, Any important differences by class will be highlighted in

the discussion. ’

Objectives of Genetic Selection

Wheat breeders have two major objectives:

to raise yield and to increase end-use quality.

A secondary objective is to improve resistance

to diseases, pest, and environmental stress.

Reaching these goals is difficult. High yields

are an important attribute that farmers demand

in a new variety, On the other hand, millers

desire wheat with good end-use characteristics,

such as high protein content, Yet an inverse

genetic relationship exists between yield and

protein content in wheat.

‘This section is based on Jack F. Carter et al., “wheat Ilreeding Issues Related to Grain Quality, ” prepared for the Office of

Technology Assessment, U.S. Congress, Washington, Il(;, 1988.

103
104

The primary goal of wheat breeders is usually increased yield, with protein and other enduse quality factors maintained at acceptable

levels. Table 6-1 illustrates this point with new

Hard Red Spring (HRS) varieties produced in

North Dakota and tested from 1981 to 1985.

Waldron is the check or control variety, and

each new variety exceeded Waldron in yield

by 6 to 15 percent. To achieve higher yield, however, protein percentage decreased by as much

as 0.5 percent on average. Other selected enduse quality factors stayed about the same or declined compared with the check variety.

This is not to suggest that improvements in

certain quality have not been made. In Hard

Red Winter (HRW) wheat, traits that have significantly improved include test weight, flour

yield, mixing time, loaf volume, and crumb

grain. But protein percentage has remained essentially constant (16). In HRS and Durum, the

same characteristics have improved.

Genetic Influences on Wheat Quality

Table 6-2 lists important end-use quality

traits, the estimated number of genes thought

to control a trait, and the degree a trait is influenced by the environment. Environmental variation influences the expression of all heritable traits. Those whose expressions are largely

influenced by the environment have low heritabilities, i.e., the majority of the variability for

that specific trait is due primarily to the environment and not to the genotype.

Functional quality is the interaction of all the

traits in table 6-2 plus others. It is impossible

to select one trait individually and interpret enduse quality. Final bread-making quality is the

total interaction of all these traits (23). Cereal

chemists and wheat breeders use these traits

to estimate end use. If all the traits fall into identified accepted categories, the final product is

usually satisfactory.

Yield-Quality-Resistance Interactions

Grain yield, grain quality, and disease resistance cannot be separated in a wheat breeding

program. Each fits into a package that is released as a new variety. Wheat lines are not

developed that feature improvements in some

traits and the loss of others. Wheat diseases,

lodging, and environmental stress produce

shriveled grain that reduces grain yield, lowers

test weight, and decreases flour milling yield.

However, the best bread-quality wheat is not

grown by farmers unless it yields competitively.

As noted, yield and quality if evaluated sepTable 6-1 .—Grain Yield and End-Use Quality Characteristics of

Four Wheat Varieties in North Dakota, 1981.85 Average

Location

Cultivar Dickinson Williston Minot Barrington Langdon Fargo Mean

SOURCE: Richard Frohberg, “Wheat Breeding at North Dakota State University,” presented at U.S Wheat End-Use Quality Conference, Fargo, ND, 1986
Table 6-2.—Environmental Influence on Important

End-Use Quality Traits in Wheat

No. Environmental

Trait of genes influence

Physical quality:

Hardness . . . . . . . . . . . . .

Color . . . . . . . . . . . . . . . . .

Kernel size . . . . . . . . . . . .

Test weight . . . . . . . . . . .

Flour yield . . . . . . . . . . . .

Biochemical quality:

Protein percentage . . . . .

Absorption . . . . . . . . . . . .

Mixing tolerance . . . . . . .

Loaf volume . . . . . . . . . . .

Crumb grain . . . . . . . . . . .

Crumb color. . . . . . . . . . .

Loaf symmetry. . . . . . . . .

Gluten strength . . . . . . . .

Pasta quality . . . . . . . . . .

3 genes

3 genes

many

many

many

few-many

many

many

many

many

many

many

few

many

moderate

moderate

large

large

large

large

moderate

large

large

large

moderate

moderate

moderate

large

SOURCE: Office of Technology Assessment, 1989

arately as unique entities are usually negatively

correlated, primarily due to the negative association between protein percentage and grain

yield (35). This negative correlation in soft

wheats is extremely beneficial as it allows for

concurrent progress in these traits. Low protein percentage is a requirement for producing high-quality end products from soft wheat,

Genotypic variability is generally interpreted

as the range of expression for a specific trait,

i.e., protein percentage can range from 7 to 30

in wheat, Wheat has not been investigated adequately to determine the range of available genetic variation and to identify the appropriate

breeding procedure for each of the characters

controlling quality. Wheat germplasm collections have been evaluated primarily for agronomic characters, not for those controlling

quality.

Wheat is a hexaploid species and has a large

amount of genetic variability. Protein percentage is probably the most frequent quality component measured, and it can be improved by

crossing with distant relatives of wheat. A practical limit exists, however, because twice as

much energy is required to produce a gram of

protein as a gram of carbohydrate (42), In the

future, as more is understood about protein

105

quality, it may be more efficient to allow the

Hard Red Winter wheat plant produce primarily starch, and then to blend in protein to increase its percentage in wheat flour. The primary use of the genetic variability in wheat in

the short term (especially in HRW programs)

is to introduce new genes to protect plant

health.

Genotype v. Environment

Genetic variations, environment, and the interaction of these components affect the final

expression of a trait. Genetic-environmental interaction is produced when different genotypes

respond differently to different environments,

The HRW variety Newton, for example, produces acceptable quality in western Kansas, but

is poorer in eastern Kansas due to disease, in

Oklahoma because of late maturity, and in eastern Colorado because of susceptibility to root

rot. Environment can be more responsible, in

many cases, than the varietal reactions for increased fluctuations in quality (34,41). Genotype-environment interaction is of crucial importance because most HRW wheat varieties

are grown across a diversity of environments,

and stable quality performance is desired, In

addition, more extensive testing programs are

required to identify stable genotypes,

Interactions between physical and biochemical characters are frequent, and usually negative, The most noted association involves protein, as discussed earlier. This makes it difficult

to improve both traits. However, protein percentage and protein quality are not correlated

(23), It is possible to have extremely high protein and very low protein quality. The HRW

wheat variety Atlas is a good example. Other

interactions that affect progress in a breeding

program include kernel size and flour yield,

high temperatures at grain filling, and weaker

mixing tolerance. Susceptibility to diseases and

preharvest sprouting have negative effects on

quality. Associations between chromosomes

themselves affect quality. For example, attempts to breed resistance for wheat streak

mosaic virus have been unsuccessful because

the resistant genes for the disease are closely
106

linked to genes that have a negative effect on

quality (38).

Role of Public and Private

Wheat Breeders

Public and private wheat breeders develop

and prepare release of new wheat varieties. One

main difference is that public breeders generally work with wheat only for the State or regions within it where they are employed,

whereas private breeders develop wheat varieties for one or more States plus foreign countries where the company may have a subsidiary. Another difference is that private breeders

can respond more quickly to sudden needs or

perceived opportunities for research and development.

One point currently under debate is whether

public breeders should only develop basic germplasm and let private breeders use the germplasm to develop the varieties for commercial

sale—a system more or less followed in Europe. An argument can be made for such a role

differentiation. As the next section points out,

however, currently the return on investment

in developing new wheat varieties has resulted

in many seed firms eliminating wheat breeding from their research activities.

Public funding of wheat plant breeding is derived (in order of importance) from State legislatures, Congress, farm commodity organizations, and foundation seed royalties. Funding

is often closely related to the economic health

of the State. Overall, funding was relatively stable from 1950 to 1980, but it has declined in

real terms since then. State Agricultural Experiment Station (SAES) funding for wheat breeding programs can vary from 35 to 75 percent

of the total SAES budget. Some States have begun charging royalties on seed of new varieties

in order to help fund plant breeding research

as competition increases for use of limited public funds.

Private funding for wheat improvement research is corporate funding to produce a product for sale and, it is hoped, a high return on

investment. The financial support and resources

may be more generous relative to public funding, but they can be decreased or terminated

quickly if return on investment is inadequate.

For example, many large and small seed companies initiated breeding programs soon after

the passage of the Plant Variety Protection Act

in 1970. Wheat breeding did not produce high

rates of return for most, however; and today

only a few large firms have programs on conventional wheat varieties and/or hybrid wheat.

Thus most new wheat varieties are developed

by the public sector.

Variety Release Procedures

Public and private wheat breeders attempt

to create varieties excelling in both agronomic

and end-use characteristics. The public breeder,

who produces most of the new varieties, receives guidance on criteria for release from the

individual State Agricultural Experiment Stations. In turn, the SAES bases its recommendations on the national policy on release of seedpropagated plants adopted by the Experiment

Station Committee on Policy. However, the policy is guidance only and States may and do vary

from it. Private wheat breeders are influenced

by the principles of this policy as well and by

the demands or needs of farmers.

The principles used to determine whether to

release superior experimental genotypes are

based on whether the candidate for release is

better in one or more agronomic or quality characteristics as compared with “check” or “control” commercial varieties. But market incentives to farmers and in turn to the wheat breeder

signal advancement and release of experimental progenies having unusually high grain

yield and not necessarily meeting minimum

standards of other agronomic and end-use characteristics. The market seldom rewards farmers

who produce wheat varieties with excellent

end-use characteristics.

Public Breeder

The general procedures used to select a variety for release are as follows:

● The plant breeder makes crosses of desired

parents and progenies and evaluates them
107

●

●

●

●

●

●

●

over 5 to 8 years for agronomic and enduse characteristics. Those characteristics

are compared with a “standard check” or

“control” variety, usually a commercial variety under production over a significant

acreage in the target geographic area.

The breeder evaluates and justifies the

release and name of the experimental

progeny.

A Variety Release Committee (VRC) of scientists of the wheat breeding team, appropriate extension specialists, representatives from appropriate commodity and

regulatory agencies, and the Experiment

Station Director recommends release or rejection of the experimental line proposed

for release.

If the VRC cannot agree, the final decision

is made by the Director of the Experiment

Station.

The agricultural experiment station is usually considered the “breeder of record” for

purpose of Plant Variety Protection and

royalties.

Basic seed stocks of the new variety are

increased to Foundation seed by SAES or

a quasi-nonprofit agency for the public

variety.

Elite growers increase the new variety to

Registered and Certified seed for use by

commercial growers.

The breeder deposits a small amount of

breeders’ seed in the Germplasm Bank at

the National Seed Storage Laboratory.

Private Breeder

Based on mail inquiries to private breeders,

the policies and procedures on variety development and release seem to be as follows:

. The wheat breeder makes hybrids of desired parents and progenies are evaluated

for various agronomic and end-use characteristics. Most of the hundreds of progenies from the original “cross” of the two

parents are discarded at each testing stage,

but a few superior ones are selected and

advanced after several generations as

worthy of further evaluation.

• A preliminary test is conducted of appar-

●

●

●

●

●

●

ently superior wheat progeny lines at several locations, for 1 year, and each entry

is evaluated for agronomic and end-use

characteristics. Many wheat lines are discarded as not worthy of further testing,

An advanced test is conducted at additional locations, again for 1 year, with continued evaluation and further discard of

some lines and retention of the most superior ones.

Elite testing is conducted at even more

locations for 2 years with continued agronomic and end-use quality evaluation at the

private company quality laboratory and at

independent quality laboratories. The latter might include Class end-use quality laboratories, private or public agencies, or a

cooperative facility with the milling industry (e.g., flour and bread evaluation by the

Spring Wheat Quality Advisory Committee (SWQAC)).

Wheat progenies (lines) excelling in the

elite testing receive Precommercial Nomination based on 2 years of testing and satisfactory end-use quality scores. A Committee or Director of Research, Crop Director,

Cereal Chemist, Breeder(s), and Crop Marketing Analyst accepts the variety as precommercial if all agronomic, disease, and

quality end-use data are satisfactory,

A third year of elite testing is conducted,

including evaluation by an independent

agency such as SWQAC, Breeders seed is

produced to continue seed increase advancement, if approved.

The same Committee that considered precommercial status evaluates again and, if

approved, Foundation seed is produced

and sales divisions are notified. The Plant

Breeding Division retains control of the

prospective variety. If release is approved,

seed is distributed to sales divisions for registered and certified seed production. The

Director of Plant Breeding and the Crop

Director sign the official release announcement.

A Commercial Number (equivalent to variety name) is assigned. Seed is conditioned

at company plants and allocated to District

Sales Managers who establish sales goals
108

for each sales area. Farmer-dealers sell the

seed. The company provides advertising

support.

Wheat Breeding Technology

U.S. public and private wheat breeding programs annually release several dozen wheat varieties, each representing 8 to 15 years of research. The principal wheat-producing States

have had wheat improvement programs for at

least 60 years, and their accomplishments have

been impressive. U.S. wheat yields since 1958

rose from 25.1 to 33.1 bushels/acre, a 32-percent

increase. Comparisons from regional nurseries

indicate a 17-percent genetic gain, accounting

for about half the total yield or 0.2 bushels/year

genetic gain (46). Production technologies—-

including use of fertilizers, herbicides, pesticides, and machinery—accounted for the other

half of the yield increases.

This section provides a general perspective

of wheat breeding by describing some of the

capabilities, methodologies, and limitations of

current and future technologies.

The Breeding Program

Generalizing about procedures is difficult because there are as many permutations and combinations of managing the logistics of selection

and testing as there are programs. Nevertheless, some primary features of wheat breeding

can be described by considering the basic

framework of generational advance and testing (table 6-3).

The genetic variation to begin the breeding

cycle is obtained through sexual recombination

in F1 plants from 200 to 700 crosses per year.

Segregated populations of tens of thousands of

F2 plants, each one a new and distinctive genotype, are grown each year. Genetic segregation

continues in the F3

, F4, and successive selfpollinating generations, diminishing by half

each generation as the genotypes of lines become fixed,

In early generations, selection is based on

traits that are recognized visually or otherwise

evaluated easily, such as plant maturity, plant

height, stem and leaf rust resistance, and general plant appearance. Such selection is considered fairly subjective.

Table 6-3.—Generational Advance in a Typical Pedigree Wheat Breeding Program

Season Generationa Breeding population size Selection/evaluation activities

1 Initial crosses 200 to 700 new crosses per year

2 F1 200 to 700

3 F2 500 to 2,000 plants per F2

population

4 F3 5,000 to 50,000 total plant or

head rows

5 F4 1,000 to 5,000 observation rows

or head rows

6 F5 400 to 1,000 lines in preliminary

yield trials or observation

rows

7 F6 150 to 400 lines in yield trials

8 F7 20 to 50 lines in advanced yield

trials

9-11 F8 5 to 10 elite lines

——.

Some selection among F1s based on additional data or

——

phenotype

Grown as spaced plants, sometimes as bulk populations.

Strong selection between populations and for plants

within populations, visual selection for easily classified

traits

Begin line selection, visual selection, visual selection for

easily classified traits, e.g., height, rust resistance

Continue visual selection with additional traits, possibly

begin protein, few quality evaluations

Testing becomes more quantitative, replicated, multiIocation, initial yield data, quality evaluations

Similar to F5

Yield trials at several locations, complete quality and disease

resistance testing

Extensive yield testing in State and regional trials, complete

disease and quality comparisons to standard varieties,

identification of candidate varieties

Finally, seed increase decisions are made during final evaluation stages and at the time of varietal release.

a ., Flllal generation

SOURCE Office of Technology Assessment, 1989.
109

Selection for each trait further depends on

the time required to measure the trait, the number of plots that must be evaluated to obtain

a reliable estimate of the line’s performance,

the amount of seed required for the test, and

the effect of environment on other traits being

selected.

Selection for quality in early generations and

during preliminary testing is accomplished

mainly by using micro-evaluation procedures.

Cereal chemists and breeders have devised an

array of such tests that correlate with functional

processing quality. Mixograms, cookie tests,

and micro-loaves are examples of tests that can

be done using small samples of wheat kernels,

Improving the Efficiency of

Wheat Breeding

Each breeding program strives to improve the

efficiency of its selection and testing procedures and to understand the available genetic

variation, The dynamics involve a steady flow

of information and data from many sources,

Crossing, selection, and testing decisions are

revised as agronomic, disease, and quality data

from the current season’s nurseries, and area

wheat crop are evaluated.

Experimental design, statistical analyses of

data, and plot and testing equipment are refined

continually. Breeding programs collect enormous amounts of data each year. Much of the

analysis that formerly was done with mainframe computers now is being done with microcomputers. Also, computer programs are being written that greatly facilitate various

organization and data collection activities of

the breeding program.

The impact that a new analytical technique

can have on selection strategy is shown vividly

by the application of near-infrared reflectance

spectroscopy (NIRS) to measure protein and

moisture percentages. NIRS, developed in the

1970s, is rapid, practical, and inexpensive. Protein percentage can be determined on about 200

wheat or flour samples per day with a single

NIRS machine. For a wheat breeding program,

this means that early generation selection for

protein percentage can become routine, substantially increasing the proportion of later generation lines that have the desired protein level.

Replicated yield trials are expensive to conduct. A breeding program must grow several

thousand yield plots each year at several locations. In recent years, small-plot combines have

been developed in which one to two yield plots

per minute can be harvested while maintaining seed integrity of each plot.

Other Quality Considerations

Wheat breeders encounter several breeding

situations in which quality can become a problem. The most common one occurs when selection for one trait causes changes in another trait

or traits, The correlated response can be positive or negative, and the degree can vary from

slight to very strong. For example, the gene in

Durum wheat for white glumes and the gene

for strong gluten strength are located near one

another on the same chromosome. Durum

breeders have used this fortuitous association

effectively to identify strong gluten Durum

lines. In bread wheats, the negative correlation

between grain yield and protein percentage that

exists in many breeding populations challenges

the breeder to find genes that increase protein

percentage or improve the quality of the protein without losing yield potential.

Other situations in which quality can be affected adversely involve the introduction of

genes from related species. The best known

example is the IB/IR wheat-rye chromosome

translocation. The rye chromosome introduced

into wheat carries valuable genes for disease

resistance, but it also can cause problems with

stickiness of bread dough, Problems with test

weight, flour color, and other traits have been

associated with an alien chromosome segment

introduced for disease resistance in several

other cases,

Timetable of Wheat Breeding and

Varietal Seed Increase

Evaluating past progress in wheat breeding,

planning future research, and having some idea

about the possible rates of progress of future

research requires an appreciation of the time
110

required for varietal development, testing, and

seed increase. The breeding and seed increase

schedule for Stoa, an HRS wheat variety recently released by the North Dakota Agricultural Experiment Station, provides an example (table 6-4). Greenhouses, off-season winter

nurseries, and early, coordinated increases of

seed can accelerate this schedule. But it is important to remember that crosses for wheat varieties for the year 2000 are being made now,

12 years before they will be released.

Some future technologies may shorten the

period for varietal development far less than

intuitively might be expected. Much of the

schedule for Stoa is devoted to the initial buildup of seed, to multiyear testing, and to increasing the varietal seed. This process must be done

regardless of how a line was produced initially.

Hybrid Wheat

Much progress has been made during the past

25 years to develop germplasm and techniques

for commercial production of hybrid wheats.

A hybrid advantage for grain yield and other

traits similar to those found in corn, sorghum,

rice, and other crops is the impetus for hybrid

wheat research. Because the farmer must purchase hybrid seed each year—unlike varietal

seed, which can be grown from the previous

year’s seed—the successful development of hybrid wheats also would be the basis for a large

commercial seed industry in the United States.

Several commercial seed and agricultural

chemical companies have hybrid wheat research efforts.

Two technologies are being used for hybrid

wheat development:

1.

2.

genetic systems that use a cytoplasmic

male-sterile female parent and a fertility

restorer male parent for hybrid seed production, and

chemical systems that use chemical hybridizing agents to treat and sterilize the female

parent for production of hybrid seed by

cross-pollination with the male parent,

Commercial hybrids have been produced and

marketed using both types of systems.

Current hybrid wheat research aims to improve hybrid performance and to reduce the

costs of producing hybrid seed commercially.

The economic success of hybrid wheat will be

determined by the hybrid breeder’s and seed

producer’s success in accomplishing these

goals.

Table 6-4.—Breeding and Seed Increase History for Stoa Hard Red Spring Wheat

Year Season Generation Explanation of evaluation state

1973 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fall Cross ND527/Coteau sib//Era

1974 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Spring F, Grown in greenhouse

1974 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Summer F2 Space-planted populations

1975 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Summer F3 Head-row

1976 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Summer F3 F2

-derived head-row

1977 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Summer F5 1 row selected, F4 derived line

1978 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Summer F6 Preliminary evaluation

1979 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Summer F7 Preliminary yield trial

1980 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Summer F8 Elite yield trial

1981-82 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Summer ND HRS variety trial (tested as ND582)

1982-83 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Summer HRS Uniform Regional Nursery

1983 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Summer Spring Wheat Quality Advisory Committee Test

1984 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Named and released

Seed increase (concurrent):

1981-82 . . . . . . . . . . . . . . . . . . . . ., . . . . . . . Purification head rows near Yuma, Arizona

1982 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Increase at North Central Station, Minot, North Dakota, 11⁄2 acres

1982-83 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Winter increase near Yuma, Arizona

1983 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Increased in North Dakota

1984 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Released as a variety

1985 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,000 acres certified plus noncertified acres

1986 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Estimated acreage, 1 1⁄2 to 2 million acres

SOURCE’ Office of Technology Assessment, 1989

--
Quality standards and questions for hybrids

in general are identical to those for conventional varieties. The end-use quality of hybrids

has tended to be between their two parents for

most traits. Some quality control can be

achieved in hybrids by choosing parents that

have complementary quality traits.

As wheat hybrids must have a yield advantage to be economical, the breeder must be concerned about grain yield/protein percentage

relationships in the wheat classes where high

protein is desirable. Also, seed produced on a

hybrid (Fl

) plant differs from seed produced on

a variety. The (F2

) seeds are segregating, each

genetically different from another. All seed in

conventional varieties is genetically homozygous and is homogeneous. Although these effects have not been examined in detail, generally the maternal F1 plant of uniform genotype

seems to have the predominant effect on endosperm quality and on kernel characteristics.

Future Technologies

Genetic Engineering. -Advances in several

technologies for genetic manipulation of plant

cells and genes, collectively termed biotechnology, have generated much discussion about

their application to important plant breeding

problems. The new technology having the greatest potential for expanding the genetic variation available to plant breeders is genetic engineering. This term covers the technology or

group of technologies with which scientists can

isolate genes from one organism, manipulate

them in the laboratory, and then insert them

stably into another organism. (This stable insertion is known as transformation. ) These

complex technologies are the focus of extensive, very active research efforts (15,24,45).

The current capabilities of scientists to use

genetic engineering in wheat and most major

crop plants are limited. These limitations regarding wheat quality include:

1. insufficient knowledge of which genes affect quality;

2. great difficulty in isolating such genes,

even if they are known;

3

4

inability to insert specific genes stably into

the host genome; and

and lack of knowledge on how to regulate

the expression of inserted genes in the target tissue.

While some of these limitations are likely to

have technical solutions in the near future,

others could remain barriers to using these techniques in wheat breeding for some time.

Once specific favorable alleles of genes that

code for glutenin or gliadin proteins are identified, a process that could require a great deal

of research, the isolation of these genes could

become fairly routine. Current research indicates that many wheat seed storage proteins

actually are “families” of proteins (many similar but slightly different proteins) coded by

“families” of genes.

Genetic engineering also can isolate seed storage protein genes from other crops. The potential value of these proteins either to improve

wheat quality or to impart additional processing attributes to wheat cannot be assessed until such genes actually are inserted into wheat

and expressed in the seed.

Currently, there are no reports that cultivated

wheats have been transformed and a plant regenerated (15). Genes have been inserted into

the cells of a wild relative of wheat (Triticum

monococcum L.), but no plant was regenerated

because of an inability to regenerate plants from

single cells, which requires an effective tissue

culture system. Although Schell (45) has reported that DNA is taken up and is expressed

transiently in wheat embryos, he has not determined if this DNA is transmitted to the offspring—i.e., is heritable.

A prudent estimate is that appropriate techniques to engineer wheat genes will be developed within the next 5 years, assuming adequate resources for experimentation, How

effective or efficient these systems will be is

difficult to predict.

An example of a technology that must be developed when wheat plants are transformed

successful y is the regulation of the expression

of genes for defined qualities. The genes must
112

be expressed in the seed but not in other tissues. Experience with other crops suggests that

the regulatory sequences for wheat seed proteins will have many of the necessary characteristics of regulating the added new genes (45).

Genetic engineering allows the addition of relatively few genes, not a gene family. Because

gene families for quality characteristics are expressed in the seed, the added genes may need

to be strongly expressed, assuming they affect

quality positively.

If detrimental proteins (e.g., the secalin proteins of the IB/IR rye translocation) are operative, these families of genes may need to

be turned off, requiring techniques not now

known. However, germplasm may be found

with suitable analytical tools, either through

natural variation or through chromosomal manipulation, that lacks the detrimental family of

genes.

It must be restated, however, that until useful genes can be successfully identified, isolated, stably integrated into the wheat genome,

and sexually transmitted to offspring, genetic

engineering of wheat remains a promise and

a goal rather than a useful tool.

If procedures that allow routine genetic transformation of wheat should become available

within 5 years, how long would it take for the

new technologies to have a major effect on

wheat quality? Research to improve understanding of wheat proteins and the specific

genes that code for them, including methods

to isolate these genes, will proceed concurrently

with research on genetic transformation. Manipulating gene regulation fully in seeds will

take many years. Transformed plants must be

grown to maturity to test seed for gene expression. Small-scale baking quality tests to determine if wheat quality has indeed been improved

requires 300 grams (0.7 pounds) of seed. Advanced hard wheat quality evaluations can require up to 550 kilograms (1,200 pounds) of

seed.

The first U.S. field tests of transformed plants

(mainly tomato and tobacco) were allowed in

1987. Hence, little or no previous knowledge

and experience exists on which to base speculations about the agronomic and quality performance of transformed wheat. Assuming the

new transformed wheat has excellent quality

and agronomic performance, another year or

two of seed increase would be needed before

sufficient foundation seed could be sold to certified growers who, in turn, must grow the seed

for 1 year before they can sell certified seed to

the wheat grower. The first genetically engineered seed will enter the commercial market

after the following growing season (an additional year), when the wheat grower harvests

the crop. Commercial acceptance and use of

the new, genetically transformed variety then

can be determined.

Consequently, at least 7 years will be required, under favorable circumstances, for a

seed of a genetically transformed variety to

reach the commercial market—plus possibly

another 5 years to develop the transformation

technology. Although this seems a long time,

the total time from identification of beneficial

genes to new plant introduction maybe cut by

4 to 6 years.

ELISA and DNA-Probe Screening Assays.—

After proteins and genes that enhance or lessen

wheat quality have been identified, rapid assays using antibodies or nucleic acids can be

used to identify lines having these genes. An

example of this technology is the enzyme-linked

immunosorbent assay (ELISA), which uses antibodies to identify proteins rapidly. ELISA technology employs a “capture” antibody that is

attached to a solid surface and that specifically

binds to a single protein from a complex protein mixture. This protein-antibody complex is

incubated with an enzyme-coupled antibody

that recognizes and binds to the protein. In the

presence of a colorless substrate, the enzyme

will convert the substrate to a colored product

that can be measured spectrophotometrically.

The presence of color, therefore, identifies the

presence of the (specific) protein that is bound

to the capture antibody and to the enzymecoupled antibody.

ELISA tests are used routinely to identify proteins associated with seed storage proteins and

with plant pathogens (as a diagnostic test for
113

diseased plants). Using ELISA techniques to

identify specific seed quality proteins is difficult because these occur as families of similar

proteins. Isolating specific proteins and obtaining precise antibodies can be difficult. Once

the technique is optimized, however, selection

to save lines with favorable quality proteins and

to discard those with unfavorable ones will be

straightforward.

The ELISA technology is not used widely yet

because of lack of understanding about which

genes affect a given quality. But basic research

to study these proteins, using ELISA techniques

and developing antibodies, should, if successful, make this technology available to breeding

programs.

Biochemical Selection and Doubled Haploid

Breeding.—These two new technologies involve

tissue culture and the ability to form unorganized tissue (called callus) from organized

plant tissue such as immature embryos and anthers on a culture medium and then to reform

organized tissue that can be induced to regenerate into plants.

With biochemical selection, the unorganized

tissues are challenged (exposed) to a chemical

that inhibits normal growth, Cells that have undergone mutations or other genetic changes

that make them resistant to the effects of the

chemical will grow normally and can be identified. The power of this technique is that approximately 2,25 million cells can be grown in

30 milliliters (about 1 fluid ounce) of medium,

Each of these cells potentially can regenerate

into a plant. An acre of wheat by comparison,

has from 1 million to 2 million plants, depending on seeding rate. For selection purposes, an

ounce of cells capable of regenerating into

plants is the numerical equivalent of 1 or 2 acres

of wheat in a wheat nursery. It cannot be considered the functional equivalent, however.

While selecting directly in tissue culture to

improve quality traits that are expressed in the

seed may be difficult, selection may be possible for overproduction of essential amino acids

that limit nutritional quality (30). Little variation for nutritional quality exists in wheat germplasm, and unconventional selection techniques may become an important objective for

improving nutritional quality (e. g., lysine content) (33).

Wheat culture techniques to produce large

quantities of regenerable cells routinely have

not been refined. Few plant traits, including

quality traits, can be selected at the cellular

level, New biochemical strategies to improve

nutritional quality probably will not be developed until tissue culture systems are developed

fully, probably within the next 5 years. Again,

as with genetic transformation technology, 7

years of testing and seed increase still will be

necessary before the improved line would enter seed trade channels,

Doubled haploid breeding could shorten the

time needed to develop inbred lines of wheat

that normally are derived by generational advance following crossing. Most commercial

wheat varieties are relatively homogeneous inbred lines, as are the two parents of hybrid

wheats. The value of this technique is that when

the chromosome number is doubled, each of

its genes is copied identically.

The major limitation with doubled haploid

breeding in wheat is that an efficient system

for producing doubled haploids has not been

developed. Using a relatively inefficient anther

culture system, however, French researchers

who developed the wheat variety Florin, released in 1987, believe they saved 4 years by

reducing time needed for inbreeding.
114

SOYBEANS

Several thousand soybean strains were introduced from Asia in the early years of this century (28). Because soybean is photoperiod-sensitive, one of the initial tasks was to identify the

potential adaptation areas for these accessions.

A maturity group classification system was developed. Those materials adapted to northernmost latitudes were placed in Group 00 and

those adapted to southernmost latitudes were

placed in Group X. The soybean’s potential

value as an oilseed was recognized and plant

breeding was begun for high oil and for adaptation to North Central States. The cultivars

Dunfield and Illini, released in the 1920s, resulted from this breeding effort and their oil

content became the standard for succeeding

cultivars (9). Soybean was also used as a forage during this time, and prior to 1941 more

soybeans were grown for forage in the United

States than for grain (28). As soybean gained

wider usage as a grain, breeding emphasis on

seed yield increased. Early improvements in

resistance to plant lodging, seed shattering, and

foliar diseases increased soybean adaptability

and helped make this a suitable grain crop for

a wide geographical area (9).2

Objectives of Genetic Selection

Two major objectives of soybean improvement programs are to raise seed yield and to

increase seed quality. As with wheat breeding

programs, a third objective is the protection of

current levels of yield and quality by increasing resistance to diseases, pests, and environmental stress. Because high yield has always

been the primary attribute that farmers wanted

in a new cultivar, it is the trait that has received

the most attention. Comparisons of old and new

cultivars have shown that significant improvement in soybean yield potential has occurred.

In a test of Group I, II, III, and IV cultivars released between 1933 and 1971, yield increased

by 50 percent. In a similar test of Group II and

III cultivars released between 1923 and 1974,

‘This section is based on Joe W. Burton, “Soybean Breeding

and Seed Quality, ” prepared for the Office of Technology\’ Assessment, LT

. S. Congress, Washington, DC, 1988.

Wilcox et al. (62) found a total increase of approximately 30 percent. Boerma (7) found that

yields of cultivars in Maturity Groups VI, VII,

and VIII had increased about 42 percent since

1914.

Resistance to insects has been an objective

of some soybean breeding projects. Most research has been conducted in Southeastern

States, where insects pose a greater threat to

production. Although several insect species are

pests, the genetic resistance that has been identified seems to have some effectiveness against

many of them (37). Improved insect-resistant

breeding lines have been released as germplasm, and one insect-resistant cultivar (Crockett) has been released in Texas.

Many studies aim at characterizing the genetic variation for protein and oil content in

soybean and the genetic correlations between

oil, protein, and seed yield (11). Yet for most

soybean breeding projects, altering protein and

oil concentration has been a low or nonexistent priority. Rather, the primary breeding goal

has usually been high yield with maintenance

of protein and oil at acceptable minimum levels,

e.g., 41 percent protein and 20 percent oil. The

well-documented negative relationship between protein and oil has meant that selection

for either trait alone has resulted in a decline

in the one not selected (10,13). Likewise, yield

and protein are often negatively correlated and

it has been difficult to increase both simultaneously (10). Soybean producers, the primary clientele of breeders, do not receive payment for

the beans they produce according to chemical

constituency. As a result, they have shown no

interest in cultivars with high oil or high protein and this lack of interest has influenced

plant breeding objectives.

Three cultivars have been released that are

8 to 12 percent higher in protein concentration.

Protana and Provar were developed in Indiana

and Iowa, respectively, and released in 1969

(57). Because the yielding ability of these cultivars was below that of other varieties being

grown at the time, neither gained much accept-
115

ance by farmers. A third cultivar, Tracy, was

developed in Mississippi, and because it had

good yielding ability and resistance to Phytophthora rot and some foliar diseases, it achieved

wide usage in Southeastern States, The cultivar Ransom, developed in North Carolina, has

a higher than average oil concentration [23 percent). But it achieved wide usage because of

its high yielding ability and not because of its

high oil content.

While most soybean breeding has been directed toward increasing or protecting productivity, a considerable amount of research has

also been aimed at developing germplasm with

novel seed traits that would fit particular end

uses and markets. These novel types, as usually visualized, would be sold outside the grain

trade (probably on a contract basis) and thus

have an opportunity to bring a premium price.

The development of the cultivar Vance offers

a good example of soybean breeding for a special end use. Vance was derived from a cross

between the cultivar Essex and a wild soybean

(Glycine soja) line. It has tiny seeds (8.8/100

seeds), which makes it very suitable for use in

natto, a Japanese food product. Currently this

cultivar is being grown in North Carolina and

Virginia and is being sold directly to a Japanese importer for more than the soybean grain

market price.

Tofu is another soybean food product that

could be made from a specialty variety. While

tofu can be made from any soybean, high protein seeds with yellow seedcoats and hila are

preferred (22), The variety Vinton, which has

44.9 percent protein, was developed for this

purpose (5).

Genetic Influences on

Soybean Quality

Seed coat and cotyledon color are controlled

by a relatively small number of genes. Likewise,

small numbers of genes are usually involved

in disease resistance. In cases like these where

traits are simply inherited, genetic alteration

is not difficult, provided the presence or absence of gene expression can be determined.

Thus, the seed quality traits related to seed color

and disease can be easily manipulated using

standard plant breeding methods if genes for

disease resistance have been identified in the

soybean germplasm collection.

Protein and oil concentration (percentages)

in soybean seeds and seed size are quantitative

traits known to be under the influence of many

genes. These can also be changed by classical

plant breeding methods, but the task is usually

more difficult. The challenge to plant breeders

is mainly that of incorporating the large number of genes affecting the trait into an agronomically acceptable cultivar. This is complicated

by the fact that genetic alteration of one trait

frequently leads to undesirable changes in other

plant characteristics.

When quantitative inheritance (i.e., controlled by many genes) is involved, knowing the

heritability of a trait is the key to determining

an appropriate plant breeding strategy for

changing the trait. The expression of the quantitative trait depends on which genes are

present in a given plant. Also, the trait is usually influenced by environmental conditions,

which also contribute to the variation in expression. Heritability is a measure that estimates

the proportion of the total variation in expression that is due to strictly genetic influences.

Thus, as with wheat, a trait with high heritability is subject to less environmental influence,

which means that the genetic worth of a particular plant is more easily determined. This

usually means that progress in changing the

trait through breeding is more rapid.

Johnson and Bernard (32), Brim (8), and Burton (13) have presented heritability estimates

for quantitative traits that are usually measured

in soybean breeding populations. The estimates

were taken from several independent studies

of different populations of soybean lines,

Heritability estimates for seed protein percentage ranged from 51 to 92 percent. Seed oil estimates of heritability were similar, ranging between 51 and 93 percent, By comparison, seed

yield estimates are lower, between O and 73 percent. This suggests that seed composition is less

affected than seed yield by environmental factors. Thus, the genetic worth of a soybean line
116

as it pertains to protein and oil composition is

easier to determine than its genetic worth relative to seed yield.

YieId-Quality-Resistance Interactions

Breeding a cultivar for disease or pest resistance requires that resistance genes be incorporated into a high-yielding, agronomically

acceptable genotype. If the resistance genes are

located in a high-yielding adapted cultivar, then

the transfer of resistance can usually be accomplished without yield loss. Such would be the

case with resistance to soybean mosaic virus

(SMV). High-yielding SMV-resistant cultivars

are currently available. On the other hand,

when resistance genes must be acquired from

nonadapted plant introductions, transfer of resistance without some yield loss is difficult.

A major problem in selection for altered seed

protein or oil composition in most soybean populations has been, as mentioned, the negative

genetic correlations between protein percentage and the two other economically important

traits, yield and oil percentage. Thus, selection

for increased protein usually results in decreases in percentage oil and commonly in decreased yield (10,61). Similarly, selection for increased seed oil percentage results in decreased

protein. Percentage protein and percentage oil

were found to be negatively correlated in 12

soybean populations investigated in 5 separate

studies (table 6-5). Most of these correlations

had absolute values greater than 0.50. Negative

correlations between percentage protein and

yield, though frequent, were usually not great,

with only 2 having absolute values greater than

When considering the problems of genetically

increasing the quantity of protein produced by

a soybean crop, there must be a recognition of

the producer’s desire for high yield and the soybean processor’s desire for high protein percentage and acceptable oil levels. Thus, breeding methods have been varied depending on

the breeding goals. The negative relationship

between protein and oil has led some investigators to attempt to increase protein indirectly

by selection for low oil. This has some economic

advantages in that percentage oil can be measured rapidly and nondestructively in soybean

seeds by magnetic resonance imaging spectroscopy.

Increased protein yield can also be accomplished by selection for increased yield, provided percentage protein does not decline significantly. In this respect, recurrent restricted

index selection could be used to hold protein

constant while increasing yield. In two cycles

of selection, using such an index, yield increased from 32.0 to 32.5 bushels/acre while

protein and oil remained constant at 45.8 percent and 17.8 percent, respectively (31). It might

be possible to select for protein yield directly,

although there is the risk that percentage protein would decline.

Genotypic Variability

There is a wide range, approximately 15 percentage points, in seed protein percentage

among lines of the U.S. soybean germplasm collection. About 10 percent of these have a protein percentage higher than 44.5 percent. Seed

oil percentage for lines in the U.S. germplasm

collection acquired before 1970 range between

13.2 and 23.5 percent. Because most currently

grown cultivars have between 20 and 23 percent oil, there seems to be more opportunity

for increasing protein than oil percentage with

the germplasm resources currently available.

With the breeding methods mentioned in the

previous section, genetic lines have been developed with higher protein content and similar yielding ability compared to standard cultivars. Three examples of such lines have

protein percentages between 44.2 and 45.5 and

were recently evaluated in the U.S. Department

of Agriculture (USDA) Uniform Soybean Tests

(table 6-6). When protein content was higher

than the check cultivars, oil content was lower

in these three lines.

Genotype v. Environment

As discussed in the section on wheat, variation in the expression of a quantitative trait in

any plant population is due to genetic and environmental influences and an interaction be-
I

Table 6-5.—Genotypic Correlations in Soybeans
118

Table 6-6.—Mean Performance of Check Cultivars

and Breeding Lines With Higher Percent Seed Protein

— . .

Yield Protein Oil

Line (bu/acre) (percent) (percent)

D82-4098 a 

. . . . . . . . . . 45.8 44.2 18.1

Centennial . . . . . . . . . 43.8 42,9 19.0

N84-1256 b . . . . . . . . . . 37.0 45.5 18.7

Check cultivarc . . . . . 37.5 41.5 21.0

LN82-4049 d . . . . . . . . . 45.4 44.8 20.2

Sparks . . . . . . . . . . . . 44.0 41.2 21.5

aTe.st@ lrl Itle Regional Prel Imlnary VI, The Uniform Soybean Tests—Southern

Region, 1984 bTeSted {n five North Car~llna envlronmf+!nts

CBraXtOn, Ransom, or GasoY 1 T

dTeSted in tfle Flegiorlal Prellmlnary IV A, The Uniform Soybean Tests— Northern

States, 1985

SOURCE Off Ice of Technology Assessment, 1989

tween the two. In defining issues related to the

interaction of genotype and environment in

plant breeding, it is helpful to consider environmental variation in a continuum from predictable to unpredictable. Predictable variation

is due to those conditions that can be controlled

in some way (e. g., irrigation) or those that have

permanent characteristics (e.g., photoperiod

and soil type). Weather-related conditions generally contribute most to unpredictable variation,

Most problems in seed quality that arise because of weather have no real genetic solutions.

Sometimes, genetics can lessen the impact of

a weather-related problem. For instance, the

hard-seed coat genotype develops less seed disease when harvest is delayed after maturity.

Other genetic sources of resistance to fungal

seed pathogens lessen the problem but do not

eliminate it. Many seed disease problems are

related to cultural practices and harvest. Usually changes in farming, harvesting, and storing practices are much more likely than varietal

disease resistance to be effective in controlling

seed disease.

Most soybean breeding programs have regional testing efforts to evaluate genotypes

across a wide array of environments. A genotype is selected from these tests on the basis

of ability to perform well in most environments.

Statistical analyses have been developed to determine the relative environmental stability of

cultivars. Evaluation and selection of stable cultivars is the most common way that environmental influence is moderated by genetics. The

other way is to attempt to tailor a variety for

a particular environment. This can be quite

successful if the environment can be defined.

Breeding for disease resistance fits this

category,

Role of Public and Private

Soybean Breeders

Private industry investment in soybean breeding has been a relatively recent development.

Prior to the passage of the Plant Variety Protection Act in 1970, only six companies (with

one plant breeder each) were engaged in soybean breeding because soybean is a self-pollinated crop and, without the act, research investment could not be recovered, Since then,

an additional 25 companies and 61 breeders

have been added to the private soybean breeding industry (63). Under the act, certificates of

plant variety protection can be issued that assure the “developers of novel varieties of sexually reproduced plants . . . exclusive rights to

sell, reproduce, import or export such varieties.” It was this guarantee of exclusive rights

that enticed private seed companies to invest

in soybean research. Thus, the role of the private plant breeder is to develop novel soybean

varieties that can be sold at a profit.,

Public soybean breeders have always been

involved in varietal development. Yet they have

had and continue to have a large role in basic

soybean breeding. The roles or responsibilities

of public breeders in general have been identified as to teach and train students as future

plant breeders, conduct “basic” research, and

develop cultivars of minor and regionally

adapted crops (52). This latter would obviously

not apply to soybean breeders. General agreement exists among those concerned with this

issue that training students is an important and

appropriate responsibility of public breeders,

and most agree that public breeders should conduct basic research.

The changing role of publicly supported plant

breeding research was discussed at the 1982

Plant Breeding Research Forum sponsored by

Pioneer Hi-Bred International, Inc., which was
119

attended by both public and private plant

breeders and administrators. The joint effort

between public and private breeders was reported in the conference proceedings as being

mutually beneficial. Furthermore, the competition in crops such as soybeans was considered to be healthy because there is no assurance that developing varieties of self-pollinated

species will be profitable enough for private

companies to justify continued research investment, because it is not possible to draw a line

separating basic from applied plant breeding,

and because no clear division exists between

germplasm enhancement and cultivar development (43).

General agreement exists that increased support for basic research is needed, particularly

that involving the collection, assessment, and

development of germplasm resources (43,52).

This is needed simply to maintain current levels

of crop productivity. The average lifetime of

a soybean cultivar in the United States is 5 to

9 years, in part because of the dynamic nature

of the agroecosystem. The sudden appearance

of a disease, changes in climate, water, or soil

conditions, or changing cultural practices can

necessitate the replacement of a cultivar with

one more adapted to the new environment, This

situation is not likely to change. The new

genetic engineering technologies, such as protoplast fusion, if successful, will be a useful tool

in cultivar development but will not eliminate

the need for traditional plant breeding research

activities.

Rationale for Differentiation

Private plant breeding programs have basically one goal—the development of an improved

cultivar that can be marketed and profitably

sold to farmers. This permits a concentrated

investment of resources for cultivar development that is usually much greater than a similar investment by a public plant breeding program. For example, in 1983 Asgrow Seed Co.

made 1,200 crosses combining genetically

different material and screened 120,000 lines

with a professional staff of five Ph.D. plant

breeders (4), By comparison, the public soybean

breeding program at North Carolina State

University in a typical year makes approximately 6 crosses aimed at cultivar development

and screens approximately 1,200 lines for agronomic performance,

Research funds and scientists’ time at most

public institutions that conduct soybean breeding are spent on a variety of activities not

directly related to cultivar development, such

as teaching, evaluating germplasm, devising

and testing breeding methodologies, and doing inheritance studies. Without a profit motive, publicly funded soybean breeders are usually under less pressure than private soybean

breeders to develop and release cultivars. Publicly funded soybean breeders also are freer to

conduct long-term research projects that have

a low probability of yielding any immediate economic return, The “high risk” nature of basic

research means it probably will only be conducted by public institutions (43).

Funding

Soybean breeding by a private company is

funded by profits from the sale of seeds of’ the

varieties the company produces. If soybean varieties are not profitable, then the funds come

from some other division of the company that

is profitable. Funding decisions are based on

company managers’ assessment of the market

potential for soybean varieties with particular

characteristics—e.g., maturity group, resistance

to a disease, and so on.

Soybean research has four sources of public

funding. These sources and their relative contribution in 1984 were:

State appropriations (37 percent);

USDA-Agricultural Research Service (29

percent);

Hatch Act formula (10 percent); and

funds to land grant universities and contracts, grants, and cooperative agreements

from Federal, State, and farmer check-off

sources (24 percent) (3).

Farmer check-off in the 1980s has amounted

to between 7.4 and 8.1 percent of the total soybean research funding. Grower funding varies

a great deal among soybean-producing States.
120

Grower funding in 1984 amounted to 25.7 percent of the total soybean research budget in

Nebraska, whereas in Ohio there was none.

Even though studies measuring return to investment in agricultural research show rates

of at least 15 percent, State and Federal support (in real dollars) for agricultural research

has remained nearly constant since 1965 (43).

In recent years, as plant breeding positions in

public institutions have become vacant, they

have been converted to genetic engineering positions so that research in biotechnology can

be emphasized. This has meant an overall decrease in funding of traditional plant breeding

research. This reduction in public support for

plant breeding is generally viewed with great

concern.

Alternate means of financing public plant

breeding research are being explored. One suggestion is that private industry become more

involved. For instance, a private company

could support graduate student training and

research. It is also suggested that private industry could support research that benefits the

industry itself. Some State universities are considering patents on products of their plant

breeding research as a means of generating revenue. Increased funding from commodity organizations is another possibility.

All these suggestions have been criticized because funding of this nature is usually unpredictable and tied to particular short-range goals.

It does not provide for the long-term, higher

risk research that requires a continual resource

commitment. A recent suggestion has been the

release by State Agricultural Experiment Stations of soybean varieties eligible for royalties,

by the brand name Variety Not Stated. This idea

has not been viewed favorably by either public

or private soybean breeders. It is believed that

such a system would tend to shift more resources toward short-term basic research, impede the free flow of germplasm among experiment stations, and limit a farmer’s ability to

know whether or not two varieties are identical.

Variety Release

Prior to 1946, 194 soybean cultivars were released in the United States and Canada (table

6-7). Nearly all were plant introductions from

Asia or plant selections from those introductions. Active soybean breeding increased after

1945. Between 1946 and 1970, 110 cultivars

were released from public plant breeding projects. As noted, private soybean breeding increased with the passage of the Plant Variety

Protection Act in 1970. Between 1973 and 1987,

a total of 363 soybean cultivars were released

under plant variety protection (table 6-8). Most

of these were developed by private soybean

breeding projects. Sixty-four public cultivars

in maturity groups 00 to IV were released between 1971 and 1981 (5 I), and in maturity

groups V to VIII, 93 public cultivars were released (29).

As the number of public varieties has increased, the number of acres planted with private cultivars also has increased. Currently 57

private cultivars are available to farmers in

North Carolina v. 23 public cultivars. The North

Carolina acreage planted to public cultivars has

decreased from 81.4 to 62.7 percent in the past

4 years (19). The trend toward increased use

of private cultivars will probably continue due

to the release of improved private cultivars and

the ability of private companies to market effectively.

Procedures for Release

Most soybean cultivars are the inbred progeny from matings between two or three inbred

lines or cultivars, They are usually “pure” lines,

which means they have a high level of genetic

homozygosity from having been inbred through

at least three generations of self-pollination. A

soybean breeder selects the “best” inbred lines

from among several populations. These lines

are tested in local and regional tests before a

decision is made to recommend the line for release as a cultivar. This decision is made based

on its yielding ability relative to currently grown
121

Table 6-7.—Soybean Cultivars Released by

Public Institutions in the United States

and Canada Prior to 1976

Maturity groups Prior to 1946 1946-70 1971-76 Total

00-I, . . . . . . . 35 “

-

29 8 72-

II-IV . . . . . . 98 54 12 164

V-Vll . . 43 22 6 71

Vlll-X . . . . . . . . . . . 18 5 4 27

Total . . . . . . . 194- 110 30 334

SOURCE T Iiymowltz C A Newell, and S G Carmer ‘ Pedtgrees of Soybean Cul.

tlvars Released I n the Un!ted States and Canada International Agrtcul

tural Publtcatlons, IN TSOY Series No 13 Unwerslty of Illlnols

Urbana Champaign IL 1977

cultivars in the same maturity grouping. Decision to release is also based on other traits that

contribute to agronomic quality and yield stability over a range of environments. In approximate order of importance, these traits include

resistance to plant lodging, disease and pest resistance, stress tolerance, rate of emergence,

and protein and oil content.

Every State Agricultural Experiment Station

or private seed company has a committee that

reviews and approves prospective cultivar releases. A soybean breeder who has selected a

line that is suitable for release as a cultivar must

prepare a report or “defense” of the line. This

includes a summary of pertinent test data and

a statement of the rationale for release. The latter explains the unique characteristics of the

line that would make it an important addition

to available cultivars. Productivity and usefulness to growers are the primary criteria in

releasing new varieties, For private plant breeding companies, stability is also a critical consideration. Because a company’s name and reputation are associated with the cultivars they

release, the firm cannot afford to release a cultivar that performs poorly.

Every State has its own cultivar release policies, although these have all been developed

within the guidelines of USDA policy (57) and

Federal law (Federal Seed Act of 1939 and Plant

Variety Protection Act of 1970). As an example, the North Carolina Agricultural Research

Service makes the following statement in its

Table 6-8—Soybean Cultivars Released by Private

Companies Under Plant Variety Protection

Certificates, April 1973-November 1987

Number of

PVP cultivars Number of

not under Title V PVP

Company

Agratech Seeds . . . . . . . . . . . . . .

Agripro, Inc. . . . . . . . . . . . . . . . . .

Americana Seeds, Inc . . . . . . . . .

Asgrow Seed Co.. . . . . . . . . . . . .

B.B. Collier-Barney A. Smith .,

Bryco Plant Research Division .

BSF/Ag Research . . . . . . . . . . . .

Callahan . . . . . . . . . . . . . . . . . . .

Coker’s Pedigreed Seed Co. ., .

Dairyland Seed Co., Inc. . . . . . . .

Delta & Pine Land Co. . . . . . . . .

Ferry-Morse Seed Co. . . . . . . . .

FFR Cooperative . . . . . . . . . . . .

Funks Seeds . . . . . . . . . . . . . . . .

Goldkist . . . . . . . . . . . . . . . . . . . .

Growmark, Inc. . . . . . . . . . . .

Helena Chemical Co. . . . . . . . . .

Identity Seed & Grain Co, . . . . .

Illinois Foundation Seed . . . .

Jacob Hartz . . . . . . . . . . . . . . . . .

Jacques Seed Co, . . . . . . . . . . . .

J.M. Schuetz Seed Co. . . . . . . .

King Grain U. S. A., Inc. . . . . . . .

Land O’Lakes, Inc. . . . . . . . . . .

Louis Bellatti . . . . . . . . . . . . . . . .

Lynnville Seed Co. . . . . . . . .

Midwest Oilseeds, Inc. . . . . . . . .

Milburn Farms . . . . . . . . . . . . . . .

Nickerson American Plant

Breeders . . . . . . . . . . . . . . . . . .

Nixon Seed Co. & L. . . . . . . . . . .

North American Plant

Breeders . . . . . . . . . . . . . . . . . .

Northrup King Co. . . . . . . . . . . . .

pioneer Hi-Bred International,

Inc. . . . . . . . . . . . . . . . . . . . . .

Prarie Seed Co., Inc. . . . . . . . . .

Scientific Seed Co., Inc.. . . . . . .

Soybean Research Foundation,

Inc. . . . . . . . . . . . . . . . . . . . . .,

Stanford Seed Co. . . . . . . . . . . . .

Syler . . . . . . . . . . . . . . . . . . . . .

TerraI-Norris Seed Co., Inc.

Teweles Seed Co. . . . . . . . . . . .

Voris Seeds, Inc. . . . . . . . . . . . . .

V.R. Seeds, Inc. ... , . . . . . . . . . .

Totals . . . . . . . . . . . . . . . . . . . .

Title V

SOURCE Of ftce of Technology Assessment 1989

Plant Patent and Plant Variety Protection Policy and Procedure Statement:

88-378 - 89 - 5
122

New plant cultivars and breeding lines may

be released for public use if judged to be either unique or superior to currently available

germplasm, or equal to presently available cultivars if the genetic base of a crop is broadened

so as to reduce disease and other pest hazards

(40).

The statement encourages release of new cultivars that enhance yield, but makes no mention of quality.

Length Of Time for Development

and Release

In a survey of 64 Plant Variety Protection applications for soybean cultivars, the average

time required from cross to application was 9.2

years (4). This development and release time

is similar for private and public cultivars. The

use of a winter nursery in the inbreeding stages

can shorten the time between making a cross

and development of a pureline that has variety

potential. This has already become common of

all soybean breeders, however, so the 9.2-year

estimate would include the time savings involved in winter nursery use.

New biotechnologies are unlikely to reduce

significantly the time for development and release of a cultivar. They will, however, provide

the opportunity for putting a new trait into a

plant in a matter of months where now it can

take 5 to 7 years to breed into a variety a specific trait through conventional breeding and

backcrossing. Field testing and seed manipulation steps are still necessary and will consume

most of the development and release time.

Soybean Breeding Technology

Present Technology

Soybean cultivars are typically developed by

hybridization of two or more lines followed by

self-fertilization to the F4 or later generation.

Homozygous lines (purelines) are isolated and

tested to determine those with superior performance and cultivar potential. With this

method, the major issue has been how material in the F2

, F3, and F4 segregating generations

should be handled. The method used depends

on the plant breeding objectives and personal

preferences of individual soybean breeders.

Pedigree selection or modified pedigree selection are the most common methods for systematic inbreeding (22). Backcross breeding is commonly used for transferring a few gene loci

from a low-performing line to a high-performing cultivar. Modification of those standard

practices include population improvement

through early generation testing and recurrent

selection, bulk breeding, and mass selection.

The other important issue that has received

considerable attention is the most appropriate

and efficient way to evaluate lines with respect

to a particular trait. Various field plot and laboratory testing techniques have been developed

and used (22). The appropriateness of a particular technique depends on the trait being evaluated and the ease with which it is measured.

Much of the success or failure of a particular

breeding project can be attributed to the quality of the germplasm and the genotypic evaluation program.

These classical methods are adequate for the

transfer and recombination of genes within the

species and have been successfully used to improve soybean cultivars. Higher yielding cultivars with disease and pest resistance have been

developed and released over the past 40 years.

Progress, while continuous throughout this

period, has been slow. The rate of increase in

seed yield has been estimated at between 0.6

and 1.0 percent per year (62). For at least the

next 10 years, the classical methods, because

they are in place and successful, will likely continue to be those most used to produce improved cultivars.

It is currently not possible to economically

produce the seeds for F1 soybean hybrids. Patents for two F1 hybrid seed production methods have been issued. However, it remains to

be demonstrated that either can be used to produce hybrid seed economically. Strong evidence for significant hybrid vigor in the soybean species is sparse (13). As a result, little

research is being conducted on F1 hybrid seed

production for soybeans.
123

Future Technology

Future technology in the genetic alteration

of soybean will undoubtedly include recombinant DNA methods (genetic engineering). Some

progress is being made in the regeneration of

whole, fertile plants from soybean tissue and

cells in culture, But it is impossible to predict

how long it will be before regeneration becomes

routine. Various methods for transferring genes

into plants are being developed, and plant transformations have been successful. For instance,

a gene that imparts tolerance to glyphosate herbicide has been introduced into Petunia (48),

If methods for foreign gene transfer and regeneration are developed for soybean, the same

problems as in wheat will still apply—isolating

genes, determining which ones can be beneficially introduced into a plant, and regulating

the gene expression once it is introduced. In

soybean, the traits most likely to be altered

through genetic engineering are seed protein

and oil quality, plant stress tolerance, pest and

disease resistance, and herbicide tolerance (26).

It is expected that desirable changes in these

traits can be obtained by manipulating a few

genes, As of now, not many soybean genes have

been cloned, sequenced, and had the gene product isolated. More basic genetic information

is needed about plant traits in order to make

significant changes in soybean through genetic

engineering (26),

Only the seed quality traits that are related

to disease reaction, such as the mottling caused

by soybean mosaic virus, are likely to be affected by new genetic engineering technologies

in the near future, Percent seed protein and oil

and seed size, like seed yield, are polygenic.

Many unidentified genes are involved in the

determination of these traits. This makes them

difficult to evaluate at the cellular level and to

work with at a molecular level (27).

The new molecular genetic technologies hold

great promise, and much important biological

information will be learned from molecular

genetic research. This will eventually translate

into practical ways to alter plants genetically

in a desirable way. In the short term, however,

most improvement in soybean seed quality will

come through classical plant breeding.

COR N

Corn is the only important cereal crop indigenous to the Americas, and more than twice

as much corn is produced in the United States

as any other crop. Most modern races of corn

are derived from prototypes developed in Mexico and Central and South America. An exception to this is the sole product of North

America—the yellow dent corn that dominates

the U.S. Corn Belt, Canada, and much of Europe today. The late maturing Virginia Groundseed and the early maturity Northeastern Flints

were crossed in the early 1800s, and the superiority of the hybrid was recognized. The cross

was repeated many times and out of these mixtures eventually emerged the Corn Belt dents,

the most productive race of corn found anywhere in the world. The highly selected cultivars of Corn Belt dents formed the basis of hybrid corn and were the source of the first inbred

lines used to produce hybrids, {

Objectives of Genetic Selection

Corn breeding is accomplished by selection

for desired plant traits during both inbred development and hybrid evaluation. Breeders

have always selected for traits that give higher

yield and easier harvest in accordance with current cultural practices, and harvest method has

been the most important cultural practice influencing selection traits for corn. Quality factors such as protein or starch content have not

been a high priority.

‘This section is based on A, Forrest Troyer, “Grain Qualit\r

and Corn Breeding, ” prepared for the Office of Technology\’ Assessment, U.S. Congress, Washington, DC, 1988.
124

Since the introduction of hybrid corn, the

U.S. average corn yield has increased steadily,

from 16 bushels per acre in 1936 to 110 bushels

per acre average for 1981 through 1987. Since

single-cross hybrids (circa, 1960), the average

yield increase per year is 1.89 bushels (figure

6-l). Most of this yield increase is genetic improvement. Three investigations (14,20,44) compared yields of hybrids from various eras; the

gain in hybrid performance due to breeding

averaged 64 percent of the total gain in annual

corn yields (table 6-9). The other 36 percent has

been attributed to improved cultural practices

such as fertility, weed control, plant density,

planting date, row width, etc. Corn breeders

have successfully matched breeding objectives

with improved cultural practices steadily and

rapidly to increase national average yields of

corn and will continue to do so in the future (55).

The other major objective of corn breeding

has been to accommodate harvesting methods.

Hybrid corn made mechanical pickers possible because of better standability. The cornpicker-harvest period (1940-60) saw many corn

production improvements; increased fertilizer

use, higher plant densities, more continuous

corn, improved herbicides and insecticides,

cheaper nitrogen, and earlier planting were

some of the more important. Cold tests and

other indicators of seed vigor were devised by

breeders to develop corns adapted to earlier

planting. Plant and ear height were unaffected

by use of corn pickers, Most farms were still

diversified, and livestock consumed much of

the corn on the farm where it was grown.

Breeders selected corns that would not shell

too easily on snapping rolls and on husking beds

of corn pickers, Continuous corn led to rootFigure 6-1. -U.S. Corn Yields and Kinds of Corn Over Years (b values show average yield increase per year)

●

b = 0.01 ● 9

SOURCE: A Forrest Troyer, “Corn Breeding and Gram Cluahty,” presented to North American Export Gram Assooatlon, May 1986
125

Table 6-9.—Summary of Studies on

Breeding Gain in Corn

Hybrids Period Gain

Study (number) (years) (percent)

Duvick, 1977 ..., . . . . . . . . . 19 -

‘

- 32 57

Duvick, 1977 . . . . . . . . . . . . . 50 40 60

Russell, 1974 . . . . . . . . . . . . 25 48 63

CastIeberry et al.,1984 . . . . 27 60 75

Average . . . . . . . . . . . . . . . 30 45 64

SOURCE Of ffceof Technology Assessment 1989 —

worm buildup and strains of insecticide-resistant insects, so stronger rooted hybrids were

needed. Farmers preferred hybrids that picked

cleanly and easily, so breeders selected for

smaller shank-to-ear attachment. Use of higher

plant densities required selection by breeders

of corn genotypes that tolerate stress due to

plant crowding. About the same maturity corns

were still being grown in a given area (generally full season), and test weight still was not

a problem because corn sold off the farm was

naturally dried ear corn.

The field-shelling-harvest period (1960 to

present) has brought larger farms, higher plant

densities and fertilizer rates, even more continuous corn, and more corn marketed off the

farm (55). Artificial dryers became commonplace throughout the Corn Belt. For a time, large

farms and small equipment increased the need

for better standing corns, and newer combines

and other equipment steadily increased operational capacity. Corn became shorter and

lower eared in this period as farmers shifted

to earlier corns in order to start combining

sooner. Before the invention of quick-attach

heads for combines, stalk quality became extremely important to large operators in cashgrain operations because corn harvest often

waited until soybean harvest was finished. Ear

retention was also very important to these operators. Harder starch, or flintier types, allowed

earlier start of harvest by reducing the number of broken kernels with high moisture shelling. Artificial drying of corn (which lowers test

weight), coupled with more direct selling from

the field with test weight discounts, further increased the need for harder textured, flintier

corns, Hybrids with stronger cobs and easier

shelling became an advantage for combine harvest, while those that dried faster in the field

and in the dryer became more desirable as fuel

costs rose (54). Genetic selection for tolerance

to higher plant densities reduced barrenness

and increased frequency of two-eared plants.

Adoption of minimum tillage to cut costs increased the incidence of diseases and insects

(gray leaf spot, corn borer, etc.), leading to more

breeding emphasis on these problems.

Genetic Influences on

Kernel Quality

Corn kernels can be altered by genetic means

to give modifications in starch, protein, oil, and

other aspects such as kernel hardness,

Starch Modification

Most genes affecting endosperm composition

are recessive. Starch from normal dent or flint

corn is composed of 73 percent amylopectin

(starch fraction with branched molecules) and

27 percent amylose (the fraction from linear

molecules). Corn breeders have been successful in developing waxy corn that has starch with

100 percent amylopectin. However, yields of

the waxy hybrids were less than those of their

normal dent counterparts. But newer waxy

hybrids are comparable to the better dent varieties. It has also been possible to increase the

amylose content of starch up to 50 percent.

Waxy and high-amylose hybrids are grown under contract for corn wet-milling.

Oil

The oil content of most hybrids ranges from

3.5 to 6.0 percent, with an average of about 4.5

percent. Experiments indicate that oil content

can range from a low of 0.1 percent to as high

as 19.6 percent (18). High oil hybrids with 6 percent oil content and above are lower in yield

than hybrids with less than 6 percent oil. Increasing oil content genetically is not difficult,

because variation occurs in existing germplasm

and most of it is heritable (2). Oil quality is a

function of the relative amounts of unsaturated

and saturated fatty acids, the amount of which

is under genetic control and can be altered

through breeding.
126

Analyses of hybrid crosses have shown a negative correlation of – 0.49 between yield and

percent oil. Data from these experiments suggest that for significant increases in percent oil

content, yield would have to be sacrificed.

Protein Quantity

The amount of protein in corn is a function

of cultural practices and heredity. The current

average protein content of U.S. hybrids ranges

between 9 and 11 percent. Through selection,

protein can be altered. Experiments covering

70 generations of selection for protein have

produced corn with a low of 4.4 percent protein and a high of 26.6 percent (18). But there

is a trade-off between higher protein and yield.

Genetic correlations between yield and protein

range from – 0.41 to +0.34 and average – 0.06

(17). Data from these experiments indicate that

within an intermediate range of approximately

14 to 18 percent protein, yield and protein can

be increased simultaneously. For higher ranges

of protein, yields will decrease. Not much interest exists in developing hybrids with higher

protein potential, however, because economically available soybean protein can produce an

animal feed ration that is balanced with respect

to the essential amino acids.

Kernel integrity

Damage to kernels during harvesting, drying,

elevating, and moving grain through commercial channels is of concern. Contributing to the

problem is the change from harvesting on the

ear to using field picker-shellers. Artificial drying was usually not needed for corn harvested

on the ear, because it dried naturally in the corn

crib. Combine harvesters allow harvesting corn

earlier to reduce field losses; however, grain

usually has a high moisture content and requires artificial drying. Most farmers dry grain

rapidly at high temperatures because of the

small drying capacity of equipment, but this

excessively rapid removal of moisture causes

cracks to occur in kernels. When grain is moved

through market channels, kernels break easily,

resulting in fine particles that lower the value

of the product.

Methods of determining breakage susceptibility have been developed that indicate many

kernel characteristics are related to the breakage problem. These include the ratio of vitreous to nonvitreous endosperm, kernel density

and average weight, test weight, and kernel size

and shape. Most of these characteristics are

heritable, but corn breeders have not given high

priority to selection for kernel breakage reduction. Research also indicates that differences

exist among genotypes for kernel fracturing

caused by fast, high-temperature drying. Selection for resistance to this kind of kernel fracturing should be possible.

Another solution to the problem is to allow

corn to dry in the field to a moisture content

that would require less artificial drying. Development of fast-drying hybrids is possible.

Genotype v. Environment

The environment greatly influences the quality of grain. Fall seasons with much rain can

increase ear rotting. The need for fast drying

in the field has caused selection of hybrids with

less husk cover. These same hybrids may lack

ear protection from heavy rainfalls. The best

hybrid for fast drying in a normal autumn may

be the worst hybrid for ear rot in a high-rainfall

autumn. Early frosts may cause premature

death that reduces kernel size and test weight.

Dry seasons in general favor insects because

insect parasites are inhibited by lack of moisture. Insects reduce grain quality by increasing broken kernels, foreign material, and kernel rot.

Genotype v. Management

Protein content can be increased with nitrogen fertilizer. If the base yield is 75 to 100

bushels per acre with 8.5 percent protein, and

the final yield with extra nitrogen is 100 to 125

bushels, the first 100 pounds of nitrogen will

probably raise the protein about 1 percent. The

next 100 pounds will raise the protein another

0.5 percent (l). Higher protein contents have

been found in corn after drought conditions because a fixed nitrogen amount is distributed
127

through a smaller crop (25). This is because

most nitrogen accumulation precedes endosperm filling. Only one-fourth of the protein

in the kernel is in the endosperm. The endosperm increases in size with higher yields

and is mostly starch—86 percent starch and 9

percent protein (60). Thus, a negative association occurs between yield and percent protein

at high yield levels or at low nitrogen fertilization levels.

Plant density can affect quality when enough

stress occurs to cause misshapen ears that may

dry slowly or have many small kernels. Grain

texture may also be affected by stress. Late

planting dates reduce quality by causing flowering during hot weather and an immature crop

at harvest with effects similar to early frost.

The chosen drying method is a big factor in

corn quality. When corn was harvested on the

ear and dried slowly in the crib, test weight and

broken kernels were no problem. Field shelling (combining) has changed all that. In the

northern and central Corn Belt, harvest at high

moisture followed by rapid drying at high temperatures can cause puffing and case-hardening

that reduces test weight and increases brittleness, In the southern Corn Belt, ear quality can

deteriorate in the field during humid fall conditions.

Ear-corn storage has given way to shelledcorn storage, As mentioned before, these

changes in harvest methods have greatly affected corn breeders’ selection traits. Stored

corn typically has problems with molds and insects that interact with moisture content and

temperature of the corn.

Role of Public and Private

Corn Breeders

Corn breeding at the Federal, State, and private level greatly increased subsequent to the

double-cross-corn formula of hybrid production

that made hybrids practical in spite of the weak

inbreds and cultural practices of the period. In

1955, the Federal Government spent $300,000

($80,000 for basic research), State Agricultural

Experiment Stations (SAES) no more than

$150,000, and private companies at least $2 million on corn breeding and yield testing (59). Estimates for 1987 are Federal Government (USDA)

$4 million, State Experiment Stations through

the Cooperative State Research Service (CSRS)

$8 million, and private companies more than

$70 million, For comparison, the 1987 Federal

budget contained $35 million (USDA Agricultural Research Service) and $46 million for State

Experiment Stations (CSRS) for projects related

to biotechnology (6).

Until about 1960, for new inbreds most SAES

had delayed-release programs that served to

maintain State crop improvement programs by

favoring companies that sold State-certified

hybrids. Delayed release policies plus the Federal Seed Act of 1939 (58), which prohibits selling the same pedigree under different names,

were to exclude new public inbreds from private label seed companies. However, the Federal Seed Act does not prevent this. Public

inbreds have been used in crosses and sold under different names (39), This confuses the

farmer and prevents the spreading of risk unless the pedigrees of the purchased hybrids are

known.

At the beginning of hybrid corn, many small

seed corn companies were enticed into the business by promises of new inbreds from the State

Agricultural Experiment Stations. Inbred lines

from public agencies became the parental lines

for SAES commercial hybrids and for development of new inbreds. By the late 1950s, larger

seed corn companies had extensive research

programs to develop inbreds, and public

breeders started doing additional basic research

at the expense of inbred development. A total

of 156 public lines were released from 1946 to

1955. An American Seed Trade Association survey of the same period showed 52 hybrid corn

companies in 12 States were using these lines

as 1 or more parents in producing about onefourth of the hybrid seed used annually. About

500 individual companies produced and sold

hybrid seed in Iowa in 1940; only about 100

companies were still in operation in 1957. Observers of these changes concluded that pub-
128

licly supported corn research was more basic

than 10 years earlier and that breeders involved

felt even more time should go to basic research.

Variety Release Procedures

The United States places few restrictions on

the release of new corn varieties developed by

public or private breeders, Release of new varieties takes place at agricultural experiment

stations within the land-grant system, Private

breeding takes place at research stations operated by private firms around the country, Most

States have laws that control labeling of new

varieties but these usually deal with seed purity or certification procedures. For example,

most State seed laws specify the information

required on the tag on each bag of seed, Michigan appears to exert more influence on variety

release than other States. According to breeders

there, public varieties cannot be released unless they show an “acceptable level of merit.”

Public Varieties

As public breeders, agricultural experiment

stations around the country follow general

guidelines set forth by the seed policy committee or the general executive committee for research, entitled ESCOP (Experiment Station

Committee on Policy). ESCOP is organized under the Experiment Station Section of the Division of Agriculture of the National Association of State Universities and Land Grant

Colleges in Washington, DC. The seed policy

subcommittees under ESCOP represent experiment stations on seed matters, including production and technology, in appropriate agencies and associations. General policies

regarding variety release procedures and other

breeding issues are established through these

committees. A function of ESCOP and its seed

policy committee is to maintain consistency in

procedures and policies regarding release of

public varieties. ESCOP holds no legal power

over experiment stations or variety releases,

The variety release decision within each

State’s experiment station involves a committee within the College of Agriculture. At the

University of Illinois, for example, this committee is called the PVRC (Plant Variety Review

Committee), and it serves in an advisory capacity to the Dean of the Experiment Station who

is appointed by the Chancellor of the University. Each State Agricultural Experiment Station that has an active breeding program has

a PVRC similar in function to that at the University of Illinois. Although patenting of germplasm and plant protection of varieties are currently being discussed, the general philosophy

of public institutions regarding variety release

has been one of information exchange and minimum control.

Private Varieties

Evaluation of new varieties developed by private firms occurs without significant State or

Federal intervention. The decision to release

a new variety is an internal one arrived at by

review committees that vary according to firm

size.

Each plant breeding company in the United

States has a procedure for determining the usefulness or worthiness of new varieties. These

procedures are generally informal in the case

of smaller companies, but more formal and

structured in the case of larger firms. The decision to release a new variety often evolves

during a series of meetings with company administrative personnel, breeders, sales staff,

and so on. Large companies (nationals and multinationals) do their own screening and testing

of new varieties, and the data are made available at each variety review stage. Recommendations on retesting, rejection, and release are

made on the basis of performance data and advice from company personnel. A large firm

might start out with several thousand crosses

and end up with just a couple that actually meet

all necessary criteria. In private firms, the criteria reflect field performance data as well as

information on the potential for effective sales,

marketing, and advertisement. All of these are

related to the firm’s profitability.

Michigan is an exception among the Midwest

corn-and soybean- producing States in that

State law requires public or private certified

seed to be subjected to performance trials for
129

at least 1 year before it can be sold as certified

seed. This does not preclude selling uncertified seed, nor does it prevent companies from

other States selling seed within Michigan that

has not been subjected to these tests. It does

prevent any dealer in Michigan from labeling

seed as certified unless it has been subjected

to the performance tests established under authority of the State.

Field Performance Criteria

In a 1981 survey, 454 commercial hybrids

were offered for sale; 212 precommercial

hybrids were in final testing stages; 7,400 experimental hybrids were in advanced trials; and

61,000 hybrids were in preliminary trials. About

2,800 proven inbreds were on hand and 23,000

inbreds were in preliminary tests (21).

Criteria for judging new varieties in the field

are similar for both public and private breeders.

Performance criteria for measuring corn varieties are more diverse than those for judging

soybeans and wheat. For all grains and soybeans, yield is the number one criteria as

breeders try to persuade farmers that their variety is superior to others in the market.

Private and public corn breeders interviewed

for this assessment stated that after yield, the

ranking of remaining performance criteria

differs among firms. This is in part a response

to different environmental factors, herbicide

developments, or changes in production practices that prompt a change in research emphasis. Variation in the relative importance of field

performance criteria may also relate to differences in the ability to measure various performance criteria and differences in terminology

among firms, since many performance judgments appear to incorporate some subjective

factors.

Several corn breeders indicated that for corn,

disease and pest resistance is the second most

important performance criterion, with the third

being maturity, i.e., length of dry down time

required in the field. One firm indicated that

standability was the second most important factor, while another ranked standability seventh.

Again the difference probably relates to the

firm’s ability to measure standability and to how

directly the firm relates standability to dry

down time or disease resistance. Other criteria,

ranked loosely in order of importance, are herbicide tolerance, feed value, percent early

stand, plant height, percent dropped ears, flowering date, percent barren plants, and test

weight.

Corn Breeding Technology

Most U.S. Corn Belt germplasm used today

involves only two races, southern dents and

northern flints, but more than 100 fairly distinct races of corn exist. From this standpoint

the available germplasm base is more than adequate, Considerable genetic variability exists

among kinds of corn in terms of adaptation,

size, and purpose. It is likely that all traits currently needed to improve corn quality already

exist. The problem is to identify exactly what

is needed so that seedlots in germplasm banks

can be efficiently screened for necessary traits.

Certainly a large range of test weight, kernel

texture (ratio of hard to soft starch), and kernel

size is presently available among materials actively being used by U.S. corn breeders. The

hope that an existing, unidentified trait for kernel integrity can be found depends on an accurate and rapid test to identify it.

As noted, present corn breeding technology

has worked well. U.S. average yields are increasing almost 2 bushels per acre per year

largely due to the highly competitive seed corn

industry striving to provide hybrids that give

the highest net profit to the farmer. Corn

breeders today emphasize high yields, easy harvest, and fast dry down with modern cultural

practices. The current system relegates corn

quality to fourth rank or lower. Making grain

quality or any other desired trait more profitable to the farmer will stimulate more breeding

effort for that trait under the present system,

Future corn breeding technology will include

more of the present methods plus the biotechnology approaches discussed in the wheat and

soybean sections. Successful breeders are fitting these newer technologies into present

methods, Transformation of plants with genes
130

from other species and with engineered genes germplasm storage banks. Ultimately, it may

may provide the needed trait with less effort be possible to build a needed DNA sequence

and fewer side effects than screening various and position it into elite lines.

FINDINGS

In examining the objectives of genetic selection, genetic influence on quality, the roles of

public and private plant breeders, variety release, and new technologies for wheat, soybeans, and corn, a number of common findings are evident:

• Yield v. Quality.—An inverse relationship

exists between yield and quality in all three

grains considered. In wheat, corn, and soybeans the trade-off is between protein and

yield. Increasing the intrinsic factors that

improve quality means that yield usually

declines.

● Objectives in Genetic Selection .—Yield increase and the agronomic characteristics

that relate to yield are the major objectives

of plant breeders. Quality is not a high priority in genetic selection but this varies by

commodity. The objective in wheat and

soybeans is to at least maintain quality

while improving yields. But this is difficult

to attain. In corn, relatively less attention

is given to quality factors while striving to

increase yield.

● Genetic Influence on Quality.—In general,

factors affecting quality are more heritable than factors affecting yield. The potential for improving quality through genetics

is therefore high. However, many quality

factors are quantitative traits known to be

under the influence of a number of genes.

This makes the task of enhancing quality

more difficult relative to altering a plant’s

trait influenced by only a few genes. This

is further complicated by the fact that ge-

●

●

●

netic alteration (especially with many gene

sequences) of one trait frequently leads to

undesirable changes in other plant traits.

Procedures for Release.—There are no legally binding procedures for controlling

the release of new corn, soybean, and

wheat varieties in the United States. Each

State develops voluntary variety release

policies, and the criteria for release differ

by commodity and geographic location.

Public and private breeders have yield as

their primary criterion and seldom include

quality of the harvested grain in their performance tests.

Time for Development and Release.—New

crop varieties require approximately 9 to

12 years for development and release, If

plant breeding program objectives were to

change in 1988, such as aim to develop new

varieties with enhanced quality factors, it

would be the year 2000 before new varieties were commercially available.

New Plant Breeding Technologies.—Genetic

engineering will in the future provide the

opportunity for putting a new trait into a

plant in a matter of months where it now

takes 5 to 7 years to breed into a variety

a specific trait. Much of the time is taken

up in testing cultivars under farm conditions and in seed increase, These steps

must be taken regardless of how a cultivar

is produced initially, However, total time

from identification of beneficial genes to

new plant introduction may be reduced by

4 to 6 years.
131

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11,

12,

13,

14.

15.

16.

17.

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41,

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43.

44,

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High Yield and High Percent Seed Protein in

Soybeans (Glycine max L. Merrile), “Thesis,”

North Carolina State University, Raleigh, NC,

1985.

Johnson, H. W., and Bernard, R. L., “Soybean Genetics and Breeding, ” The Soybean (New York,

NY: Academic Press, 1963),

Johnson, H. W., Robinson, H. F., and Comstock,

R. E., “Genotypic and Phenotypic Correlation in

Soybeans and Their Implications in Selection,”

Agronomy Journal 47:477-483, 1955.

Johnson, J. A., Kahn, M. A., and Sanchez, C. S.,

“Wheat Cultivars, Environment, and Breadmaking Quality, ” Cereal Science Today 17:323-326,

1972.

Johnson, V. A,, “Protein in Hard Red Winter

Wheat,” Bakers Digest 52(2):22-28, 1978.

Johnson, V. A., Mattern, P. J., Peterson, C. J., et

al., “Improvement of Wheat Protein by Traditional Breeding and Genetic Techniques, ”

Cereal Chem. 62:350-355, 1985.

Lambert, L., and Kilen, T. C., “Multiple Insect

Resistance in Several Soybean Genetoypes, ”

Crop Science 24:887-890, 1984.

Martin, T. J., Wheat Breeder, Fort Hays Branch

Experiment Station, Hays, KS, personal communication, June 1987.

McConnel, Richard, Director of Corn Research,

Pioneer Hi-Bred International, Inc., personal

communication, May 1988.

North Carolina Agricultural Research Service,

School of Agriculture and Life Sciences, “Plant

Patent and Plant Variety Protection Policy and

Procedure Statement,” North Carolina State

University, Raleigh, NC, 1981.

Openshaw, S. J., and Hadley, H. H., “Selection

Indexes to Modify Protein Concentration of Soybean Seeds,” Crop Science 24:1-4, 1984.

Penning deVries, F. W. T., Brunsting, A. H. M.,

and VanLaar, M. H., “Products Requirements

and Efficiency of Biosynthesis: A Qualitative

Approach,” JournaZ of 7’heoreticaZ Biology

45:339-377, 1974.

Pioneer Hi-Bred International, Inc., “The Executive Summary of the 1982 Plant Breeding Research Forum, ” Des Moines, IA, Aug. 11-13,

1982.

Russell, W. A., “Comparative Performance of

Maize Hybrids Representing Different Eras of

Maize Breeding,” Proceedings of 29th Annual

Corn and Sorghum Research Conference, 1974.

Schell, J. F., “Transgenic Plants as Tools to Study

the Molecular Organization of Plant Genes, ”

Science 237:1176-1182, 1987.

46.

47.

48.

49.

50.

51.

52.

53.

54.

55.

56.

57.

58.

59,

Schmidt, J. D., “Genetic Contributions to Yield

Gains in Wheat,” Genetic Contributions to Yield

Gains in Five Major Crop Plants, CSSA Special

Pub. No. 7, Crop Science Society of America,

Madison, WI, 1984.

Sears, R. G., “Milling and Baking Performance

of Hard Winter Wheats: A Plant Breeder’s Viewpoint,” presented at End Use Quality Conference, Fargo, ND, June 9-10, 1986.

Shah, D, M., Hersch, R. B., Klee, H. J., et al., “Engineering Herbicide Tolerance in Transgenic

Plants,” Science 233:478-481, 1986.

Shorter, R., Byth, D, E., and Mungomery, V. E.,

“Estimates of Selection Parameters Associated

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Simpson, Jr., A. M., and Wilcox, J. R., “Genetic

and Phenotypic Association of Agronomic

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Thorne, J. C., and Fehr, W. R., “Incorporation of

High Protein Exotic Germplasm Into Soybean

Populations by 2- and S-Way Crosses,” Crop Science 10:652-655, 1970.

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60

61

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133

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Chapter 7

Technologies

Affecting Quality
CONTENTS

Page

Harvesting Technologies. . . . . . . . .. ....137

Current Technologies . ..............137

Conditions Affecting Combine

Performance . . . . . . . . . . . . . . . . . . . . 139

Effects of Harvesting Technologies on

Grain Quality . ..................14 1

New and Emerging Technologies .. ..143

Drying Technology. . .................14 3

On-Farm Drying Systems . . . . . . . . ....144

Off-Farm Drying Systems . ..........146

Conditions Affecting Dryer

Performance . ...................14 8

New and Emerging Technologies ....150

Storage and Handling Technologies ....151

Current Technologies ., .............151

Quality Problems That Arise During

Storage . . . . . . . . . . . ..............153

Storage Techniques That Protect

Grain Quality . ..................15 4

Emerging Technologies . ......,.....158

Insect Management Interventions. . ....158

Current Pesticides. . ................15 9

Conditions Affecting Insect

Management . . . . ................162

New and Emerging Technologies ....164

Transportation . .....................16 5

Current Modes of Transport . . . . . . . . .165

Quality Problems That Arise During

Transport . . . . . . . ................169

Transport Techniques That Protect

Grain Quality . ..................17 0

Cleaning and Blending Technologies ...171

Cleaning . . . . . . . . . . . ...............171

Blending . . . . . . . . . . . . ..............175

Interactions/Findings and Conclusions. .179

Moisture . . . . . . . ...................179

Broken Grain and Fine Materials.. ...181

Ability of System to Maintain Quality. 182

Chapter preferences. . ...............18 4

Conventional Combine . ..........138

Single-Rotor Rotary Combine .. ...139

Corn Breakage v. Kernel Moisture

Content for Laboratory Rasp Bar

Sheller Operated at varying

Speeds . . . . . . . . . . ...............142

7-1.

7-2.

7-3.

7-4.

7-5.

7-6.

7-7,

7-8,

7-9,

In-bin Natural-Air Grain Drying

System . . . . . . . . . . . . . . . . .........144

In-bin Counterflow Grain Dryer ...145

Portable Batch Grain Dryer ... ....145

Continuous-flow Crossflow Grain

Dryer . . . . . . . . . . ................145

Dryeration Grain Drying Systems. 147

Two-Stage Concurrent-Flow Grain

Dryer With Counterflow Cooler

and One Tempering Zone . ......148

Fluidized-Bed Grain Dryer. ... ....150

Cascading-Rotary Grain Dryer ....150

Moisture, Temperature, and

Relative Humidity Interactions ....153

Moisture Migration Patterns in

Falling Temperatures . ...........155

Moisture Migration Patterns in

Rising Temperatures. . ...........156

General Flow of Grain From the

Farm Through the System ... ... ..166

U.S. Soybean Quality by Region,

1986 .......,........,..........17 7

Tables

Page

Grain Temperature, Moisture

Content, and Breakage Susceptibility

at Different Locations in the Grain

Column of a Crossflow Dryer .. ...146

The Effect of Dryer Type on the

Drying-Air Temperature, the

Maximum Grain Temperature, and

the Breakage Susceptibility of Corn .149

Breakage Susceptibility of Different

Corn Genotypes . .....,..........14 9

Allowable Storage Time forlorn.. .154

Relative Amounts of Breakage for

Grains Tested Under Four Handling

Conditions . .....................15 5

Grain Hauled by Railroads and

Barges, 1974-85 . .................16 6

Comparison of Rail and Rail-Barge

Rates From Jefferson, Iowa, to New

Orleans in Dollars Per Ton . .......168

Nutritive Value of Corn Fines, by

Particle Size.. . ..................17 3

Blending of Four Soybean Lots to

Make U.S. No. 2, Maximum 13%

Moisture . .......................17 8
Chapter

Technologies Affecting Quality

Producers are constrained by the quality

characteristics of the seeds available to them,

as described in chapter 6. They cannot improve

the intrinsic quality of corn, wheat, or soybeans

once the seeds are planted. Yet they—and others

involved in the distribution of grain—can prevent a deterioration in intrinsic quality and can

determine the sanitary and some of the physical quality characteristics, At each step along

the way, the technologies applied and the way

they are used can prevent, or at least minimize,

a loss of quality.

Farmers who run combines too fast, for example, can damage grain, especially as it dries,

Grain that is either too dry or too wet when

harvested is more susceptible to damage. Precleaning wet grain before it reaches the dryer

would improve the quality substantially, yet few

dryer operators choose to do this, Breakage during handling produces broken grains and fine

materials, which increases storage problems

and the risk of infestation by insects or mold.

Cleaning and blending—the mixing of two or

more grain lots to establish an overall quality--

are the focus of many concerns about the

declining quality of U.S. grain, and indeed

sparked the Grain Improvement Act of 1986.

This chapter therefore looks at these numerous technologies that are applied to grain as

it moves from the field to the export elevator

or the unloading dock of a domestic food or

feed manufacturer. Considered in turn are technologies for harvesting, drying, storing and handling, insect management, transporting, and

cleaning and blending, The conditions farmers

and handlers should strive for in one situation

to maintain and deliver a quality product are

not always appropriate in another case. Higher

moisture content and temperatures are optimal

for minimizing breakage of corn, for example,

but not for safe storage. Giving producers

enough information to consider all these interactions is one objective of this assessment.

HARVESTING TECHNOLOGIE S

Harvesting can be defined as the process by

which grains and oilseeds are removed from

a plant, gathered, and physically removed from

a field. The crop is also threshed (using combines to remove kernels from crop material),

separated, and cleaned.

Self-propelled combines of either conventional or rotary design (figures 7-I and 7-2) harvest nearly all the grain produced in the United

States. Rotary combines damage wheat and soybeans less than conventional combines do, although this is not the case for corn. Combine

sales have dropped from a yearly average of

about 30,000 units during the 1970s to fewer

than 1,700 units in 1986. The weak market has

slowed new combine development due to cutbacks in research and engineering funds.

The first workable combine was developed

and patented in 1836 (54) for use on small

grains, In 1953 two individuals adapted the

combine for use on corn, which until then had

been harvested by picking the ear, The switch

from picking corn by ear to combine shelling/harvesting increased corn production efficiency (52).

Rotary combines were introduced in the mid1970s. The rotary’s ability to use centrifugal separation resulted in fewer moving parts and reduced grain cracking. Today, both designs are

used throughout the United States (57),

Current Technologies

Wheat combines differ from those used to

harvest corn and soybeans. Conventional combines are built in “grain” or “corn/bean” configurations, with different separation functions

in several areas, First, the concave in the corn/

137
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138

Figure 7-1 .—Conventional Combine

Equipped with windrow pickup header: 1—cylinder, 2—concave, 3—beater, 4—beater grate, 5—strawwalkers, and 6—shoe.

SOURCE: G.E. Frehlich et al., John Deere 8520 Titan II self-propelled combine Evaluation Report No. 425, prairie %viculturai Machinery Institute, Saskatchewan,

Canada, 1985.

bean combine has wider gaps than in a wheat

combine to allow the larger seeds. The concave

transition grate is usually a finger-type unit on

corn/bean combines and a cell-type configuration on wheat combines. Second, strawwalkers

in corn/bean combines have a louvered bottom

design because the rectangular openings in the

bottom of wheat strawwalkers are prone to clogging by corn cobs. Finally, the chaffer sieve in

corn/bean combines has deeper teeth on the louvers and wider spacing between louvers.

In areas of the United States that grow wheat

as well as corn or soybeans, corn/bean combines are often used for harvesting wheat. The

extent to which this compromises combine performance is not well documented. The expected

impacts would be lower separation capacity

and poorer cleaning due to the wide-spaced

chaffer and higher cleaning-shoe loads produced by the corn concave.

Conventional self-propelled combines are

most common, although variations in the system have been developed to deal with specific

problems in certain areas of the country. Two

such variations are the practice of windrowing wheat and the development of sidehill and

hillside combines.

Windrowers in the Northern Plains States cut

the wheat and place it in a swath on top of the

wheat stubble, where it is later picked up by

a combine equipped with a windrow pickup

device (figure 7-1) that offers gentler handling

than auger-type headers. Windrowing generally takes place when the wheat is at 30 to 35

percent moisture (54). Although windrowing

is an additional expense, it interrupts weed seed

development, thereby improving weed control

in subsequent years; speeds wheat drying by

up to 2 weeks and can shorten combining time

considerably; and allows the crop to better withstand hail and high winds.

Combines with leveling in both pitch and roll

modes have been developed to accommodate

the tilling of 40 to 70 percent slopes in the Pa-
139

Figure 7-2.—Single-Rotor Rotary Combine

1—Rotor, 2—threshing concaves, 3—separating concaves, 4— rear beater, 5—shoe, and 6—tailings return.

SOURCE: G.E. Frehllch et al., Case IH Self-Propelled Combine Evaluation Report No. 531, Prairie Agriculture Machinery Institute, Saskatchewan, Canada, 1987.

cific Northwest. Such machines are heavily

modified production combines with unique suspensions, drive lines, and feeder modifications.

Sidehill combines with only roll leveling were

developed in the mid-1970s for use on sideslopes of up to 20 percent, and are used primarily on the moderately rolling terrain of the

Midwest.

Conditions Affecting Combine

Performance

To be competitive, combine manufacturers

must achieve an optimal balance between harvest capacity, harvest losses, grain quality, and

operator safety and comfort. Combine fuel efficiency is also a concern, but is not the primary

factor when designing combines. Conditions

such as crop maturity, moisture content, standability, the presence of insects or disease, and

the amount of weeds in the field are the main

influences on combine performance.

Maturity and Moisture

Physiological maturity occurs when grain has

reached its maximum dry weight. Thus, the

grain’s moisture content at harvest directly affects the amount of kernel damage produced

through combining.

Corn maturity is obtained at about 30 to 35

percent moisture. While corn can be harvested

at this point, the soft pericarp will de damaged.

In the Midwest, harvesting is generally not recommended until the corn has field-dried to 26

percent moisture. In some parts of the United

States, such as south Texas, corn field-dries to

acceptable moisture levels and is not a problem. In the Northern States, however, obtaining 26 percent moisture is not possible during

wet fall harvest periods, and corn must be harvested at higher moisture contents.

It is generally recommended that soybeans

not be harvested until they reach 13.5 percent

moisture. Soybeans readily absorb moisture
140

overnight and during high humidity periods.

After first being field-dried to 13.5 percent, soybeans can be harvested at moistures up to 15.0

percent. Soybeans at 14.4 percent moisture in

the morning can easily dry to 11.4 percent by

afternoon (11). Soybeans below 12 percent

moisture are exceptionally susceptible to shatter loss during harvest.

Weeds

The main factor affecting combine cleaning I

[ performance is the amount and type of weeds

present in the field at harvest. Weed control

is one of the most serious problems facing many t

I U.S. wheat-producing areas and southeastern

I soybean-producing areas, where a warm wet

I

climate is conducive to weed growth. The

amount of weeds affects not only yield, but also

the amount of foreign material present in the

harvested grain and the combine’s ability to remove this material.

Weeds types have a direct bearing on yield

and cleanliness. For example, the number of

Hemp sesbainia in soybean fields has a direct

effect on the amount of foreign material in com-

( bine samples (45). At 650 plants per acre, 0.8

I percent foreign material was found; at 52,270

I plants per acre, foreign material increased to

I

f 20,3 percent. In weedy fields farmers usually

increase cylinder/ rotor speed to force the weed

debris through the combine, but this can lead

to increased grain damage.

One way to reduce the amount of foreign material in soybeans due to weedy conditions is

to reduce the combine’s ground speed. It has

been found, however, that in weedy fields (compared with weed-free ones) 50 percent or more

of the soybean pods are located on the lower

6 inches of the plant. Thus, the combine operator has to cut extra low, which increases the

chance of picking up more soil.

Bromus sacalinus (cheat) is a major problem

for winter wheat producers in the central

Plains. One study found that between 66 and

99 percent of the cheat was introduced into the

combine and 41 to 91 percent was delivered

to the clean grain bin (18). Several combine

modifications have tried to overcome this problem. Three cascade gaps in the cleaning shoe

have been introduced in some regions. Other

modifications include secondary cleaners and

precleaning grain prior to delivering it to the

cleaning shoe.

The process of modifying combines to adequately harvest clean wheat from weedy fields

has been complicated by the trend toward

smaller wheat kernel size, which is a concern

because the seeds of most grassy weeds are

smaller and lighter than wheat. Thus, the

smaller wheat kernel size reduces the margin

between wheat and weed size and therefore increases the difficulty of cleaning within the

cleaning shoe (57).

Timeliness of Harvest

Timeliness of harvest often takes precedence

over other factors such as the optimal moisture

content needed for reduced breakage or lower

field losses. Everywhere in the United States

field conditions will permit harvesting for only

a limited number of days. For example, in central Illinois, September and October have had

16 harvesting days in 8 years out of 10, based

on statistical weather records (48,65).

Producers must therefore match combine size

and the number of combines available to the

number of days required to harvest the total

acreage. Thus, when combine capacity is not

available, long hours must be spent harvesting,

which cannot be delayed because of grain moisture. The result of this dilemma is that producers often push the moisture limits, accept higher

levels of kernel damage, and do not adjust combines as crop conditions vary.

In spite of the demands placed on the combine for high-capacity harvesting with minimal

loss, field harvesting is only part of the total

operation. Trucks, wagons, and drivers must

be available to provide timely combine-tank unloading. If the crop must be hauled to a grain

elevator, long truck lines can slow the harvest.

Thus, it is essential to match hauling, drying
141

if needed, and storage capacity with harvesting capacity.

A large percent of the harvest in the Great

Plains is accomplished through custom wheat

harvesting. The biological ripening of wheat

begins in Texas and proceeds up through the

Great Plains, This creates the opportunity for

combines to follow the harvest. With custom

combines concentrated where the crop is ripe,

wheat harvest is completed rapidly and the

crops’ exposure to the elements is lowered.

Combine Adjustments and

Operator Proficiency

The combine is the most demanding machine

to operate on most farms in terms of operational

workload and knowledge required for adjustment and maintenance, Modern combines provides at least 25 adjustments for tailoring the

machine to specific conditions. Seven to ten

of the most frequent adjustments are accessible from the operator’s seat. Operators must

constantly monitor ground speed, cutting

height, reel speed, and reel height as the machine moves through the field. In addition, crop

conditions can demand readjustment within

the same field on the same day.

Cylinder/rotor speed can be adjusted by the

operator and varies by crop, varieties, and moisture content. Generally, as moisture decreases,

threshing speed should also be decreased, Concave settings must always be slightly larger than

the size of the grain being threshed. A concave

setting that is too narrow causes severe kernel

grinding-like damage; if it is set too wide, kernels will be left in the head, on the cob, or in

the pod, contributing to high threshing losses,

The extent to which combine operators understand and appreciate the interactions between combine components and adjustments

varies widely. Because of the ease by which a

nonoptimal cylinder/rotor speed can be confused with an incorrect concave setting, considerable operator experience is required when

the goal is to maintain low grain damage and

low header, threshing, and separating losses.

Effects of Harvesting Technologies

on Grain Quality

The primary quality factors affected by combine harvesting are grain damage (which includes damage to the pericarp, broken kernels,

internal cracks, and splits) and cleanliness.

Grain damage is linked with threshing and handling components within the combine; cleanliness can be attributed to header height and

to separating and cleaning components.

Grain Damage

Cylinder speed, moisture at harvest, and the

amount of grain damage are all interrelated.

In general, damage occurs whenever grain is

harvested. It increases significantly, however,

on extremely wet or extremely dry grain. When

grain is harvested at high moisture levels, the

kernel is soft and pliable. Moist kernels deform

easily when a force or impact is applied, and

a greater force is needed to thresh wet kernels

than dry ones, so they suffer more damage.

Drier kernels, however, can break when the

same force is applied, Therefore, optimal conditions exist for each grain when cylinder speed

and moisture are balanced.

The impact of cylinder/rotor speed on corn

breakage varies by moisture level (figure 7-3),

As moisture decreases, the impact increases.

Breakage is higher at extremely high and low

moistures regardless of cylinder/rotor speed.

For wheat, the same principles apply: Cylinder/rotor speed increases wheat breakage, and

the impact is more pronounced on wheat moistures of 14.6 percent than 18.9 percent, For all

grains, cylinder/rotor speed must be reduced

at lower moisture levels to minimize grain

damage.

The type of combine (rotary or conventional)

affects grain damage in wheat and soybeans.

Several studies have demonstrated reduced

damage from some rotary combines compared

with conventional combines, One study on the

amount of split soybeans from two types of rotary combines and a conventional combine
142

Figure 7-3.—Corn Breakage v. Kernel Moisture Content for Laboratory Rasp Bar Sheller

Operated at Varying Speeds

●

-40 30 20 10

Kernel moisture content, (%)

SOURCE: G E Hall and W H Hohnson, “Corn Kernel Crackage Induced by Mechanical Shelling,” American Society of Agricultural Engineers 13(1), 1970

demonstrated the reduced amount of splits

using rotary combines (47). Studies on rotary

and conventional combines for wheat indicate

a two-third reduction in grain damage using

rotary combines (57). Studies of corn breakage

using the two combine types have not shown

any significant differences (52).

Cleanliness

Three combine components directly affect

the combine’s ability to harvest and deliver

clean grain: header height, separating, and

cleaning shoe.

Header height must be set to operate near or

at ground level. This is particularly true when u

harvesting certain varieties of soybeans with

pods set very low on the stalk. Cutting below

the lowest pod or wheat head inadvertently introduces some soil into the combine. Most soil

is aspirated out the rear of the combine unless

it is about the same size as the kernel. In these

cases, soil particles pass through the cleaning

sieves with the grain.

Material that is fed onto the cleaning shoe

after passing through the cylinder concave or

strawwalkers is divided into three streams.

Whatever does not move through the top sieve

(chaffer) passes out the rear. Grain and other

plant parts that pass through the chaffer but

not the cleaning sieve are routed back to the
143

cylinder/rotor for rethreshing. Grain that passes

through the cleaning sieve is conveyed to the

clean grain tank. Aspiration (using fans) is also

used in this process to remove light material,

If the fans are set too high, grain maybe drawn

off along with the lighter material.

This process removes material larger than the

grain (such as plant parts) and material significantly smaller (like sand and dirt), Sloping terrain, as previously discussed, can affect this

process. In wheat, the amount of foreign material increases as the angle of the cleaning shoe

decreases (59). Side slopes also create problems

since the tendency is for material to congregate

on the downhill side of the cleaning shoe.

New and Emerging Technologies

Changes in harvesting technology have been

evolutionary rather than revolutionary, For example, the rotary combines were widely publicized as a major breakthrough, yet studies of

centrifugal separation had been conducted

some 15 years earlier. With declining combine

sales over the past 8 years, revolutionary

changes are even less likely.

Current harvesting technology provides combines capable of obtaining low grain damage

levels and reduced foreign material with acceptable losses, The problem remains in getting

operators to run the machines at the lowest

grain damage level the combine is capable of

delivering. The major advance in this area is

through new control systems and automation,

One recent aid for improving harvesting has

been the introduction of grain loss monitors.

These are mounted behind the combine’s separation and cleaning sections and electronically

sense the number of kernels that hit a small

acoustical pad. Loss monitors have been marketed as a means of reducing threshing and separating losses. They can, however, aid operators in reducing threshing speed until losses

become noticeable, thus reducing grain damage. Since grain damage increases as threshing speed rises, cylinder/rotor speed must be

reduced as grain dries until threshing losses,

observable on the grain loss monitor, start to

increase (52),

Information sensors are commonly provided

as original equipment on newer combines. Such

sensors include digital readout of cylinder/rotor speed, fan speed, feeder shaft speed, reel

speed, engine speed, and ground speed. Several manufacturers now have warning lights

for speed reductions of the fan, cylinder/rotor,

discharge beater, straw chopper, feeder, rear

beater, clean grain elevator, and return elevator. When this information is received, operators can now make adjustments from the operator station, but they still must decide if changes

are needed.

Low-cost microcomputers and improved sensors mean many of the current operator decisions will soon become automatically controlled by computers. A limited number of

computer-assisted programs are already available to assist operators in selecting proper combine settings.

DRYING TECHNOLOGY

Cereal grains and oilseeds are harvested in

the United States at moisture levels too high

for long-term storage or even short-term storage and transportation within the marketing

system. Corn, which is harvested at 20 to 3 0

percent moisture, must be dried to 14 to 15 percent for safe storage. Wheat and soybean harvest moistures are substantially lower than

corn, with safe storage levels marginally lower

than harvest moisture. Since wheat (and, in

some cases, corn and soybeans) dries naturally

in the field in some parts of the country, this

discussion mainly concentrates on drying technologies as they relate to corn.

Considerable moisture is removed from grain

during drying. When taking corn from 25 t o

15.5 percent moisture, 122 kilograms of water
)

,

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I

144

are removed per metric ton. Drying grain in

the United States takes place on farm as well

as off farm in commercial handling facilities

using ambient air as the drying medium. Onfarm drying systems are usually lower in

throughput than off-farm units and frequently

employ lower drying-air temperatures.

Dryer design depends on grain type. The requirements for drying-air temperature, airflow

rate, and the time the grain remains in the dryer

differ for wheat, corn, and soybeans. Drying

wheat in a corn dryer without modification will

lead to a significant decrease in wheat quality,

It is generally agreed that the bulk of grain

quality deterioration happens during drying (6).

Too frequently, excessively high-drying-air temperatures and airflows are used to speed the

process. This leads to excessive stress cracking in corn and soybeans and degradation in

the milling quality of wheat.

On-Farm Drying Systems

Cereal grains and oilseeds are mainly dried

on-farm in the United States. Indiana is typical: In 1984, less than 5 percent of the States’s

corn was dried off-farm (37). On-farm systems

fall into three broad categories: bin dryers, nonbin dryers, and combination systems.

Bin Dryers

Bin dryer systems include: 1) in-bin natural

air, 2) in-bin low temperature, 3) solar, 4) inbin storage layer, 5) in-bin counter-flow, and

6) batch-in-bin. They all use a bin to hold wet

grain as it is dried. The drying-air temperatures

of the first four systems are relatively low, while

the last two need temperatures as high as 70 “C.

In-bin natural air, low temperature, and solar drying systems are similar (figures 7-4). Wet

grain is placed in a bin to a depth of 2.5 to 5.0

meters and slowly dried using an external fan

as the airflow source. Each system can produce

high-quality grain. However, minimum airflow

rates are critical for their success; these depend

on the initial moisture content, harvest date,

and environmental conditions. Airflow rates

vary by location and, consequently, farmers

Figure 7-4.—in-Bin Natural. Air Grain Drying System

Perforated floor

SOURCE F W Bakker-Arkema, “Grain Drying Technology, ” background paper

prepared for the Office of Technology Assessment, U.S. Congress,

Washington, DC, 1988

need considerable expertise to operate these

systems properly by selecting the correct airflow rate. Slower drying than the required rate

can lead to grain molding before safe storage

levels are reached.

In-bin storage layer drying differs slightly

from natural air drying. Rather than filling a

bin all at once with wet grain, successive layers

are placed in the bin after the preceding one

has almost reached the desired moisture content. Like natural air drying, this drying system has low capacity, requires considerable

operator expertise, is energy-efficient, and can

produce excellent quality grain when operated

properly.

In-bin counter-flow drying is relatively new

and consists of two bins (figure 7-5). One is a

heated air in-bin counter-flow dryer and the

other is a natural air in-bin dryer and cooler.

Wet grain is loaded into the first bin and dried

until the bottom 10 centimeters has reached 16

to 18 percent moisture. The partially dried, hot

grain is then moved to a second bin for slow

final drying and cooling. The automatic nature

of this process, along with the ability to produce quality grain at fairly high capacities, has

contributed to the commercial success of inbin counter-flow dryers.

Batch-in-bin dryers differ from in-bin counter-flow dryers in that they lack the second dry-
745

Figure 7-5.— In-bin Counterflow Grain Dryer

SOURCE F.W. Bakker-Arkema, “Grain Drying Technology, ” background paper

prepared for the Off Ice of Technology Assessment, U.S. Congress,

Washington, DC, 1988

ing and cooling bin, Airflow rates and drying

temperature are similar, but the energy efficiency as well as the grain quality characteristics are poorer (4).

Non-bin Dryers

Non-bin dryers are either portable batch or

continuous-flow dryers. Over half the U.S. grain

crop is dried (both on and off farm) in these

two types (6). They utilize drying air temperatures in excess of 100 ‘C or more and airflow

rates over 110 cubic meters per minute per ton.

Thus, the drying rate is high, but the resulting

grain quality is often lower,

portable batch dryers consist of a plenum surrounded by a 30 to 40 centimeter grain column

(figure 7-6). Hot air traverses the grain layer

quickly and in the process overheats and overdries part of the grain column. The batch is removed from the dryer as soon as the desired

final moisture content and temperature are

reached. A portable batch dryer is comparable

to in-bin batch dryers except that grain is dried

at higher temperatures and airflow rates due

to the reduced depth of the grain layer.

Continuous-flow dryers are predominantly

of the crossflow type (figure 7-7). The drying

air flows perpendicular to the grain flow

through the dryer. The plenum/grain column

Figure 7-6.— Portable Batch Grain Dryer

Temperature

control

SOURCE F W Bakker-Arkema, “Grain Drying Technology, ” background paper

prepared for the Office of Technology Assessment, U S Congress

Washington, DC, 1988

Figure 7-7.—Continuous-flow Crossflow Grain Dryer

SOURCE: F W Bakker-Arkema, ‘“Grain Drying Technology, ” background paper

prepared for the Off Ice of Technology Assessment, U S Congress,

Washington, DC, 1988
146

t

,

is similar to that in a portable batch dryer. Cooling takes place in the bottom one-third of the

drying column. Airflow rates and drying temperatures are the same for both types; the only

difference is the grain velocity.

Continuous-flow crossflow dryers do not dry

grain uniformly because a large moisture gradient exists across the grain column when drying is discontinued. During the cooling cycle,

the degree of nonuniformity decreases, but a

definite moisture differential among kernels

still exists when the grain leaves the dryer. In

one study, when drying 25 percent corn at

110 °C to 16 percent average moisture, the

corn’s moisture content at the air inlet side of

the grain column reached 8 percent. At the air

outlet side, the grain was still at 22 percent, thus

creating a moisture gradient of 14 percent (24).

As table 7-1 indicates, part of the grain in a

crossflow dryer approaches the drying-air temperature, which results in overdrying and sharp

increases in breakage.

Combination Drying

Combination drying is a system in which

high-temperature, high-speed batch or continuous-flow drying is followed by low-temperature, slower in-bin drying and cooling. This

attempts to maximize the advantages and minimize the disadvantages of the two systems.

Combination drying is mainly used for corn.

When corn is harvested in the 22 to 35 percent

range, it is dried in a high-temperature dryer

to an intermediate moisture content of 18 t o

24 percent and then moved hot to an in-bin

dryer and slowly final dried and cooled. The

in-bin dryer usually is a natural air dryer. The

best known type of combination drying is dryerTable 7-1 .—Grain Temperature, Moisture Content,

and Breakage Susceptibility at Different Locations

in the Grain Column of a Crossflow Dryer

Distance Grain Moisture Breakage

from air temperature content susceptibility

inlet (cm) (°C) (in percent) (in percent)

1.25 . . . . . . . . . 102 10 48

7.50. . . . . . . . . 78 20

13.75 . . . . . . . . . 51 24 10

SOURCE: R J. Gustafson et al , “Study of Efficiency and Quality Vanatlons for

Crossflow Drying of Corn, ” ASAE Paper No 81-3013, 1981

ation (figure 7-8). The two main advantages of

combination drying over non-bin dryers are the

increased energy efficiency and improved grain

quality.

Off-Farm Drying Systems

Grain dryers located off farm in commercial

handling facilities are non-bin continuous-flow

models. Three types are currently in use: crossflow, mixed flow, and concurrent flow.

Crossflow

Crossflow dryer design was discussed in the

on-farm section, The distinguishing feature

here too is the perpendicular direction of the

grain and airflows, which results in nonuniform drying. Recent design improvements

for off-farm crossflow dryers have improved

grain quality and energy efficiency.

In a conventional crossflow dryer, the discharged air is only partly saturated, Recycling

part of the drying air and all of the cooling air

greatly decreases energy requirements. Along

with air recycling, airflow reversal has been

incorporated in some crossflow dryers in order to offset the large moisture differential in

the grain column. Placing a grain inverter in

the grain column is less expensive, but also less

effective. Grain inverters turn the overheated

grain at the air inlet side to the air exhaust side

of the column and thus minimize overheating

(50). Crossflow dryers without air reversal or

grain inverters have moisture gradients across

the drying column as large as 20 percent and

grain breakage as high as 50 percent (24).

Two new features added recently to the basic

cross flow design—differential grain speed and

tempering—improve grain quality (40). A crossflow dryer incorporating air recycling, air

reversal, differential grain speed, and tempering is commercially available, but its high initial cost is preventing general acceptance.

Mixed Flow

Mixed-flow dryers are also called cascade or

rack-type dryers, Grain is dried by a mixture

of crossflow, concurrent flow, and counterflow
147

Figure 7-8.— Dryeration Grain Drying Systems

Full bin

Layer

Batch-in-bin cool

with

recirculator

or stirrer

with

aeration

Dry

SOURCE F W Bakker.Arkema, “Grain Drying Technology,” background paper prepared for the Off Ice of Technology Assessment, U.S. Congress, Washington,

DC 1988

drying processes. The grain flows over a series of alternate inlet and exhaust air ducts. This

results in fairly uniform drying and therefore

a relatively uniform moisture content and quality. The drying temperature in mixed-flow dryers is higher than in crossflow ones because

the grain is not subjected to the high temperature for as long.

Mixed-flow dryers are more expensive to

manufacture and require more extensive air

pollution equipment. For these reasons, the

number of mixed-flow dryer manufacturers has

decreased in the United States. In other countries, mixed-flow dryers remain the predominant large continuous-flow dryer (6).

Concurrent Flow

In concurrent-flow dryers the grain and drying air flow in the same direction (vertically),

Cooling occurs in a concurrent-flow cooler in

which the grain and air flow in the opposite

direction. Commercial concurrent-flow dryers

consist of two or three concurrent-flow drying

zones and one counterflow cooler (figure 7-9).

The most distinguishing feature of these

dryers is the uniformity of the process. Every

kernel undergoes the same heating/drying/cooling process, unlike in crossflow and mixed-flow

dryers. The drying-air temperature is much

higher than in other dryers because the wet

grain is subjected to the hot drying air not for
148

Figure 7-9.-Two-Stage Concurrent-Flow Grain Dryer

With Counterflow Cooler and One Tempering Zone

Rice

in

+ I Heater Fan Ambient

air

First-stage A

concurrent

drying

I I

I Tempering I I

1 I

I drying I Air I

recycling I

i I

Rice

out

SOURCE: F W Bakker-Arkema, “Grain Drying Technology,” background paper prepared for the Office of Technology Assessment, U S Congress, Washington, DC, 1988

hours (crossflow dryers), or minutes (mixedflow dryers), but only seconds. Thus, the grain

does not approach the temperature of the drying air, as it does in other types.

The uniform, relatively gentle grain drying

and cooling in concurrent-flow dryers results

in dried grain of superior quality (table 7-2).

Breakage susceptibility in concurrent-flow dryers is half that of mixed-flow and one-fourth

that of crossflow dried corn.

Conditions Affecting Dryer

Performance

Dryer performance is affected by physical,

biological, economic, and human factors. Each

can have an impact on grain quality.

PhysicaI Factors

The physical factors affecting drying performance are climate and weather. The climate

determines the type of hybrids that can be

grown in a particular region, the expected moisture content range, and the weather at harvest.

Initial grain moisture entering a dryer has a significant effect on dryer performance. Not only

are dryer capacity, energy consumption, and

operating costs influenced by the initial moisture, so is grain quality. When grain is harvested

above or below its optimum harvest moisture,

quality losses during drying increase (12). Thus,

in Northern States, where harvest moistures frequently exceed optimum value, corn and soybean quality is inherently inferior to that of

grains grown, harvested, and dried in the Central Corn Belt States.

Certain years will be wet in the summer and

fall and result in grain with excessively high

moisture content reaching the dryers, This

leads to lower dryer capacity, higher energy

consumption, higher drying cost, and decreased grain quality. Weather conditions have

a direct effect on the performance of some onfarm bin dryers. These low-capacity systems

may not be able to dry wet grain before molding sets in (58). Off-farm systems are less

directly affected by weather conditions.

BiologicaI Factors

Two biological factors affect dryer performance: grain type and genotype. First, wheat

dries most rapidly and corn most slowly. A

concurrent-flow dryer has a 23 percent higher

throughput for wheat than for corn while operating at the same drying temperature. The maximum drying temperature for corn is substantially higher than that for wheat, thus affecting

the quality of these two grains differently. Also,

energy use is affected by grain type.

Genotype determines the drying rate of single corn kernels (64). Some genotypes dry

slowly and others dry fast. Dryer capacity and

fuel efficiency are higher with new genotypes.

Drying rates for wheat and soybeans, however,
149

Table 7-2.—The Effect of Dryer Type on the Drying-Air Temperature,

the Maximum Grain Temperature, and the Breakage Susceptibility of Corn

Drying-air Maximum Breakage

temperature grain temperature susceptibility

Dryer type ( c) ( c) (percent)

Crossflow . . . . . . . . . . . . . . . 80-110 80-110 20

Mixed-flow . . . . . . . . . . . . . 100-130 70-100 10

Concurrent-flow . . . . . . . . . 175-285 60-80 5

SOURCE F W Bakker.Arkema. ‘ Grain Drvtna Technoloav, ” background Da~er DreDared for the Off Ice of Technoloav Assess

ment U S Congress, Washington DC 1988 ‘“ -

are not influenced by genotype (46). Breakage

susceptibility after drying also varies by genotype (5 I ,63). Table 7-3 shows that a fivefold increase in breakage susceptibility may occur

when switching genotype.

Economic Factors

Economics can affect dryer performance by

influencing fuel prices and availability. The

relative price of natural gas, fuel oil, liquid propane, and electricity varies from year to year.

At the present time, natural gas is the least expensive and electricity the most expensive

energy source in the United States. The type

used affects dryer operation because it influences burner efficiency and drying-air quality.

Grain dryers are directly heated in the United

States, while indirect heating grain drying systems are common elsewhere. Indirect heating

uses heat exchangers and is less energy-efficient, more costly, and less grain polluting than

direct heating. It is used to prevent absorption

by the grain of polycyclic aromatic hydrocarbons contained in the drying air. Of the three

fossil fuels commonly used in direct-heated dryers in the United States, only fuel oil causes

hydrocarbon absorption by grain (35).

Table 7-3.–Breakage Susceptibility of

Different Corn Genotypes

Breakage susceptibility

Genotype (percent)

FRB 73 FR 18. . . . . . . . . . . . . . . . . . . . . 23.5

FRB 73 PA 91 . . . . . . . . . . . . . . . . . . . . . 10.5

FRB 73 FR Mo 17 . . . . . . . . . . . . . . . . . 7.5

FR Mo 17 x Fr 634 . . . . . . . . . . . . . . . . . . 4.3

SOURCE M R Paulsen “Corn Breakage Susceptlbll!ty as a Function of Moisture

Content “ ASAE Paper No 83.3078 1983

Grain drying is a complicated heat/mass/momentum transfer process of a heat-sensitive biological product and is frequently not well understood by the average dryer operator. At most

commercial handling facilities, the dryer operator job is seasonal: It requires 12-hour days,

7 days a week, for 2 to 3 months. The pay rate

is marginal and job training is usually by trial

and error. Therefore, it is not surprising that

dryer maintenance, supervision, and operation

are far from optimal. All these factors affect

the performance of the typical dryer with respect to capacity, energy efficiency, and grain

quality (5). The most frequent mistake is using

excessively high temperatures in order to increase dryer capacity.

Auxiliary Factors

Several auxiliary equipment (instrumentation) items influence grain dryer performance,

Included here are the grain moisture meter, the

air temperature meter, and the dryer controller.

Moisture meters are an integral part of the

grain drying system. Electronic meters are used

at grain handling facilities. Meters commercially available have an accuracy of ± 1 percent at the 13 to 16 percent moisture range and

± 2.5 percent at higher moistures (34). This contributes substantially to overdrying or underdrying of grain.

Air temperature measurement in a grain

dryer is usually accomplished by a single thermocouple or thermistor, an acceptable practice when the temperature distribution in the

dryer plenum is uniform. This is not the case,
150

however, in many off-farm dryers (2) or on-farm

models (58). Temperature differences of 20 to

35 °C in the plenum are not uncommon, resulting in overheating of part of the grain column

and deterioration of average grain quality.

Controlling dryers is usually manual, and

overdrying is frequently the result. Automatic

control systems have recently become commercially available for in-bin and continuous-flow

grain dryers. Their use leads to savings in

energy and drying costs and limits the degree

of overdrying and grain quality deterioration.

New and Emerging Technologies

Some new and emerging drying technologies

have the potential for a significant impact on

overall grain quality, especially in corn. Combination drying has already been discussed,

along with its ability to improve corn quality

at the farm level. Although the procedure has

been known for a decade, it is still used only

sparingly because of the more demanding logistics and additional grain-handling equipment required. No other promising technology

appears to be on the horizon for on-farm grain

drying.

Mixed-flow and concurrent-flow drying are

off-farm drying technologies that produce

higher quality grain than the standard crossflow dryers do. Both dryer types are commercially available in the United States. Their high

initial cost (10 to 20 percent more than comparable crossflow dryers) has thus far prevented

their widespread use. The same can be said for

automatic moisture controllers. If the payback

period of these technologies can be shortened,

rapid market penetration can be expected (6).

Two off-farm systems not used in the United

States for corn are the fluidized-bed dryer and

the cascading-rotary dryer (figures 7-10 and 7-

11). A fluidized-bed grain dryer was at one time

commercially available in the United States, but

production was discontinued due to high electricity costs and excessive air pollution. The

cascading rotary dryer is used in the United

States to dry parboiled rice. High initial and

Figure 7-10.--Fluidized-Bed Grain Dryer

Air exit

Dryer

Star

Air in

Disperser plate from fan

Heater

SOURCE: F W. Bakker-Arkema, “Grain Drying Technology,” background paper

prepared for the Office of Technology Assessment, US. Congress,

Washington, DC, 1988.

Figure 7-11 .—Cascading-Rotary Grain Dryer

Quench

air

To cyclones

and fan.

Dry product

SOURCE: F.W. Bakker-Arkema, “Grain Drying Technology,” background paper

prepared for the Off Ice of Technology Assessment, U S. Congress,

Washington, DC, 1988.

maintenance costs plus high energy consumption characterize the U.S. rotary dryer design.

At least two companies have experimented

with microwave grain dryers, but both have

marketed commercial models without success.

The advantages of low energy consumption and

high grain quality were offset by high initial

cost and low product throughput. It is unlikely

that microwave grain dryers can compete with

conventional drying techniques as long as the

economic return of improved grain quality remains low.

A technology that could aid the drying rate

of corn is the use of ethyl oleate and ethyl ole-
151

ate/ethyl sterate mixture. Small-scale prelimi- drying rate. The National Corn Growers Assonary tests show that these chemicals applied ciation is coordinating a series of larger scale

to high moisture corn significantly increase the tests of the chemicals at several universities.

STORAGE AND HANDLING TECHNOLOGIES

The usual surplus of U.S. grain means storage is required for longer and longer periods.

With the increasingly large carryovers and the

necessity to store more grain for more time,

grain could be stored for a year or longer. Grain

is a perishable commodity with a finite shelf

life. Storage can only extend that shelf life, not

improve it.

The total U.S. grain storage capacity in 1987

was about 23 billion bushels. Of this 14 billion

are located on farm, and the other 9 billion off

farm (56). Illinois leads in off-farm capacity,

followed by Iowa, Kansas, Texas, and Nebraska

(l). These States account for 53 percent of all

off-farm storage. The number of off-farm storage facilities totaled 13,873 on December 1,

1987. Smaller proportions of wheat and soybeans are stored on farms (31 percent for wheat

and 25 percent for soybeans) than of corn (47

percent), Major wheat-producing States in the

Southern Plains tend to have more wheat stored

off farm in commercial facilities than the Northern Plains States. Over 80 percent of the corn

and soybean inventories are stored in the major corn- and soybean-producing States.

Current Technologies

Grain is stored in buildings or piles for future marketing and in transportation modes en

route to destination. A wide variety of sizes and

types of structures are used. The basic storage

types can be classified as upright concrete or

metal bins (vertical storage), buildings (horizontal or flat storage), and onground piles. The handling equipment used in each type is similar.

Handling Equipment

Handling equipment can be broken down

into two categories, based on grain movement

direction: vertical or horizontal (56).

The belt bucket elevator using an elevator leg

is the primary means of moving grain vertically

in commercial grain facilities. The leg consists

of a vertical endless belt with buckets spaced

evenly all along it. The buckets are filled by

scooping up the grain at the bottom (boot) of

the leg. Grain is discharged at the top by centrifugal force as the buckets pass over the top

(head) pulley. Recent elevator designs have

eliminated the need for traditional elevator legs

by introducing incline belts to move grain vertically, After discharge, the grain flows by gravity through spouting or horizontally by belts

or other conveying devices.

Commercial elevators using elevator legs or

incline belts are available in any size and capacity to meet the vertical lift requirements of

both large and small facilities. Elevators using

legs can operate relatively economically at less

than their rated capacity, unlike some other

grain-handling devices. There is no problem

with increased grain breakage resulting from

legs being used at less than rated capacity. The

amount of grain breakage occurring in elevators using legs is affected by the type and size

of the buckets, belt velocity, and transfer loading of the buckets. Overloading the buckets

causes spillage and can increase kernel

breakage.

Loading grain on the up side of the leg causes

more damage than loading on the down side

(20), which should be a consideration for elevators handling corn. For wheat, no difference

can be detected as long as the leg is operated

at normal speed.

Belt conveyors are the primary means of moving grain horizontally in most commercial facilities and, as mentioned, are becoming increasing popular for vertical lifting. They

consist of an endless belt supported by rollers
152

,

I

I

t

I

I

I

1

and driven by a shaft-mounted speed reducer

motor. They are usually open, but may be covered when used outside a building. Belt width

varies and can be operated at 500 to 550 feet

per minute. Conveyors can be inclined up to

15°, but should be horizontal at the point of

loading. They can accommodate a wide range

of speed or volume demands, are energy-efficient, and have relatively low maintenance and

operating costs. Grain breakage is minimal

when moved this way. Most belt conveyors are

used in fixed installations, but portable inclined

models are available for use in loading flat

storages.

Other types of conveying equipment include

drag flight, screw auger, and pneumatic conveyors. Drag flight conveyors are enclosed

tubes in which a chain with paddles or flights

moves. The chain is driven by a shaft and

sprocket in the head discharge section with an

idler shaft and sprocket in the tail section to

maintain tension on the chain. As the flighting

moves, it carries grain along with it.

Drag conveyors are available in a wide range

of sizes and capacities and as fixed or portable

models. They are relatively inexpensive, easy

to load, move grain at low velocities, and require less space than conventional belt conveyors. Since they are enclosed, they are subject to higher levels of insect infestation than

belt conveyors are, The demand for low-cost

conveyors has resulted in a substantial increase

in the use of drag conveyors.

Screw auger conveyors have for many years

been the principal means of moving grain on

farm or where inexpensive portable equipment

is needed. They consist of a round tube with

a continuous spiral or screw inside and can be

powered by farm tractors or electric motors.

They are space-efficient and portable, and can

move grain horizontally or at relatively steep

angles. On the negative side, they have high

power requirements and can cause considerable grain breakage, depending on the design

and operation of the auger.

Pneumatic conveying is a system that moves

grain by air inside a pipe. The air-moving device must be able to provide the air velocity and

sufficient pressure to overcome the airflow resistance and the resistance of the grain to flow

through the system. Pneumatic system capacity is a function of conveyor size, power supplied, and the vertical or horizontal conveying

distance. Pneumatic conveying normally requires more power than bucket legs. Factors

that increase grain breakage include air velocities, poor pipe joint connections, and overloading the air-lock feeders. As with other handling

equipment, breakage is not as great a concern

for wheat as for corn. Pneumatic systems are

not widely used in commercial facilities mainly

because of the high energy input and power

cost.

Storage Types

The most common and easily managed storage type is upright concrete or metal bins (32).

Bin sizes can range from as little as 3,000 bushel

farm bins to over 500,000 bushel bins at commercial facilities. Upright bins are generally

filled from the top and unloaded from the bottom by gravity flow. Bins can be various

heights, with deep concrete bins ranging from

98 to 164 feet. The bottoms can be flat or constructed with hoppers. Flat bin bottoms require

the manual removal of grain left over after gravity flow has ceased. Most commercial bins have

hopper bottoms that allow complete grain removal without assistance. Configurations can

range from one or more individual farm bins

to a multitude of bins tied together with handling equipment in commercial facilities.

Horizontal systems have long been used for

extended storage. These buildings may be constructed of metal, wood, concrete, or any combination of these materials. Horizontal storages

usually have flat floors and are filled from conveyors in the roof or by portable incline belts.

The grain is removed by conveyor tunnels in

the floor and manual movement with front-end

loaders. Movement into and out of these buildings is very labor-intensive. Grain depth is lower

in horizontal storage than in most upright commercial bins. Storing grain in large buildings

creates additional problems in that the large

roof area increases the risks of water leaks.

These types of structures can stand alone or
be tied in with upright bins in commercial facilities.

Grain can also be placed in piles directly on

the ground or on pads and can be either covered (usually with a vinyl tarp that provides

some protection from the elements) or left uncovered. Piles can be contained by fixed or movable sloping walls or circular rings. Any type

of onground pile is difficult to load and unload

and is very labor-intensive.

Quality Problems That Arise

During Storage

Grain quality can be compromised by physical damage during handling and by biological

agents (mold and insects) during storage. Grain

damage during handling stems from breakage,

which produces broken grains and fine materials, Storage problems increase when this happens, and damage from molds and insects is

more likely to occur with higher amounts of

these materials.

Insects create numerous problems in stored

grain:

● economic losses because of the amount of

grain consumed,

• wastes left behind in the grain,

● insect fragments in finished products, and

. grain heating,

Insects’ metabolic processes can raise grain

temperatures and moisture to ideal conditions

for mold growth. In addition, another problem

arises from the residues of pesticides used to

control insects. (Insect control is covered in the

next section of this chapter.)

When molds grow they produce heat, moisture, and carbon dioxide. The heat and moisture provide even better growing conditions

and the molds proliferate. Molds are parasites

that obtain their sustenance from the grain they

grow on. Grain quality is affected in that mold

growth creates damaged kernels, deposits toxic

substances, and creates a loss in dry matter,

with accompanying decreases in density.

Interactions between moisture, temperature,

and relative humidity spurs mold growth and

153

increases insect activity. Basically, a grain moisture in equilibrium with 65 percent relative humidity will support mold activity. Different

grains will create the optimum relative humidity at different moisture levels, which is why

soybeans cannot be stored at the same moisture content as corn (figure 7-12).

Many fungi species can develop in stored

grain and each has its own requirements for

growth. Aspergillus flavus is a prime example

in corn. This species produces aflatoxins when

humidity is at 75 to 85 percent (15). Other species grow at lower humidities and temperatures, Fungi are more sensitive to moisture content than to temperature, with some species still

active at near-freezing temperatures but high

humidities.

Additional biochemical changes accompany

damage from mold and insect invasion. A linear relationship has been established between

free fatty acid content in soybeans and damage (38). In wheat, heating grain destroys gluFigure 7-12.-Moisture, Temperature, and Relative

Humidity Interactions

Percent relative humidity

SOURCE: Office of Technology Assessment, 1989

88-378 - 89 - 6
154

ten protein functionality. Damaged kernels may

or may not reduce feed value per unit of weight;

studies have reported varying results. Moldy

kernels have a greater risk of containing one

or more toxins.

Moisture weight is lost during routine aeration. Also, when grain spoils, it heats, and the

heat liberated is capable of evaporating additional water. Investigations suggest that as

damaged kernels increase, additional weight

is lost. Kernel weight and density also reflect

loss in dry matter. One study reported a 1 to

2 pound test weight loss in the entire grain mass

from typical insect infestation (61).

Increases in damaged kernels and reductions

in test weight are exponentially related to grain

moisture and temperature (60). This research

led to development of an Allowable Storage

Time Table for corn (table 7-4). At the end of

the Allowable Storage Time, corn will be on

the verge of dropping one grade as defined by

the U.S. Standards for Corn and will have lost

about 0.5 percent of its original dry matter

weight.

Neither grain temperature nor the moisture

content of a spoiling mass remain constant over

time (15). Other recent studies show that mold

toxins can be produced before the Allowable

Storage Time is reached. Extensive work to develop an Allowable Storage Time Table for

wheat and soybeans has not been done. However, the basic principles are the same; the only

differences would be the moisture content and

number of days.

Storage Techniques That Protect

Grain Quality

Controlling Breakage

Research has shown that breakage during

handling is more significant in corn than in

wheat and soybeans (43). Drop height in freefall and spouting tests were found to be the most

significant variables, with the largest amount

of breakage occurring when dropping grain

against a hard surface. Higher moisture content and temperatures are the best conditions

for minimizing breakage, but these are not optimal for safe storage.

The National Grain and Feed Association has

found that “repeated handlings showed that the

amount of breakage was cumulative and remained constant each time grain was handled

or dropped: This was found true whether or

not the broken material was removed from the

test lot before subsequent handling” (43). It also

found that belt speed in bucket elevators has

no measurable effect on grain damage, but grain

thrower tests show breakage increased with increased belt speed. Tests for impacts showed

slightly less breakage against wooden bulk

heads than against steel ones. Grain breakage

was also found to increase in screw conveyors

not operated at full capacity. Three factors must

be controlled to reduce the amount of breakage:

1. velocity,

2. repeated handlings, and

3. impact surface.

Table 7-4.—Allowable Storage Time for Corn

Corn moisture (percent)

Grain temperature (oF) 18 20 22 24 26 28 30

days in storage

30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 648 321 190 127 94 74 61

35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 432 214 126 85 62 49 40

40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 288 142 84 56 41 32 27

45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192 95 56 37 27 21 18

50 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128 63 37 25 18 14 12

55 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85 42 25 16 12 9 8

60 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 28 17 11 8 7 5

65 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 21 13 8 6 5 4

70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 16 9 6 5 4 3

75 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 12 5 4 3 2

80 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 9 4 3 2 2

SOURCE: Midwest Plan Service, “Low Temperature and Solar Grain Drying, ” Iowa State University, Ames, 1A, 1980.
Grain velocity is considered the most important factor to be controlled (table 7-5).

Monitoring Moisture Content

Molds will grow on any kernel or group of

kernels that provide the right conditions. Moisture content and uniformity within storage facilities is therefore critical to maintaining grain

quality. As demonstrated by the Allowable Storage Time Table for corn, knowledge of the moisture content is a key element in determining

storability. Moisture uniformity within a storage facility, on the other hand, is subject to the

limitations of measurement equipment and the

ability to segregate differing moisture levels

within the facility.

Moisture meter accuracy was discussed in

the drying technologies section of this chapter. The meters provide average readings, but

moisture levels within a grain sample can vary

greatly. This can lead to false assumptions and

hamper appropriate actions based on the average moisture reading, especially when handling

nonuniformly dried corn that has been blended

with high and low moisture levels and when

handling freshly harvested corn. The problem

is compounded by the fact that the moisture

content of corn kernels on one ear can vary

from 1 to 4 percent. Also, moisture will never

fully equalize, If the spread from high to low

is 4 percent, moisture will equalize within 1

percent (49). The net result is that moisture variation in a grain sample cannot be detected and

the diversity of moisture being placed into storage cannot be controlled.

Nonuniform moisture levels in a storage facility can also be a function of the number and

size of storages available. Segregating differTable 7-5.—Relative Amounts of Breakage for Grains

Tested Under Four Handling Conditions

Percentage of grain breakage caused by:

Free-fall Spouting Grain Bucket

Grain drop drop thrower elevator

Corn ., . . . . . 6.3 3.2 1.6 1.1

Soybean . . . . 2.0 1.0 0.7 0.3

Wheat . . . . . . 0.2 0.15 0.2 0.1

SOURCE: J E Maness, “Malntaln Grain Quality Through Good Handllng Prac.

t!ce, ” National Grain and Feed Assoclatlon, Washington, DC, 1976

155

ing moisture levels in horizontal or pile storage is difficult, and several different moisture

levels are often comingled. Large upright bins

predominate in some corn- and soybean-producing areas. Depending on the number and

size of bins available, and on the moisture levels

being stored, differing moisture levels must be

comingled.

Moisture content in any one particular location within a storage facility is subjected to the

moisture/temperature/humidity relationship.

Nonuniform moisture levels can lead to spoilage in localized areas within storage (14,17).

These locations are commonly referred to as

hot spots; if left unattended, they can spread

to the entire grain mass.

Even assuming that moisture and temperature are uniform within a grain mass, they will

not remain so over time, as noted earlier. Moisture will migrate in response to temperature

differentials (figures 7-13 and 7-14). When the

Figure 7-13.—Moisture Migration Patterns

in Falling Temperatures

,1

moisture accumulation

4

.- .’ . .

.-

SOURCE G H Foster and J L Tulte, “Aeration and Stored Grain Manaae.

merit. ” I n Sforage of Cerea/ Gra/ns and The/r Products (St Pau 1, M-N

American Assoctatlon of Cereal Chemists, 1982)
156

,

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Figure 7-14.—Moisture Migration Patterns

in Rising Temperatures

SOURCE G H Foster and J L Tulte, “Aeration and Stored Grain Managemerit, ” In Storage of Ce;ea/ Gra/ns and The/r Products (St. Paul, M-N’

American Assoclatlorl~tCereal Chemists, 1982)

outside air is warmer than the grain, the area

of condensation is several feet under the grain

surface, but still in the center.

This moisture migration during storage

means that grain assumed to be in a storable

condition will not remain so over time. Cold

weather migration primarily affects grain in

land-based storage, causing deterioration as

temperatures rise in the spring. Warm weather

migration is particularly vexing for grain in

transit both from cold to warm areas of the

United States and from the United States

through warm waters to foreign buyers. A barge

or ocean vessel is basically a storage bin and

will experience the same moisture migration

phenomena as land-based storage facilities. Although aeration is the tool for managing moisture migration, grain in transit cannot be aerated, and ventilating the top of barges or ocean

vessels does little to remove moisture or heat.

Maintaining low temperatures and moisture

levels in grain is the principal way to preserve

grain quality and prevent damage from molds

and insects. Aeration is a very effective tool for

controlling moisture content and temperature.

The rate of development for both molds and

insects is greatly reduced as the temperature

is lowered.

Aeration systems generally provide an airflow rate of 0.02 to 0.10 cubic feet per minute

per bushel of grain. This is equivalent to 2 to

12 changes of air per hour. Aeration fans can

be located at the base of a bin to create either

a positive pressure pushing air up through the

grain or a negative pressure by pulling air down

through the bin. Some installations use fans

mounted in the roof or bin top and some use

fans, top and bottom, that pull and push the air.

Resistance to airflow increases with grain

depth, so more power is required to aerate deep

silo-type bins than shallow horizontal storage.

Aerated bins and warehouses must have adequate ventilator area in the top to allow air to

enter or exit when the fans are running.

The equipment and methods used to fill a storage bin affect the aeration system’s performance. Dropping grain into the bin’s center

causes a cone to develop—with the lighter, less

dense material concentrating in the center

(spoutlines) while the heavier, denser material

flows to the sides. This impedes airflow during aeration and molds can begin to grow

almost immediately. In grains with relatively

high amounts of fine material, such as corn,

spoutlines are often removed from upright storage bins by drawing some of the grain out from

the bottom, a practice called coring.

In large horizontal storages, loading from the

center or from a loader that is gradually moved

backward through the center of the building

as the pile is formed causes similar problems.

If grain is piled over each aeration duct on the

floor by moving the loading device back and

forth, airflow will be greatly increased. Airflow
157

distribution is not as uniform as in upright bins,

however. Some methods of filling piles also result in fine material concentrating in local

areas. Piles, however, are difficult to aerate and

their shape alone restricts uniform airflow.

Condensation in aeration ducts can be a problem when the fans are not running during warm

weather and when the grain mass is cold. If

outside air can enter the duct, moisture will condense there. Likewise, moisture from warm

grain can condense on a cold aeration duct exposed to outside air, The accumulated moisture allows mold to grow, sometimes caking

the grain around the perforated ducts, Air

valves or tight-fitting covers should therefore

be used to prevent air infiltration when the fans

are not running.

Although aeration is primarily used for temperature control, grain moisture can be

changed depending on the humidity, airflow

rate, and length of aeration time, If wheat with

13 percent moisture is aerated with air at 40

percent relative humidity, there will be a gradual moisture loss from the grain. Humidities

above 70 percent tend to add moisture to the

grain. For this reason, coupled with the cost

of operation, aeration systems are often run at

the minimums considered necessary.

Many bins, especially on the farm, are

equipped with aeration systems but are often

not used effectively (27). Farm storage bins,

especially smaller and older ones, often are not

aerated. Small bins (holding less than 3,000

bushels) will cool or warm quickly enough with

the changing season that moisture condensation may not be a serious problem. Farm bins

that are aerated, on the other hand, are more

likely to have systems improperly sized for the

bin.

A majority of farm aeration systems are either not operated at all or not operated sufficiently (61). The most common problem is not

running the fans long enough to bring the entire grain mass to a uniform temperature. If a

cooling front is moved through only part of the

grain, a moisture condensation problem is likely

at the point where the warm and cold grain

meet,

Temperature Monitoring

One way to monitor temperature is through

the use of temperature cables. These can be

hung from the roof or bin top and extend down

through the grain mass. Each cable has a steel

support cable and a number of thermocouple

wires in a protective plastic shield. Cables can

be placed in the bin before it is filled or can

be probed into the grain, as is the case for horizontal storages and piles. As grain that is heating more than 1 or 2 feet from a thermocouple

may not be detected until considerable damage is done in the hot spot, spacing and the extent to which detection is desired are critical.

Temperature increases that cannot be explained by changes in ambient conditions are

a signal of possible mold or insect problems

and should be investigated. Commercial facilities have relied on temperature monitoring systems for years, and many farmers also monitor grain temperatures.

Most temperature monitoring at commercial

facilities is done on a fixed schedule either manually or by automatic recording equipment. A

few facilities have installed programmable

equipment that can be used in conjunction with

aeration fan controllers. The system can be programmed to respond to higher temperatures by

switching on an aeration fan. The cost of such

systems has thus far limited their use to a few

large companies,

Transfer Turning

Transfer turning is the process of physically

moving grain from one storage bin to another,

It is used primarily in upright storage facilities

that have bins linked together by conveying

equipment. The turning process mixes grain

and contributes to a more uniform moisture and

temperature. When hot spots are detected, the

affected bin may be unloaded and transferred

to another bin to break up the hot spots and

allow the facility manager to identify and treat
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the cause. In facilities not equipped with aeration, turning has been the traditional means of

grain cooling, It requires much more energy

than aeration does, however, and can contribute to physical damage by breaking the kernel.

Turning grain cannot be performed in horizontal or pile storages because of the difficulty

in unloading and moving the grain. To turn

grain efficiently, a facility should have empty

bins at its disposal that are connected by a conveying system. This is not the case on most

farms. When bin space is limited, a bin can be

unloaded and reloaded in one continuous

operation.

lNSECT MANAGEMENT

Emerging Technologies

Little new technology is available in grain

storage, but some technologies have been recently improved or applied. Programmable controllers for aeration systems are now available

that monitor ambient temperature and humidity as well as grain temperature and that can

be set up to run aeration fans. These will reduce management errors such as not moving a

cooling front completely through the grain or aerating when weather conditions are unsuitable.

As indicated in the preceding section, insects

create numerous economic and quality problems in stored grain. Losses due to insects

worldwide range from 3 to 40 percent of the

grain produced (44).

Preventing insect infestations should begin

on the farm with an effort to clean grain and

remove foreign material, (Cleaning technologies are discussed more fully later in this chapter.) A protective treatment, such as malathion,

should be used if grain will be stored on farm.

Beyond routine cleaning and spraying of empty

storage facilities, few preventive treatments are

applied to freshly harvested grain (7,61). These

treatments are performed mostly on wheat, but

sometimes on corn or soybeans. Also, protective treatments are used most frequently in the

southernmost grain-producing States, where

the climate is most favorable for insect activity.

As grain is marketed and moves from the

farm through various facilities for export or domestic use, it is impractical to maintain the

identity of a particular lot that has been treated,

Thus, a treated lot may receive additional insecticides or fumigants as it moves through the

marketing chain, This can result in adulteration of either the grain or the finished product

with excessive pesticide residues.

INTERVENTIONS

In the absence of preventive treatment, infestations are controlled on a case-by-case basis as they occur. If grain is turned, a protective treatment may be applied. Exposed adult

insects may be killed, but the immature ones

inside the kernels will not be killed until they

emerge as adults. Even when grain is fumigated, a 100-percent” kill may not be achieved.

The population may be reduced to an undetectable level and several generations may pass before infestation is detected. In either case, numerous immature and even pre-emerging adult

insects remain inside the grain kernels. Many

are not removed by the preconditioning processes used in the milling process, and insect

fragments can be found in finished products.

With present technology, pesticides are the

only available and entirely satisfactory method

of ridding grain of live insects. The use of other

control measures is severely limited by the inability to penetrate grain depths, available time

for application and kill, quantity to be treated,

and the product cost (including labor).

Pest control in grain storage facilities and

transportation vehicles is therefore economically driven, If it costs money it will in all likelihood not be undertaken unless not doing so would

prohibit grain sales, Of course, this is true not
159

only for the use of pesticides, but also for aeration, turning, cleaning, or other measures to

control damage and/or prevent quality losses.

Although this approach is an option in a free

market, it can result in situations where buildup reaches such proportions that preventive

approaches such as aeration, turning, and the

application of residual pesticides no longer

work, Emergency or corrective actions, such

as the use of a fumigant, are then needed.

Current Pesticides

The pesticides used to control live insects can

be divided into two broad categories: insecticides and fumigants. Insecticides are applied

to facilities or directly to grain. The term “grain

protestant” refers to the application of an insecticide to grain as it is conveyed into storage. The application is expected to provide a

residue that will protect the grain from insects

during storage. When properly applied, grain

protestants should prevent or minimize additional damage caused by existing infestation

and protect clean, uninfested grain from becoming infested. Insecticides labeled as grain

protestants can also be applied to empty storage facilities, although these must be cleaned

beforehand if the full value of the treatment is

to be realized.

The term “fumigation” is often used incorrectly today. Many people believe that any application of fine insecticide particles into an

enclosure or building as an aerosol, fog, mist,

or smoke is to fumigate. But fumigation is a separate technology from other chemical control

methods:

. . . a fumigant is a chemical which, at a required temperature and pressure, can exist in

the gaseous state in sufficient concentrations

to be lethal to a given pest organism (9).

As this definition implies, fumigants act as

a gas in the strictest sense of the word; they

can penetrate into the material being treated

and can then be removed by aeration. Fumigation, therefore, is a highly specialized art involving the application of some of the most

toxic and unique pesticides. It requires professional personnel who are well trained and experienced regarding both the fumigant and the

target organism.

Insect infestations usually involve a complex

of insect species, and each species and life stage

differs in its susceptibility to an insecticide or

fumigant (22,26), The dosage must therefore be

directed against the least susceptible life stage.

Grain Protectants

For many years, synergized pyrethrins were

the only insecticides approved for use as a grain

protestant, although none are approved for use

on soybeans, Consequently, they have a long

history of safe usage. Pyrethrins are both toxic

and repellant to many species and have a rapid

“knock down” effect. This does not mean the

insects are dead; in fact, they may recover with

no detrimental effect (42). Even though pyrethrins have been used for many years, insects

have developed little resistance to them.

Several factors have limited the use of pyrethrins during the past 15 to 20 years. Pyrethrin

extracts must be imported and, as such, the supply is not as reliable as desired. With the

approval of malathion as a grain protestant,

pyrethrins were no longer economically competitive. Also pyrethrins lacked the biological

efficacy desired as a grain protestant (less than

100 percent kill of some species and life stages)

that appeared more promising with malathion.

Malathion has been the insecticide of choice

for more than 20 years, although it too has never

been approved for use on soybeans, Convincing evidence of insect resistance to malathion

was first reported in the mid-1960s, and during the last 15 years alarmingly high levels of

resistance have been reported. Because there

is no practical and economical alternative,

malathion continues to be used even though

its value as a grain protestant is doubtful in

many cases (23).

Pirimiphos-methyl has been recently introduced. The commercial name for this product
160

is Actellic. It controls a wide range of insect

species, including those resistant to malathion.

Pirimiphos-methyl was approved for use on export corn and wheat (but not on soybeans) in

1986. In 1987, it was approved for domestic

corn use. It is approved for use on stored grain

in 14 other countries (36).

Chlorpyrifos-methyl has also recently been

introduced. The commercial name for this insecticide is Reldan 4E. It controls a wide range

of insect species including those resistant to

malathion. In 1986, it was approved for use on

wheat but not on corn or soybeans. A dust formulation has been approved for use as a protectant for wheat and corn but not soybeans.

Bacillus thuringiensis (BT), a bacterium, is

the only insect pathogen used as a grain protectant. To be effective, the spores must be ingested by the insect; however, only moth species of grain pests are controlled by BT. BT

provides little or no control of grain beetles or

weevils.

Inert dusts, such as silica aerosols, magnesium oxide, aluminum oxide, diatomaceous

earth, and clays, have varying degrees of potential as grain protestants. In general they are

slow-acting and kill insects mainly by an abrasive action that results in desiccation of the insect. They do not perform well in moist grain

or in high temperatures. The disadvantages to

using inert dusts may outweigh their value.

These include environmental contamination,

damage to machinery, increased fire risk, lung

damage to workers, and reduced grade and/or

test weight of grain. As such, relatively little

use has been made of inert dusts in the United

States (26).

Fumigants

A structure must be gastight for fumigation

to be successful. The fumigant gas concentration must be maintained long enough to kill the

least susceptible life stage of the insects involved. Most fumigation failures can be traced

to inadequate gastightness of a storage facility; higher dosages will not compensate for such

deficiencies (66).

An

1.

2.

3.

4.

5.

6.

7.

8.

90

10.

ideal fumigant should be:

highly toxic to all life stages of the target

insect;

relatively nontoxic to humans and

animals;

highly volatile, with good penetrating

ability;

noncorrosive to metals;

nonflammable or explosive under practical conditions of usage;

nonreactive with the commodity (does not

produce an adverse flavor, aroma, or

residue);

nonharmful to seed germination;

economical, readily available, and simple

to use;

fast acting, able to be aerated quickly, and

nonharmful to the environment; and

easily detectable, with adequate warning

properties.

Unfortunately, there is no ideal fumigant.

However, the grain fumigants available possess

some of these characteristics. Therefore, it is

very important that fumigators be well informed on the performance characteristics of

each fumigant so that a fumigation can be performed in a safe and effective manner. Two

compounds—methyl bromide and hydrogen

phosphide—are presently available as grain fumigants. Of these hydrogen phosphide is the

fumigant of choice.

Methyl bromide is highly toxic to all life

stages of grain insects and humans. Because

it is essentially odorless, extreme care is necessary to avoid exposure. As methyl bromide

is a liquid under pressure, it is highly volatile,

but to achieve good grain penetration, forced

recirculation is required. Methyl bromide gas

is noncorrosive to metal, but the liquid phase

reacts with aluminum in the absence of oxygen to forma compound that ignites spontaneously in the presence of oxygen. It is, however,

neither flammable nor explosive under practical conditions of fumigation.

This fumigant reacts with most food commodities and grains to produce inorganic bromide residues that are permanent and accumu-
161

late with each additional fumigation. It also

reacts with a host of other nonfood items, especially those that contain sulfur compounds. The

degree of reaction is relative to the dosage applied, product temperature, duration of the fumigation period, and the number of times it is

applied. When the inorganic bromide tolerance

is exceeded, adverse flavor or aroma (or both)

of the product may occur.

Methyl bromide is economically competitive

with other fumigants and is readily available

to authorized personnel. Using it requires special equipment both for application and safety,

Because it is a liquid under pressure, knowledge and experience in using the equipment

is essential. The need for recirculation substantially limits its use. Recirculation equipment is

expensive and can only practically be used in

facilities that are sufficiently gastight to prevent gas losses caused by the positive pressure

of the system.

Fumigations can be completed within 16 to

24 hours, as methyl bromide is considered to

be as fast acting as most fumigants. The recirculation system used during application can

be used as an aid in aeration. Most of the unreacted methyl bromide can be aerated in 3 to

4 hours; however, atmospheric aeration should

continue for 48 hours or more before moving

the grain. As methyl bromide is practically

odorless at low levels that are dangerous to humans, it lacks adequate warning properties.

Hydrogen phosphide will probably continue

to be the fumigant of choice within the foreseeable future. It falls short of the ideal, but has

many usable qualities not available in any other

fumigant. It is highly toxic to all life stages and

is very toxic to humans. Hydrogen phosphide

is highly volatile with excellent penetrating

quality. It is formulated as a solid either as aluminum or magnesium phosphide. Gas is released

when the formulation is exposed to the atmospheric moisture. However, it is corrosive to certain metals such as copper, gold, and silver.

This fumigant can be highly flammable o r

even explosive under conditions of misuse,

such as application resulting in extremely high

concentrations of gas. It does not react with

grain to cause either adverse flavor or aroma

nor does it cause excessive residues. Hydrogen phosphide is economical, readily available,

and the simplest fumigant to apply. A formulation can simply be scattered randomly, placed

systematically on the grain surface, or submerged into the grain. Many methods have

been developed to increase gas distribution in

the grain mass. Hydrogen phosphide is not a

fast-acting fumigant compared with methyl bromide, and it can take 3 to 5 days or longer depending on the temperature. Even longer periods are required when large masses are to b e

fumigated.

With cross-ventilation, hydrogen phosphide

is removed from the free space in storage facilities within minutes. Low gas levels may continue to evolve from the grain, but with continued cross-ventilation, people can enter the

facility and even work with the grain. Hydrogen phosphide is easily detected by use of detector tubes and contains an odor so it can b e

detected at very low levels, Although the odor

can be a useful warning sign, it may not persist throughout the fumigation to therefore provide adequate warning during aeration.

Among the chemicals used as insecticides,

fumigants are the finest tools available. Fumigation, however, is the last line of defense when

all other insect control methods fail. Special

care needs to be exercised to avoid any exceeding tolerances that may lead to cancellation by

regulatory authorities or the loss of effectiveness due to development of insect resistance.

Although the technology is available to accomplish 100 percent kills of the target insect, the

diversity of storage facilities and conditions under which fumigation is performed means a 100

percent kill is seldom achieved.

Most fumigations are of a commercial or economic control type. This is accepted because

most storage facilities are not sufficiently

gastight to retain the fumigant, and the cost of

securing gastightness maybe prohibitive. This

type of fumigation is often accepted where very

large grain masses are involved or when time
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is limited, such as in large elevators and export

grain in shipholds. Although some of these facilities may be sufficiently gastight, the technology for achieving gas distribution throughout the grain mass has not been adequately

researched and developed.

If there are enough insects to require fumigation, there are greater numbers of immature

insects living inside individual grain kernels.

Commercial or economic control fumigations

often do not kill these immature insects. Though

the grain may pass visual inspection for live

adult insects, many of the immature insects develop and emerge as adults within the next 2

to 4 weeks and the grain is reinfested.

Two important problems arise from this type

of fumigation. First, shipments certified as not

being infested may arrive at their destination

infested. Second, insects not killed by fumigation are exposed to sublethal dosages, which

is the basis for developing resistance. Insect resistance to any of the fumigants means a major loss in this last line of defense.

Conditions Affecting Insect

Management

The application and effectiveness of residual insecticides and fumigants may be seriously

limited by the amount of time available, the

space or volume of grain to be treated, the economics or dollar value saved or gained by their

use, or legal restrictions on the use of various

pesticides by local, State, or Federal authorities.

The effectiveness of residual insecticides depends on the grain and storage facility being

properly treated: The insect must come in contact with the residual before the pest will be

killed. Similarly with fumigants, if there is not

sufficient time for the gas to reach all parts of

the grain mass in the required quantity and for

the required duration, the pest will survive.

Types of Storage

The types and quality of grain storage facilities vary greatly, as noted earlier in this chapter. Farm storages have generally been suitable

for fumigating with liquid fumigants (e.g., carbon tetrachloride, ethylene dibromide, ethylene

dichloride, carbon disulfide, and chloropricrin)

that were poured, sprinkled, or injected into

the grain. These liquid fumigants are no longer

available, and it is questionable whether some

of these facilities can be sealed adequately and

economically to retain fumigant gas such as

hydrogen phosphide. In some cases, farmers

may be advised to increase fumigant dosage to

compensate for gas leakage. This will result in

failures and can lead to insect resistance and

ultimately the loss of the fumigant from the

market.

For several reasons—such as remoteness of

farm storage facilities, small amounts of grain

to be treated, inadequate storage structures, and

lack of information—much on-farm grain may

never receive properly applied insect controls.

When this infested grain is marketed, it comingles with noninfested grain and inflates the

problem (7).

Although many high-quality on-farm storage

facilities boast good pest management practices, the well-constructed facilities that utilize

pest management technologies are generally

found in commercial handling facilities that use

upright silos (or bins) or horizontal (flat) storage. They are usually equipped with some type

of forced aeration for cooling and drying. These

systems are not designed for recirculation,

which is required for fumigation with methyl

bromide. Most horizontal or flat facilities are

not adequately gastight for fumigation with either of the available compounds. Hydrogen

phosphide can, however, be used when facilities are adequately gastight.

Most upright storage structures are gastight

or can be made adequately gastight with a minimum of sealing. The ideal time to fumigate

with hydrogen phosphide or apply an insecticidal protestant is when the grain is conveyed

into storage. However, it is impractical to apply a fumigant at this time because the flow or

supply of grain is irregular, and much of the
163

harvest must be completed before the storage

is filled. Thus, a great deal of the fumigant gas

is lost as grain is added, The next best treatment opportunity is when turning grain from

one full tank or silo to an empty one. This is

not always done because empty storage space

may not be available and it is expensive to turn

grain. Sometimes grain is fumigated by probing or submerging fumigants into the grain surface. Most of these fumigations are only partially effective because sufficient time is not

allocated to effect gas distribution.

Port Facilities

All port facilities have upright storage structures, although these are best described as handling, not storage, facilities. Any type of insect

control remedy can cause expensive delays in

loading. Because of the different types a n d

grades of grain handled, even the largest port

facility can seldom store enough grain for one

shipment. Instead, enough grain is held to begin loading a ship, then a constant flow of grain

from railcars and barges is unloaded into the

facility and transferred directly onto the ship.

Incoming grain that is infested can be set aside

and fumigated before unloading, but grain

found to be infested after loading on the ship

is usually fumigated with hydrogen phosphide

while in transit.

Transportation Modes

The time grain normally spends in various

transportation modes—combines, trucks, railcars, and barges —is minimal. Yet these can be

important sources of infestation. prolonged

storage, especially in ocean vessels, is a unique

situation that should be treated as storage rather

than transportation.

To be effective, a fumigant gas must be distributed throughout the grain mass and held

for the duration required to kill the insects involved. Few transportation modes are adequately constructed to retain fumigant gases.

Those that may be sealed or made gastight include covered hopper railcars and hopper-type

trucks, Other types of railcars, trucks, and even

barges cannot be made gastight either at all or

economically, Ocean vessels, on the other hand,

have proved to be effective locales for fumigating grain in transit,

Outside Factors

Physical.—Many physical factors affect the

performance of chemical interventions. Among

these are temperature, moisture, and humidity. Temperature probably has the greatest

impact. Usually within well-defined limits, an

increase or decrease in temperature means a

similar increase or decrease in the insecticide’s

performance, Temperature most dramatically

affects the performance of fumigants, especially

methyl bromide, High-moisture grain increases

absorption of fumigants such as methyl bromide, requires higher dosages, and accelerates

the breakdown of protective treatments such

as malathion, The influence of humidity is varied, with minimal effect on the performance

of most pesticides. However, hydrogen phosphide formulations require at least 25 percent

relative humidity to cause the chemical reaction

that releases the gas.

Foreign material and dockage covers a wide

variety of items, but grain dust and other fine

materials have the greatest effect on the performance of insect control interventions. When

a protective treatment is applied, grain dust

may absorb much of the insecticide, reducing

its effectiveness. Likewise, concentrations o f

dust and fine material may require increased

dosages of a fumigant to penetrate the grain

mass. Dust also inhibits penetration of fumigant gases and causes the gas to channel so that

penetration is slow or nonexistent in certain

parts of the grain mass.

Human.—The competence of applicators is

a major factor in the performance of any pest

management intervention. An incompetent or

inadequately trained applicator may apply too

little or too much pesticide. The grain is either

not protected or it may be contaminated with

residues from high dosages, Inadequate train-
164

ing and experience are most likely on the farm,

where pesticides are often applied by farmers

themselves.

Biological. —Several biological factors must

be taken into account for successful insect control. Some of the most important factors include

the species and life stage of the insects involved,

insect resistance to the insecticide, kind and

condition of the grain to be treated, and the

presence of beneficial organisms such as parasites and predators.

Infestation usually involves several insect

species, and susceptibility to insecticides varies

among species, life stages, and even the age of

the insects within a species. Therefore, the insecticide or fumigant must be directed toward

the least susceptible species and life stage. Several insect species are highly resistant to malathion and/or moderately resistant to synergized

pyrethrins (69), and a few species have developed low levels of resistance to hydrogen phosphide (13).

Financial.—The cost involved should not be

a deterrent to the timely and proper application of insect control. Studies indicate that materials cost less than 1 cent per bushel and that

complete programs involving treating empty

bins or warehouses average 2 cents per bushel

(67). Other studies indicate that farmers do little to maintain quality during storage on the

farm even though grain is discounted for live

insects (7).

Discounts assessed for live insects are quite

variable. Discounts in Minnesota are reported

as high as 17 cents per bushel for corn to 33

cents per bushel for wheat (27). A survey of commercial handling facilities across the Midwestern States reported discounts ranged from

1 to 20 cents per bushel (62). Obviously, the incentives to initiate and maintain insect control

measures and deliver insect-free grain are either lacking or in question.

New and Emerging Technologies

The greatest potential for new residual-type

pesticides may be in expanding the approved

usage of the relatively new insecticides pirimiphos-methyl and chlorpyrifos-methyl. Both

compounds appear promising as replacements

for malathion. Both are effective against malathion-resistant insects, but are less than totally

effective against the lesser grain borer, a major pest to stored grain. In Australia, mixtures

of bioresemthrin, a synthetic pyrethroid, with

chlorpyrifos-methyl have been shown to be effective. The use of insecticide mixtures has not

received much attention in the United States

because regulation requires safety data on all

components as well as the mixture.

Several new approaches to insect control or

prevention have been researched and brought

to a usable point, but they have received little

or no acceptance within the grain marketing

system because of costs or predetermined performance limitations.

Modified atmosphere is a relatively new technology. Its basic performance needs are similar to those of a fumigant in that the facility

must be gastight to retain a modified atmosphere of either nitrogen, carbon dioxide, or no

oxygen for several days. The use of carbon dioxide appears to have the greatest potential,

Regardless of whether nitrogen or carbon dioxide is applied or an exothermic burner and

condenser is used to create a low oxygen atmosphere, the logistics of providing large quantities of these substances or the initial cost and

maintenance of the burner system will hinder

implementation.

Hermetic storage involves total sealing, after a facility is completely filled, to exclude oxygen. Then, during long-term storage, the natural respiration of the grain and insects will

deplete the oxygen and create an atmosphere

lethal to the insects.

Much research has been completed on using

irradiation to kill or sterilize insects and to disinfect grain. Recent studies indicate that the

electron acceleration method of irradiation is

the most practical and may be the most economical. Adoption of irradiation has been

limited because of the high initial cost of installation. Installing an accelerator capable of

treating 1,000 tons of grain per hour would cost
some $4 million (10). By operating the unit two

shifts per day, 6 days a week, the maximum

annual throughput would be 5 million tons.

With this throughput and taking into account

all foreseeable operating costs, treatment would

cost about 23 cents per ton.

At a temperature of 16 °C or lower, insect

activity ceases. Little or no feeding or reproduction occurs, but many insects will survive

long periods at these temperatures, At temperatures near freezing, it requires 10 days or more

to actually kill some species. Obviously the technology is available to modify temperatures to

maintain quality of certain high-value agricultural products, However, it would be economically impractical to freeze large grain masses

by mechanical refrigeration. Where climate

provides naturally cold temperatures, aeration

systems in storage facilities are used to reduce

grain temperature to achieve insect control.

High temperatures can also kill insects. Studies using high temperatures concluded that microwave and infrared radiation can heat grain

in thin layers, such as found on conveyor belts,

to disinfest it (39).

TRANSPORTATIO N

The U.S. grain transportation and distribution system is probably the most efficient one

in the world (8), Much of this efficiency was

achieved during the 1970s when demand for

export grain placed enormous stress on the system. Improvements made then resulted in highspeed, low-cost transportation and grain distribution. It is estimated that the United States

is now capable of exporting over 8 billion

bushels of grain per year, whereas in the mid

to late 1970s the system was under great stress

to export 3.5 billion to 5,0 billion bushels.

Current Modes of Transport

Grain may be moved from farms to country

elevators or to inland terminal elevators, or

directly to domestic end users (figure 7-15). Domestic users may obtain grain directly from

farms or from country, subterminal, or terminal elevators by truck or train. Grain for export

can be shipped from these elevators directly

by rail, by truck to barge, or by rail to barge

to export elevators in major U.S. ports for loading onto ocean-going vessels. Some farmers

close to export elevators bring grain directly

to these facilities by truck. Grain is also shipped

by rail from subterminal or inland terminal elevators to Mexico, and small amounts of wheat

and corn move directly into Canada by truck.

Thus, the major carriers of grain are trucks,

trains, barges, and ocean vessels.

Accurate measurement of the share of grain

hauled by each mode of transportation is difficult since no agency collects data on grain shipments by truck. Also, more than one transportation mode may be used to move grain from

a country elevator to the final user. Information on the total quantities of grain moved by

rail and barge is available (table 7-6). The share

of transportation by train ranged from a high

of 80 percent in 1974 to a low of 66 percent

in 1982. Barge shares tend to rise and fall as

exports increase or decrease, primarily because

most grain moving by barge is destined for export. The share of grain moving to export by

rail declined from 62 percent in 1974-75 to 38

percent in 1983-84, while the share by barge

increased from 37 to 60 percent (3).

By Rail

Trains have been the major carrier since the

late 1830s, and single boxcar shipments remained the dominant grain transportation technology until the late 1960s. The use of boxcars,

however, resulted in grain damage. The grain

was loaded through a center door using flexible pipes that direct the grain flow into either

end of the boxcar. Grain throwers were also

used to assist in this process. Once loaded, the

grain was leveled by hand. Since boxcars had

no unloading devices, unloading involved an

electric shovel that was dragged or pulled by
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Figure 7-15.-General Flow of Grain From the Farm Through the System

River Port

elevator elevator

Overseas

processor

SOURCE: U S Department of Agriculture, Office of Transporlatlon, “The Physical Dlstnbutlon System for Gram,” Agriculture Information Bulletin No 457, Washington, DC,

October 1983 -

Table 7-6.—Grain Hauled by Railroads and Barges,

1974-1985

Billions of bushels

moved by Percent moved by

Year Rail Barge Rail Barge

1974 . . . . . . . . . . . . 4.21 1.03

1975 . . . . . . . . . . . . 4.06 1.20

1976 . . . . . . . . . . . . 4.10 1.61

1977 . . . . . . . . . . . . 3.91 1.52

1978 . . . . . . . . . . . . 4.12 1.63

1979 . . . . . . . . . . . . 4.41 1.62

1980 . . . . . . . . . . . . 5.00 1.91

1981 . . . . . . . . . . . . 4.38 1.99

1982 . . . . . . . . . . . . 4.22 2.18

1983 . . . . . . . . . . . . 4.72 2.11

1984 . . . . . . . . . . . . 4.81 1.97

1985 . . . . . . . . . . . . 3.99 1.67

80.3 19.7

77.3 22.7

71.8 28.2

72.0 28.0

71.7 28.3

73.1 26.9

72.4 27.6

68.8 31.2

66.0 34.0

69.1 30.9

70.9 29.1

70.5 29.5

SOURCE Association of American Railroads, The Gra/n Book 1986(Washington,

DC 1987)

a cable to the center door, using an electric motor. Unloading devices were designed to lift and

tip the entire car in either direction so the grain

would flow out the center doors. The whole process of transporting by boxcar was laborintensive and damaging to the grain.

Boxcars were also a ready source of insect

infestation since they have an inside wood wall

liner. Frequently these were damaged, and bulk

material, including grain from previous shipments, became lodged behind the liners. This

material was for all practical purposes impossible to remove and, therefore, became infested

and contaminated the next cargo.

The advent of the covered hopper car in the

mid-1960s greatly reduced the loading and un-
167

loading stress on grain quality. Covered hopper cars have full-length top hatchways for relatively easy loading that does not require

throwing or leveling. Each car consists of three

to four smooth, hopper bottom compartments.

Since grain is unloaded by gravity flow, each

compartment is essentially self-cleaning, reducing the risk of insect infestation in the next shipment. The covered hopper car is tight and essentially leak-proof, making it easier to fumigate

than boxcars. Moreover, loading and unloading is less labor-intensive and damaging to

grain. By 1985, 99.6 percent of all grain transported by rail moved in covered hopper cars.

Until the mid-1960s, almost all grain transported by rail moved under single-car transit

rates, This means that grain was shipped to a

transit location (an elevator), unloaded for storage, and later reloaded and shipped to its final

destination, The transit rate was usually lower

than the inbound rate to a location plus the outbound rate to the final destination. In the mid1960s, however, rail companies began offering

low-cost, multiple-car and unit-train rates from

country elevators direct to final destination,

thus eliminating the stopover at transit

locations.

Unit trains are a group of railcars shipped

from one origin to one destination on one bill

of lading and consist of 50 or more railcars.

The unit-train concept eliminated the need to

stop at numerous elevators to pick up cars for

switching into a train. Turnaround time from

the country elevator was much faster for unit

trains than for single-car shipments. Thus, unit

trains lowered costs of switching, fuel, and

crews, and enabled companies to haul more

grain with existing fleets. A portion of these

savings were passed onto shippers in the form

of lower rates, which enabled rail companies

to be more competitive,

By the mid-1970s, multiple-car and unit-train

shipments became the standard method for

transporting corn and soybeans by rail. This

shift to large direct rail shipments reduced not

only grain transportation costs but also grain

damage by eliminating unloading and reloading at transit elevators.

While the single-car transit system has been

virtually nonexistent in the corn and soybean

market since the mid-1970s, it continues to perform a major function in wheat distribution,

particularly in areas producing Hard Red Winter wheat. More than half the wheat transported

by rail from Kansas, Oklahoma, and Texas

moves under transit rates. In part, this is because a large percentage of the grain storage

capacity in these areas is located at inland terminals. In contrast, most storage capacity in

the Corn Belt and the wheat-producing areas

in the Northern Plains States is located at country elevators, and multiple-car and unit-train

shipments are now standard. In addition, aggregating large quantities of wheat at inland

terminals permits blending of Hard Red Winter wheat to meet export standards. Only a small

number of country elevators in these areas are

capable of blending wheat to meet export specifications.

By Barge

Most grain moving by barge originates on the

Mississippi River system, which includes the

Illinois and Ohio rivers. These rivers became

navigable when a system of locks and dams

made the entire river system navigable at 9-foot

drafts in the 1930s. The major export locations

served by barges are the Mississippi River elevators in New Orleans and the Pacific Northwest ports that are served by the Columbia and

Snake rivers.

All grain moving by barge must be transported by truck or rail to barge-loading facilities, unloaded, and then reloaded into the

barge. Barge tows, consisting of 12 to 30 barges

pushed by a towboat, make the trip from barge

loading facilities on the upper Mississippi to

export elevators in New Orleans in 15 to 25

days.

Barges are not self-unloading, so unloading

causes more grain damage than unloading hopper-type railcars. Typically barges are unloaded

by lowering into the barge a marine leg or vertical belt with large buckets attached to scoop

up the grain, When a barge is partially unloaded, a small crawler tractor with a front-end

blade is lowered into the barge to push the re-
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maining grain to the marine leg to complete

unloading.

The major advantages of barges over railcars

are the large carrying capacity of barge tows

and the relatively low rates charged to transport grain to deep water ports in New Orleans.

Table 7-7 shows the range of rail and rail-tobarge rates for grain shipped from central Iowa

to New Orleans. Rail rates decline as the size

of the shipment increases in both situations,

but are still higher than for barge shipments.

Barge rates respond to supply and demand.

During the 1970s, barge rates fluctuated between 100 and 200 percent of the Merchants

Exchange of St. Louis trading benchmarks.

Even with barge rates at 200 percent of tariff,

however, the combined rail-to-barge rates are

sharply lower than rates on rail direct to New

Orleans. The rail rate advantage only increases

with origins located closer to New Orleans.

Other advantages of barge movements are

that they can be used as an extension to the export elevator for storage and that barges can

be marshaled and unloaded in the New Orleans

area. Many export elevators in New Orleans

are high-speed transfer facilities with limited

storage that are equipped to unload barges rapidly, usually one per hour. These elevators

would be hard-pressed to unload the equivalent amount of grain from railcars in an hour

and still maintain low-cost, high put through

rates. Barges with specific qualities and quantities being stored on the river are controlled

by the grain companies in the New Orleans

Table 7-7.—Comparison of Rail and Rail. Barge Rates

From Jefferson, Iowa, to New Orleans

in Dollars Per Ton

Rail to

Rail Clinton, 1A,

direct barge to

Size of to New New

Mode shipment Orleans Orleans

Rail . . . . . . . . . . . . . . . . . . . . 25-car $25.40 $7.20

50-car 23.60 6.60

75-car 21.40 6.00

Barge at 100°/0 of tariff . . . 5.32

Barge at 200°/0 of tariff . . . 10.64

SOURCE: C.P. Baumel, “Alternative Grain Transportation and Distribution Technologies and Their Impacts on Grain Quality, ” background paper prepared for the Office of Technology Assessment, U S. Congress,

Washington, DC, 1988.

area. These can be collected and moved to the

elevator based on quality demands of a particular shipment at specific times desired. Unloading railcars means extra work in dealing with

individual smaller units and storing specific

quantities in the facility. Also, switching railcars into the facility and removing empty cars

is subject to the availability of train crews. This

places the facility at the mercy of the rail companies regarding delivery schedules when an

entire export shipment is not in the facility.

By Ocean Vessei

In the 1960s, the Public Law 480 program

dominated grain exports. A substantial portion

of these exports were shipped in small (10,000

to 15,000 ton) vessels. Many of these were multipurpose vessels (’tween deckers) with several

decks and small holds. Loading often caused

grain damage. To provide cargo and vessel stability and to obtain full utilization of capacity,

these vessels had to be trimmed, which involved

throwing the grain under ledges and into

corners of small holds, causing more grain damage. These vessels were difficult to unload and

fumigate for the same reasons.

During the 1970s world prosperity increased

cash export sales substantially. Importers and

exporters shifted a high percentage of their

shipments to larger vessels (50,000 tons or more)

to gain lower per-ton shipping costs. These vessels are relatively easy to load and unload because of their large open holds with rolltop

hatches and smooth sides, and thus create less

grain damage than the “tween deckers.”

Grain can also be transported in tankers that

are used primarily to ship oil. Loading tankers

can damage grain, especially corn, because it

must be loaded through a small opening, just

big enough for a person to enter, in the middle

of each hold. In each opening there is a permanently affixed ladder. As grain is loaded, it

bounces off the ladder, causing increased breakage. Also, holds must be filled through very

small openings at the corners to increase the

hold’s capacity. Based on the location of these

openings, grain may have to be thrown and

diverted into the opening. Unloading tankers
169

is more difficult and causes additional grain

damage because pneumatic unloaders are required.

Quality Problems That Arise

During Transport

The grain transportation and distribution system aims to move grain from the farmer to its

final destination at minimum cost, subject to

maintaining a specified level of grain quality.

As figure 7-15 indicated, a large number of

routes are available. Assuming a minimum of

two handlings (one in and one out) at each location, grain might be handled six to eight times

when moving through this system. This figure

does not include the number of times grain is

handled on the farm or within facilities. Thus,

the relationship between the transportation and

distribution systems affects grain quality.

Changes in one system will require changes in

the other.

The grain distribution system, as currently

organized, has large investments in duplicate

and out-of-location facilities, which tends to increase the number of handlings. The abandonment of a large number of branch rail lines during the 1970s left many country elevators

without rail service. Most of these facilities,

however, are still in operation. A substantial

portion of grain received at these locations must

be trucked to another facility that unloads,

stores, and reloads the grain into railcars. At

least two handlings could be avoided if farmers

delivered grain directly to facilities with rail

service. In effect, the facilities on abandoned

rail lines recreate the transit system for corn

and soybeans that caused additional breakage

due to increased handlings. (This is not as important for wheat, which is less affected by extra handling.)

Other than increased breakage during loading and unloading, grain quality deteriorates

in shipment in much the same manner as it deteriorates during storage. The negative impacts

on grain quality presented in the storage section of this chapter regarding moisture uniformity and migration, temperature and humidity,

insect invasion, and mold development also apply during shipment. This is because grain is

in fact being stored while in transit,

Several factors peculiar to grain transportation must be noted, however. The areas discussed in the storage section as they pertain

to solutions or preventive measures are not

applicable to grain during shipment. For example, no mode of transportation is equipped

with aeration, nor can grain temperatures and

corrective actions be taken during shipment.

Therefore, moisture uniformity is critical to

maintaining quality. Moisture migration can

be more dramatic during shipment since grain

can undergo several outside air temperature

and humidity changes. This is especially true

when grain is loaded in a cold climate and

moved through warm water rather quickly to

a warm, humid climate.

Barge shipments appear to be more susceptible than railcars to these influences, since

more time is spent in transit. One explanation

is that railcars are more uniformly loaded than

barges in terms of moisture, as barge-loading

facilities have fewer bins for segregating different moisture levels. Also, barges are primarily

used to transport corn and soybeans, with moisture and damage at higher levels than in wheat.

Once grain is loaded into the mode of transportation that will carry it to its destination,

maintaining grain quality is out of human

control.

Grain travels up to 2,000 to 3,000 miles from

the major grain-producing regions in the United

States to ports. In the case of barge shipments,

up to 3 weeks might be spent in less-thanoptimum storage conditions. Spoilage in barge

shipments to New Orleans have been found due

to high moisture levels in portions of the barges.

This happened in less than 3 weeks. Vessels

used to transport grain to foreign buyers can

take up to 50 days, not including port delays

for unloading. This time increases the potential for grain spoilage and has been the focus

of several studies on grain quality and the basis for many foreign complaints.

As discussed previously, as bulk grain is

loaded, fine materials tend to accumulate in the

center while the larger material tends to roll
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to the sides. The impact that concentrations of

fine materials (spoutlines) have on grain quality can be minimized to some degree by moving the loading spout around so those materials do not concentrate in one spot. This cannot

be done in tankers. But no degree of spout

movement can completely eliminate the segregation of material in the hold of a vessel.

This creates some unusual problems beyond

the effect fine materials have on quality. As vessels have gotten larger (for the reasons previously discussed), foreign buyers are receiving

quantities that must be divided for distribution

to the ultimate users. Many times the entire

cargo is not reblended before being divided and

distributed. This results in some users receiving higher quality (as defined by the average

amount of fine material reported for the entire

shipment) and some receiving poorer quality,

even though the entire cargo was within specification.

Transport Techniques That

Grain Quality

Identity Preservation Within

Ship Holds

One of the problems associated

bulk shipments is the nonuniform

Protect

with large

nature in a

ship hold of the grain that will ultimately be

distributed to several users. One way to overcome this problem is to place a layer of burlap

or plastic cloth and plywood between individual portions. Some countries specify that individual portions destined for specific users be

separated in this manner.

Direct Transfer

One method for reducing the number of grain

handlings is to transfer grain directly from one

mode of transportation to another without unloading it into an elevator. For transfer from

a railcar or truck to a barge, direct transfer

could involve unloading the railcar or truck into

a pit and transferring the grain by belt directly

into a barge, thus eliminating the elevator handling. This method is currently being used in

some locations.

Direct transfer from a barge to an ocean vessel can be accomplished with conventional unloading methods, marine legs, and movement

by belt to the ocean vessel. A second method

involves floating rigs. Currently, nine floating

rigs in the New Orleans area perform this service. The cost, however, of direct transfer using

floating rigs is higher than moving grain

through export elevators,

Bagging

Export bagging facilities are currently in

place at export elevators in Corpus Christi and

Houston, TX, as well as in Pascagoula, MS. The

bagging operation consists of placing grain into

bags, sewing the bag shut, placing it on a pallet, and transferring the full pallet to a warehouse on the dock for loading to a vessel.

Most of the export bagging is currently being performed for Public Law 480 shipments

of 1,000 to 4,000 tons per order. The cost is substantially higher: Bagging, including moving

full pallets to a warehouse and then loading

them, costs about $27.30 per metric ton compared with less than $1.00 for loading bulk grain

(8). Bagging grain at country or inland elevators and shipping the bags to a port for loading

would decrease the number of handlings.

Containers

Since the mid-1970s, most of the manufactured U.S. imports have been shipped in 20-

and 40-foot containers. A large share of these

return empty to Japan, South Korea, and Taiwan. Special high-quality grains such as seeds

and soybeans for human consumption have been

exported in these containers. However, little

or no commercial-grade grains have been

shipped in containers.

The cost of shipping containerized grain is

significantly higher than any of the current bulk

shipping technologies. One recent attempt to

ship corn from Iowa in containers cost twice

as much as the least-cost bulk handling rate.

Grain loaded into containers at interior locations could be shipped overseas, thus reducing a significant number of handlings (8).
171

Identity-Preserved Shipments

The basic concept behind identity preservation is that individual grain shipments should

not be comingled with others. Thus, the grain

shipped from a specific location in the United

States is the exact grain that the final user receives. Any of the previously mentioned modifications can be used for identity-preserved shipments. The associated costs are therefore

related to the type of transportation mode

selected. Much discussion has taken place on

the merits of this concept, and several shipments have originated from interior locations

for delivery to importing countries with their

identities preserved.

Emerging Technologies

Only two new transportation technologies

could help preserve grain quality: capsule pipelines and long-distance belts. The pipeline technology would move grain in capsules propelled

by air pressure, Long-distance belts would carry

the grain gently from one point to another.

Recent studies on the economic feasibility of

capsule pipelines indicate that distance and

quantity carried are the major determinants of

the economic feasibility. The pipelines are

cheaper than unit trains on shipments less than

300 miles and quantities in the range of 70 million to 80 million tons per year (8). The short

distances mean that shipments would be limited to river terminals for loading onto barges

for shipment to a port.

Large volume requirements are unlikely to

be available to any inland shipping elevator unless the grain is trucked or railed to the pipeline loading elevator. This would raise costs and

number of handlings. Once grain is loaded into

a truck or railcar, usually the least cost method

of transportation is to haul it directly to its destination.

The final remaining possibility for pipelines

or belts is to transfer grain very short distances

from large elevators to nearby export elevators

or from export elevators to ocean vessels unable to reach the elevator because of shallow

water, The widespread distribution of grain

supplies in the United States effectively rules

out the use of these technologies for moving

grain from country elevators.

CLEANING AND BLENDING TECHNOLOGIES

Cleaning and blending are operations at the

heart of many grain quality controversies. The

purpose of cleaning is to remove material other

than grain, shriveled kernels, and broken pieces

of kernels. Blending is the mixing of two or

more grain lots to establish a quality different

from either lot. Blending is performed by exporters, individual elevator managers, and producers to assure uniformity and increase profits (33). Concerns over cleaning and blending

initiated the Grain Quality Improvement Act

of 1986. In essence, many people believed that

there was something inherently wrong about

reintroducing material that had been removed

from the grain. The act prohibits: 1) recombining or adding dockage, dust, or foreign material to any grain at export facilities; 2) blending different kinds of grain; and 3) adding

broken kernels from one grain to another.

CIeaning

Cleaning wheat in commercial handling facilities is normally limited to removing dockage, insects, and to a limited degree shrunken

and broken kernels. In corn, cleaning regulates

the amount of broken kernels and foreign material; in soybeans, it controls the amount of

foreign material and split soybeans. The handling and harvest properties of each grain,

along with the location of grain cleaners, dictate the amount of cleaning required to meet

various contract specifications. For example,

corn harvested at low levels of broken corn and

foreign material but high moisture must be

dried and, due to its inherent nature, it breaks

up during each handling.

Thus, cleaning corn to remove broken corn

and foreign material is required at each han-
172

I

I

I

I

I

I

,

i

dling in order to meet contract specifications

and avoid discounts. As most dockage in wheat

is generated during harvest, and as normal handling does not cause significant dockage increases, cleaning is not required each time

wheat is handled. Soybeans, on the other hand,

fall somewhere in between regarding breakage

susceptibility and the amount of cleaning required at each handling.

Data are not available on the number of

cleaners on v. off farms. The number on farms

is probably related to the particular crop, the

amount of on-farm storage, and the number of

operations performed on the crop at the farm

level. For example, most corn is stored and

dried on farm. In wheat, on the other hand, drying is not required and the amount of dockage

can be regulated by the combine. Therefore,

significantly fewer cleaners are probably found

on wheat then on corn farms.

Principles of Cleaning

The most common types of cleaners are mechanical screening and scalping devices. Scalpers remove material larger than grain and allow the grain and fine material to pass through.

Smaller screens are used to retain the grain and

allow small material to pass through. Screens

may be stationary, with grain flowing or being

swept along them, or they may be shaken or

rotated. Cleaning grain using screen and scalping devices makes a particle size separation.

Screen sizes vary by commodity, but usually

coincide with the sieve sizes used in each Official U.S. Standard for Grain to define the respective factors.

Other types of cleaning devices use aspiration. This separates grain from less dense material by drawing air over a falling grain stream

and pulling the lighter material into a cyclonetype separator. In addition to removing fine material, aspiration has also been found to be effective in removing insects from wheat. Cleaners using gravity tables (seed weight separation)

and length graders (seed size separation) are

used by seed conditioning plants. Screens and

aspirators, however, are the only methods with

the throughput capacity needed for modern

bulk handling facilities.

The Official U.S. Grain Standards for corn

and soybeans use particle size to discriminate

between whole and broken kernels and foreign

material. In wheat, particle size separations and

aspiration are used to separate all matter other

than wheat. This process does not distinguish

between whole or broken kernels. The scalping process removes material considered to be

foreign to grain (i.e., stems, chaff, cobs, etc.)

and also does not distinguish between whole

or broken grains. Screening removes smaller

foreign matter, dirt, weed seeds, etc., but depending on screen size can also separate whole,

broken, or split grains.

When establishing screen sizes, the relationship between removing unwanted foreign material and removing broken, split, or shriveled

grains is important. Whenever grain is cleaned

by screening to remove foreign material, screen

size has an impact on the amount of broken

or shriveled grains that will ultimately pass

through, but no matter what screen size is established, screens cannot remove everything. For

corn, the common screen size is a 12/64-inch

round-hole sieve. This size has recently caused

much discussion since it removes a large percentage of broken kernels. It is generally agreed

that scalpers remove unwanted foreign material, but much debate has centered on the value

of the broken grain removed at the same time.

Since cleaning is intended to remove material

that is lower in value than the remaining grain,

setting screen size, especially in corn, is a balance between separating material that may have

value from material that is of no value and that

may cause quality deterioration.

A more recent discussion on setting screen

size centers on the particle sizes that form

spoutlines. Recent studies have shown that

crevices between kernels act like a screen. Fine

particles small enough to fall into these crevices

form spoutlines. One study found larger particles in corn spoutlines than in soybean spoutlines, and that spoutlines essentially do not exist in wheat. It concluded that the best screen
173

sizes for corn and soybeans would be ones that

will remove all particles of a size to form

spoutlines.

Aspiration, which is predominantly used to

clean wheat and in some areas has been used

to remove insect infestations, has been effective in removing the lighter, less dense material normally considered to be of no value. The

problems associated with the percent and value

of broken and shriveled kernels removed, therefore, would appear to be less. However, density decreases with particle size (31,68), and

aspiration cleaning will produce cleanings of

lower density than screen cleaning for the same

percentage of material removed. One study

found that low-density whole corn kernels are

not of inferior feed value (28), but more recent

studies show that they are a detriment to milling operations (53).

Another study measured the nutritive value

of various corn particle sizes (30) (table 7-8). No

particle size discriminated by nutrient content,

nor was nutrient content. dramatically reduced

with decreasing particle size. On the other

hand, the majority of the dust and inert material was concentrated in the sizes 8/64 inch and

below, while weed seeds were mostly between

the 10/64 and 6/64 size.

The relationship between screen size and the

value of the material removed is further complicated by the fact that smaller particle sizes

contain less available starch to support mold

growth (30), However, studies have also shown

that concentrations of broken and fine material are conducive to insect growth and reduce

airflow during aeration. Broken corn between

the 16/64 and 8/64 sieves has been found to be

more biologically active than the sieve sizes currently being considered for inclusion in the Official Standards for Corn (8/64 and 6/64) (30). The

debate continues, therefore, on what should be

removed and how much, and the material’s relationship to setting grade limits and its effect

on storability.

Current Procedures

Cleaners in commercial facilities are normally placed after the final elevation, Cleaning, therefore, is performed during loadout unless the grain is being cleaned to enhance dryer

performance or is going into storage. On-farm

cleaning, when done, is primarily to improve

dryer performance.

Introducing clean grain to the dryer has the

following advantages: 1) it results in more uniform airflow in the dryer and thus a more uniform moisture content of the dried grain, 2) it

decreases the static pressure (airflow resistance)

of the grain, thus increasing the airflow rate

and dryer capacity, 3) it eliminates the drying

of material that deleteriously affects final grain

quality, and 4) it results in less air pollution (55),

Obviously, cleaning before drying also has

some disadvantages. It requires additional investments in cleaners, the handling of wet broken corn and fine material, and the rapid sale

of wet, easily molding material: it also results

in some dry matter loss. Although the advantages of precleaning wet grain are fairly well

understood by dryer operators, most do not do

it. The quality of U.S. grain would improve substantially if precleaning was adopted (21).

Commercial cleaning requires high flow

rates. Gravity or vibrator screen cleaners with

Table 7-8.— Nutritive Value of Corn Fines, by Particle Size

Size range, 64th-inch

Property Whole corn 15-12 12-10 10-8 8-6 6-4.5 <4.5

Protein, percent dry basis . . . . . . 10.20 10.06 10.35 10.38 10.44 -

10.97 - 12.27

Oil, percent dry basis . . . . . . . . . . 4,47 3.86 4.25 3.40 2.48 2.43 2.43

Fiber, percent dry basis . . . . . . . . 2,24 2.34 2.64 2.85 3.51 4.24 5.91

Digestible energy, Kcal/lb. . . . . . . 1,785.80 NA 1,717.30 1,691.50 1,660.50 1,631.90 1,610.80

NA = not available.

—

SOURCE L D HIII et al , Changes In Qualtty of Corn and Soybeans Between the United States and England Special Publlcatlon No 63 Agricultural Experiment Sta

tlon, Unlverslty of Illlnols, Urbana, IL, 1981
174

capacities up to 40,000 bushels per hour are

the norm. The general configurations of cleaning systems are found in commercial facilities.

First, the entire grain stream can be passed

through the cleaner, with the throughput adjusted to produce the desired amount of material in the cleaned product. Alternatively, the

grain stream can be overcleaned and the clean

out metered back as required.

Second, the entire grain stream can be

cleaned using a screen larger than the size required. The cleanings can either be recleaned

to remove smaller material or reintroduced

directly. This option is particularly useful when

handling both corn and soybeans because it allows the facility to use corn screens, thus reducing the time and costs associated with

changing screens. Third, the grain stream may

be divided so that only part is cleaned and part

left uncleaned,

All these designs are useful only if part or

all of the grain exceeds desired levels. This may

not occur at the first point of sale. Studies on

handling breakage indicate that for corn, about

0.5 percent broken corn and foreign material,

as defined by a 12/64-inch round-hole sieve, is

created at each handling. This percentage could

be higher or lower, depending on the particular handling facility and the drying method.

Breakage susceptibility in wheat is far less.

Once inert material such as stems, pods, cobs,

weed seeds, dirt, and chaff is cleaned out, no

further cleaning is required. However, depending on the type of grain and its susceptibility

to breakage, breakage will occur at each handling throughout the marketing chain. Thus

corn and soybean cleaners are located throughout the marketing chain and in every export

elevator, whereas wheat cleaners are located

closer to the first point of sale and, except in

a few instances, are not found at export elevators.

The amount of cleaning is dictated by the limits established by official grades, subsequent

discounts for particular factors, and storability. For corn and soybeans, official grade limits

are not normally exceeded at the first point of

sale. As these commodities move through the

marketing chain, however, they must be continually cleaned in order to meet grade limits.

Wheat dockage levels delivered by the farmer

to the first point of sale are purchased, with

dockage being deductible as a reduction from

weight, Cleaning wheat to remove dockage at

this point and throughout the marketing chain

is therefore strictly a function of economics

and, in many instances, quality is better regulated through blending instead.

In practice, four basic economic factors determine whether wheat should be cleaned or

not:

1. the cost of cleaning,

2. the price of screenings,

3. dockage levels, and

4. the cost of transportation.

A 1987 publication by North Dakota State University reported on the results of its yearly survey of elevator operators in that State (16). Of

168 elevator managers surveyed, 159 indicated

that wheat was cleaned prior to shipment. They

also indicated that incoming harvest wheat was

cleaned when dockage levels reached on average 2.6 percent. Wheat shipments exceeding

the 2.6 percent average were cleaned down to

an average 0.9 percent. After harvest, incoming dockage exceeding an average 2.1 percent

were cleaned down to an average 0.8 percent.

The North Dakota survey also indicated that

the cost of cleaning can range from 2 to 5 cents

per bushel, depending on cleaner capacities

(16), Since dockage is treated as a deduction

to weight, transportation costs to the final destination and price for cleanings are critical

when determining the economics of cleaning.

Transportation rates as well as the price for

cleanings have decreased in the mid-1980s.

Multiple-car and unit-train shipments have reduced the cost of moving wheat from the Northern Plains States to the Pacific Northwest.

When the cost of cleaning, transportation rates,

and the price of cleanings are evaluated, the
175

survey indicates that it is not economical to

clean wheat in these areas unless dockage levels

exceed 2 percent.

The amount of grain cleaning prior to storage revolves around the risk of grain deterioration as a result of mold and insect invasions

and the costs associated with maintaining quality. The effects of mold and insects on grain

quality, along with technologies used to maintain quality, are discussed in the section dealing with storage and handling technologies.

Fine material segregates in spoutlines, as discussed in other sections of this chapter. Hall

(25) found that materials that pass through a

12/64-inch round-hole sieve segregate in spoutlines, while larger pieces rolled with the whole

corn to the sides, This phenomena affects aeration since fine materials have higher airflow

resistance than whole kernels, and the air

detours around them, commonly causing overaeration.

Several other investigations on the effect of

corn particle size on aeration have been conducted. Small pieces (12/64 inch in diameter

and smaller) cause the most increase in airflow

resistance during aeration, and the finer the

particles, the more the resistance. However, the

level of broken corn and foreign material

present in the grain mass can also have an impact. Even though the impact of cleaning on

dryer performance and storage technologies is

well known, moisture content is the principal

factor in decisions regarding storability and

dryer performance, not cleaning.

New and Emerging Technologies

Aspiration cleaning is a relatively new technology being used in some wheat-producing

areas to clean grain and remove insects. Multipass systems, in which grain is aspirated several times at progressively increasing air velocities, have improved efficiency. Aspiration

cleaning will become more prevalent if clearly

demonstrated to be capable of cleaning at normal production handling rates.

Several cleaners in Europe are arranged to

use centrifugal force rather than vibratory motion or impact to cause screen separation. The

one offered in the United States also has aspiration before the screens. The principle was

designed to preclean wet grain before drying.

With the majority of corn being dried on-farm,

it is doubtful that a moderate capacity (4,000

to 10,000 bushels per hour) cleaner will penetrate the commercial market. However, it is a

viable concept for preparation of specialty shipments and might be useful to clean corn after

commercial drying.

Rapid sensing systems for physical properties open possibilities for on-line control of

cleaning systems. No commercial devices of

this type are available, but investigative work

is being done.

Blending

Blending can be defined as mixing two or

more grain lots to establish an overall quality

that may or may not be different from any one

individual lot. Blending occurs for three

reasons:

1.

2.

3.

there are economic incentives for grain to

beat a specific quality, no better or worse;

the uniformity of the reblended product

makes it better suited for handling, storage, or utilization; and

sometimes an aspect of a particular process requires a specific quality or range of

quality in preference to other possible qualities.

Except for factors such as protein and falling

number in wheat, the present U.S. marketing

system does not normally emphasize user properties, so the first two explanations are the most

applicable. However, as more user properties

(e.g., protein, oil, and starch) become trading

factors, situations will occur when a blended

product will be more valuable to the user.

The central issue in blending is whether it

has a positive or negative impact. The list of

important quality factors can be divided into
176

two categories: those that are defects (or will

cause defects) and those that are specially tied

to individual end use. The line is not always

clear, but defect factors are of negative value

to all users whereas user-sensitive factors will

be evaluated differently, even oppositely, by

different users. Primary examples of defect factors are foreign material and damaged kernels.

As all defect factors have negative value, blending these factors will not improve the value of

grain (29).

Blending can be neutral or even beneficial

for user-sensitive factors such as protein in

wheat. If the value of factors can be determined

on a linear continuous scale (e. g., protein in

wheat and soybeans and oil in soybeans), then

deliberate blending will neither help nor hurt.

However, if the premium scale is not proportionally sensitive, then blending may may not

be beneficial. Processes may also have to be adjusted to make the most use of varying qualities (e.g., steeping time in wet milling or protein in wheat milling), which means that

uniformity within the shipment as evidenced

by test results clustered around some mean

value will be preferred to random distributions.

Principles of Blending

Many States contribute to national wheat,

corn, and soybean production. Weather, genetics, and agronomic differences virtually assure

quality differences within and across crop years

and contribute to the lack of uniformity within

a particular grain. These differences exist for

whatever factors are used to describe quality.

For example, if an importer were to purchase

wheat today, the shipment could be comingled

with a multitude of varieties, from several

regions, covering several crop years.

As intrinsic factors start to be measured and

taken into account in the marketplace, the

regionality problem will be magnified. Figure

7-16 presents data on regional soybean protein

and oil. Blending will have to occur if fixed

specifications are set. If soybean protein and

oil are priced on a continuous scale with no

mandatory targets, growers in some areas will

face discounts relative to growers elsewhere,

The basic mathematics of blending are relatively simple. The quality of a blend is the

weighted average of the qualities being blended.

The application is straightforward when two

or fewer are involved. If several characteristics have economic value, however, then a profit function must be set up in terms of all relevant factors. The optimum blending proportion

is the one that yields maximum profit. Many

other considerations—storage space, market expectations, shiploading plans, and so on—must

be included. Linear program methods have

been used to analyze complex blending

problems (4 I).

If more than one factor is being controlled,

then the blend is most easily optimized if the

one quality factor is concentrated in all grain

lots used in the blend. This minimizes the effect of blending for that factor and allows concentration on the others. When the levels for

the factor are low, then concentrating on the

individual factor being blended will minimize

the number of secondary streams. This explains

why cleaning and relending broken grains

and/ or foreign material is preferred over blending two grain streams of differing percentages.

It is also easier to hold a uniform blend when

controlling a small flow rate of pure foreign

material, pure damage, or clean, high-moisture

grain.

U.S. grain-handling facilities are designed to

store large masses of relatively uniform grain

of some intermediate quality, with small special storage for lots concentrated in one quality factor (high moisture, high damage, high protein, etc.), although to a lesser degree in spring

and Durum wheat-producing areas. This is possible because the most heavily traded grades

allow the majority of the grain to fall within

broad limits and thus be stored en masse. As

additional quality factors are introduced, this

design and management philosophy will present more difficulties, since there will be more

factors to consider in profit maximization. In-
177

Figure 7-16.–U.S. Soybean Quality by Region, 1986

SOURCE. American Soybean Association, 1987

trinsic factors cannot be as readily concentrated

or manipulated as physical factors.

Current Procedures

Premiums and discounts can encourage or

discourage blending and are set by merchants

subject to buyers’ needs and supply conditions.

For example, high-damage corn is more likely

to be directed to export for blending into No.

3 than to a domestic processor buying No. Z.

Likewise, poorer quality soybeans are more apt

to fit in No. 2 export cargoes than in No. 1 purchases by domestic processors. On the other

hand, protein in wheat can be directed to either

the domestic or the export market using protein premiums and discounts.

A case in point is protein content in spring

wheat using March 1988 protein premiums and

discounts in both the Pacific Northwest and

Minneapolis markets. The base protein value

markets is 14 percent, In the Pacific Northwest,

protein premiums of 3 cents were being paid

for each 0.25 percent over the base, whereas

6-cent discounts were applied to shipments under the base, At the same time, in the Minneapolis market premiums of 5 cents were paid

for every 0.2 percent over the base with discounts of 3 cents being applied for shipments

under the base. With such a schedule, a shipper would be better off blending protein levels

for shipment to the Pacific Northwest and shipping 13 and 15 percent shipments separately

to the Minneapolis market.

Grain handlers do not solve complex mathematical formulas to adjust blending proportions

as they move grain. Table 7-9 shows a typical

example of four soybean lots being combined

to make a U.S. No. 2 grade. The equal-proportions blend would not necessarily be the high-
178

Table 7.9.—Blending of Four Soybean Lots to Make U.S. No. 2,

Maximum 13% Moisture

Moisture Damage

Lot

Valuea

(percent) (percent) (dollars per bushel)

11.5 1.0

2 . . . . . . . . . . . . . . . . . . . . . 14.5 1.2

3 . . . . . . . . . . . . . . . . . . . . . 12.5 1.0

4 . . . . . . . . . . . . . . . . . . . . . 11.5 4.0

Average value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Blend of equal

proportions. . . . . . . . . . . 12.5 1.8

Contract specification . . . 13.0 2.0

1.0 6.00

1.0 5.82

5.0 5.94

1.0 5.88

. . . . . . . . 5.91

2.0 6.00

3.0 6.00

aga~ed on typical d~gcount schedules relative to U.S. NO. 2. base Price of *.~/b”.

SOURCE: C.R. Hurburgh, “The Interaction of Corn and Soybean Quaiity With Grain Storage,” background paper prepared for

the Office of Technology Assessment, U.S. Congress, Washington, DC, 1988.

est profit one, but is quite common. If the foreign material were removed and reblended as

pure foreign material, more wet soybeans (lot

Z) and more damaged beans (lot 3) could be

blended without exceeding specifications. Likewise, if lot 3 were more concentrated in damage, it would exert more effect on the damage

percentage and less on other factors. Overall,

I however, profits from blending are possible

I only if the average quality of grain normally

exceeds specifications. The closer the specifications are to the available average quality, the

less the potential for blending.

Operationally, blending is accomplished with

varying degrees of sophistication. At export,

barge, and major inland terminals, grain is continuously sampled with a mechanical diverter

as it is being loaded. Samples are analyzed and

changes to the mix can be made. Generally, the

facility manager will target quality somewhat

better than the specifications to protect against

the chance that normal variability in loading,

sampling, and analysis will yield a result exceeding specifications.

Modern facilities have proportioning gates

that control the flow of individual qualities to

the blend. If the facility is equipped for any of

the cleaning/reblending options discussed in

the cleaning section, cleaner throughput and

relending rates will also be controlled from

the loadout control center. Older facilities do

not have continuous sampling and automated

flow control.

Quality Factors Affected by Blending

Moisture.—The primary reason for moisture

blending is purely economic, and it is most common at interior locations where high-moisture

grain is more available. Handlers and growers

routinely capitalize on cold weather to store

moderate-moisture corn (up to 20 percent) and

soybeans (up to 15 percent). Furthermore, carryover stocks from previous years are usually

much drier than market limits, offering an opportunity for blending with fresh wet grain

from the field at harvest. Moisture blending can

cause grain deterioration, as discussed in the

storage and humidity technologies section of

this chapter.

Particle Size.—Blending for particle size factors has stirred the most controversy because

these include dockage, foreign material, and

dust. As discussed in the cleaning section, corn

and soybeans break during each handling, creating foreign material and dust. This is compounded by the fact that corn breakage susceptibility increases about 40 percent for each

1-percent reduction in moisture (19). Soybean

breakage susceptibility increases 22 percent for

each l-percent reduction in moisture (32).

Breakage is not the critical factor in wheat.

However, since dockage in many areas of the

country is not removed, each handling generates dust, which is collected. Therefore, blending of these factors is essentially a defensive

operation to minimize the economic effects of

constant handling, breakage, and dust generation.
179

As mentioned in other sections of this chapter, as grain is loaded, fine material concentrates in the center of a grain mass and uniformly blended grain streams will not stay

uniform once loaded because fine material

segregates. No amount of blending will eliminate this problem.

Kernel Damage.—Blending damaged kernels

is a purely economic operation that exists because normal damage levels are less than allowed in specifications. Corn is harvested with

about 2 percent damaged kernels, soybeans normally with less than 0.5 percent, and wheat well

within the limits of No. 1 (2.0 percent). Grade

limits for damaged kernels in export shipments

of No. 3 corn (7 percent), No. 2 soybeans (3 percent), and No. 2 wheat (4 percent) are wide

enough to accommodate blending of any unusual or storage-damaged lots.

INTERACTIONS/FINDINGS AND CONCLUSIONS

Grain is a living, breathing organism and as

such is a perishable commodity with a finite

shelf life. The best harvesting, drying, storing,

handling, and transporting technologies in the

world cannot increase quality once grain is harvested. Each technology is a self-sustaining

operation, but the way each is used affects the

ability of the others to maintain quality. For example, if grain is harvested wet, not only will

this lead to increased breakage during harvesting, but it means the grain must be dried. Improperly used dryers means more breakage and

nonuniform moisture content. Moisture content, uniformity of moisture content, and the

amount of broken grain and fine materials affects storability and can have an impact on the

technologies used to maintain quality during

storage. Therefore decisions made at harvest,

as well as at each step thereafter, influence the

system’s ability to maintain and deliver a quality product,

As discussed throughout this chapter, grain

moisture and amount of broken grain and fine

materials stand out as the two critical factors

affecting the performance of each technology.

Moisture at harvest directly affects the

amount of kernel damage produced through

combining. For corn, physiological maturity is

obtained at about 30 to 35 percent moisture.

Although corn can be harvested at this point,

it is damaging to the kernel’s soft pericarp and

is not recommended. In the Midwest, it is generally recommended not to harvest until the

corn has field-dried to 26 percent moisture.

However, obtaining a 26 percent moisture in

the Northern States is not possible during wet

fall harvest periods, and corn must be harvested

at higher moisture contents or it will not get

harvested at all,

Since cereal grains and oilseeds are harvested

in the United States at moisture levels that are

too high for long-term storage or even shortterm storage and transportation, these commodities must be dried to acceptable moisture

levels. Corn, harvested at 20 to 30 percent moisture, must be dried to 14 to 15 percent for safe

storage. Wheat and soybean harvest moistures

are substantially lower, with their safe storage

levels marginally lower than harvest moisture.

In certain regions of the United States, wheat

dries naturally in the field. In some cases this

is also true for soybeans.

The process of drying has a greater influence

on grain quality than all other grain-handling

operations combined. For superior grain quality, it is imperative to optimize dryer type and

operation since half the corn crop is dried in

continuous-flow, portable batch, and batch-inbin dryers of the crossflow type. Of particular

concern is the increase in breakage of corn and

soybeans and the decrease in milling quality

of wheat. Artificial drying of wheat and soybeans, however, is not frequently required.

The main dryer operating factors affecting

grain quality are air temperature, grain velocity, and airflow rate. Operators can adjust the
180

first two on every dryer and, on some units,

can adjust all three. Collectively, the three conditions determine the drying rate and maximum

temperature of the grain being dried, and thus

establish the quality of the dried lot.

Over 80 percent of the United States corn

crop is dried on farms. On-farm dryers fall into

three categories—bin, non-bin, and combination dryers. Bin dryers are in general lowcapacity, low-temperature systems, able to produce excellent quality grain. Non-bin dryers,

the most popular dryer type, are high-capacity,

high-temperature systems that frequently overheat and overdry the grain, and thereby cause

serious grain-quality deterioration. Combination drying combines the advantages of both

systems (i.e., high capacity and high quality)

but requires additional investment, and is

logistically more complicated. A switch by

farmers from non-bin to combination drying

would significantly improve U.S. corn quality,

Off-farm dryers fall into three classes—

crossflow, concurrent-flow, and mixed-flow

dryers. All are high-capacity, high-temperature

units. In the United States, crossflow models

are the most prevalent; they dry the grain nonuniformly and cause excessive stress-cracking

of the grain kernels. Mixed-flow dryers are common in other major grain-producing countries;

the grain is dried more uniformly in these, and

is usually of higher quality than that dried in

crossflow models. Concurrent-flow dryers have

the advantage of producing the best quality

grain; their disadvantages are the relatively high

initial cost and the newness of the technology.

A change from crossflow to mixedflow/concurrent-flow dryers will benefit U.S. grain quality.

Moisture content and uniformity within a

storage facility are critical to maintaining grain

quality, as demonstrated by the Allowable Storage Time Table for corn. The interaction between moisture, temperature, and relative humidity spurs mold growth, increases insect

activity, and causes other quality losses. Basically, grain moisture in equilibrium with 65 percent relative humidity will support mold activity, but different grains will create the

equilibrium relative humidity at different moisture levels. That is why wheat and soybeans

cannot be stored at the same moisture content

as corn. In the case of controlling insects, high

moisture contents increases absorption of

fumigants such as methyl bromide, requires an

increase in dosage, and accelerates the breakdown of protective treatments such as malathion.

The equipment and methods used to fill a storage bin affect the performance of aeration systems used to control the effects of moisture/temperature/humidity. Dropping grain into the

center of a bin causes a cone to develop, with

the lighter, less dense material concentrating

in the center (in spoutlines) while the heavier,

denser material flows to the sides. This impedes

airflow during aeration, and molds can begin

to grow almost immediately.

In large horizontal storage areas, loading

from the center or from a loader that is gradually moved backward through the center of

the building as the pile is formed causes similar problems, If grain is piled over each aeration duct on the floor by moving the loading

device back and forth, airflow will be greatly

increased. However, airflow distribution is not

as uniform as in upright bins. Some methods

of filling piles also result in fine materials concentrating in local areas. These accumulations

are more subject to insect and mold growth,

and they divert airflow. But piles are difficult

to aerate, and the shape of some restricts uniform airflow.

Nonuniform moisture levels can lead to spoilage in localized areas within a storage facility.

Even assuming that moisture and temperature

are uniform within a grain mass, they will not

remain so over time. Moisture will migrate in

response to temperature differentials. If the outside air is warmer than the grain, the circulation reverses, and the area of condensation is

several feet under the grain surface, but still

in the center.

The effect of moisture migration on storage

is that grain assumed to be in a storable condition will not be. Cold weather migration primarily affects grain in land-based storage, causing deterioration as temperatures rise in the

spring. Warm weather migration is particularly
181

vexing for grain in transit both from cold to

warm areas of the United States and from the

United States through warm waters to foreign

buyers, A barge or ocean vessel is basically a

storage bin and will experience the same migration phenomena as land-based storage facilities.

Broken Grain and Fine Materials

Three factors—cylinder speed, moisture at

the time of harvest, and amount of grain

damage—are interrelated. In general, whenever

grain is harvested, damage or breakage occurs.

However, grain damage is much greater in each

case on extremely wet or extremely dry grain.

When grain is harvested at high moisture levels,

the kernel is soft and pliable. Moist kernels deform easily when a force or impact is applied,

and greater force is needed to thresh wet kernels than dry ones, Thus, wet kernels suffer

more damage than drier kernels. However,

drier kernels can break when the same force

is applied. Therefore, optimal conditions exist

for each grain.

In addition to grain breakage due to moisture content, factors such as weed control and

kernel density, especially in wheat, also affect

a combine’s ability to harvest and deliver clean

grain. Cutting below the lowest pod or wheat

head inadvertently introduces some soil into

the combine. Most soil is aspirated from the

rear unless there are soil particles about the

same size as the kernel, in which case they pass

through the cleaning sieves with the grain.

Harvesting technologies normally remove

material larger than the grain (such as plant

parts) and material significantly smaller (like

sand and dirt). Sloping terrain, however, can

affect this process. Side slopes also create problems since the tendency is for material to congregate on the downhill side of the cleaning

shoe.

The main factor affecting the combine’s

cleaning performance is the amount and type

of weeds present in the field during harvest.

Weed control is one of the most serious problems facing many wheat producers in the

United States. This is also true for Southeastern U.S. soybean-producing areas, where a

warm wet climate is conducive to weed growth,

The amount of weeds affects not only yield, but

also the amount of foreign material present in

the harvested grain and the combine’s ability

to remove this material.

Combines are being modified to improve performance in weedy fields. In the case of wheat,

kernel size has been decreasing, which complicates this modification. The trend toward

smaller kernel size is a concern because the

seeds of most grassy weeds are smaller and

lighter than wheat, Thus, smaller wheat kernel size reduces the margin between wheat and

weed size and, therefore, increases the difficulty of cleaning within the combine.

As discussed in the drying technology section, rapidly drying moist grain with heated air

causes stress cracking. The drying operation

itself does not cause grain breakage, but can

make grain more susceptible to breakage in

later handlings. Cleaning grain before it reaches

the dryer can improve dryer efficiency. Introducing clean grain to the dryer:

●

●

●

results in a more uniform airflow in the

dryer and thus a more uniform moisture

content of the dried grain;

decreases the static pressure (airflow resistance) of the grain, thus increasing the

airflow rate and dryer capacity; and

eliminates the drying of material that

detracts from final grain quality,

Obviously, precleaning also has disadvantages.

It requires additional investments in cleaners,

the handling of wet broken corn and fine material, and the rapid sale of wet, easily molding

material, and it results in some dry matter loss.

Although the advantages of precleaning wet

grain are fairly well understood by dryer operators, most do not preclean. The quality of U.S.

grain would improve substantially if precleaning were adopted,

Mechanical damage during handling results

in grain breakage, which produces broken grain

and fine materials, This causes a decrease in

quality, greater storage problems, and an increase in the rate at which mold and insects

invade stored grain,
182

Research has shown that breakage in handling is more significant for corn than for wheat

and soybeans. Higher moisture content and

higher temperatures prove to be the optimum

conditions to minimize breakage but are opposite of the optimum safe storage moisture and

temperature. The effect of repeated handlings

on grain breakage is cumulative and remains

constant each time grain is handled or dropped.

This is true whether or not broken material is

removed before subsequent handlings.

The impact of grain breakage and fine materials on all aspects of the system has resulted

in the need to clean grain. Cleaning wheat in

commercial handling facilities is normally

limited to removing dockage, insects, and to

a limited degree shrunken and broken kernels.

For corn, cleaning regulates the amount of broken kernels and foreign material, and for soybeans, the amount of foreign material and split

soybeans.

Cleaning corn to remove broken corn and foreign material is required at each handling in

order to meet contract specifications and avoid

discounts. For wheat, however, the majority of

the dockage is generated during harvest and

normal handling does not cause significant increases. Therefore, cleaning is not required at

each handling. Soybeans, on the other hand,

fall somewhere in between regarding their

breakage susceptibility and the amount of cleaning required at each handling.

The amount of grain cleaning prior to storage involves the factors of risk to grain deterioration as a result of mold and insect invasions

and the costs associated with maintaining quality. In the case of fumigation: broken grains,

grain dust, and other fine materials have the

greatest effect on the performance of insect control interventions. When a protective treatment

is applied, grain dust may absorb much of the

insecticide, which reduces the effectiveness.

Likewise when a fumigant is applied, concentrations of dust and fine material may require

increased dosages to penetrate the grain mass.

Dust also inhibits penetration of fumigant gases

and causes the gas to channel so that penetration is slow or stopped in certain parts of the

grain mass.

Ability of System to Maintain

Quality

Technologies are in place to harvest, maintain, and deliver quality grain. Each technology must be used, however, in a manner conducive to maintaining grain quality.

Although data indicate that nearly any combine can deliver acceptable quality, farmeroperated combines tend to have higher levels

of grain damage than the combine should deliver. From a technology standpoint two areas

need emphasis:

1.

2.

greater education efforts to help operators

better understand the interactions of cylinder/rotor speed, concave openings, fan

speed, and sieve openings with grain quality and grain losses; and

more monitoring devices and possible

automatic controls on combines-to help

operators adjust or fine tune the combine.

Weed control and its relationship to kernel

size and density are critical to optimum combine performance. Unless new technologies addressing this area are developed or better weed

control measures for use by the farmer are

forthcoming, the combine’s ability to harvest

and clean grain will continue to present

problems.

A significant improvement in grain quality

can be obtained by optimizing the dryer operating conditions of existing crossflow dryers,

by precleaning wet grain, by selecting the best

grain genotypes, and by installing automatic

dryer controllers.

Molds will grow on any kernel or group of

kernels that provide the right conditions. Therefore, moisture content and moisture uniformity within storage facilities are critical to

maintaining grain quality. Maintaining low

temperatures and moisture levels in grain are

the principal ways to preserve grain quality and

prevent damage from molds and insects. Aeration is also a very effective tool. The rate of

development of both molds and insects is

greatly reduced as temperature is lowered.

Many storage bins, especially on the farm,

are equipped with aeration systems that are
183

often not used effectively. Farm storage bins,

especially smaller and older ones, often are not

aerated. Small bins will cool or warm with the

changing season quickly enough that moisture

condensation may not be a serious problem,

A majority of farm aeration systems are either

not operated at all or not used enough. The most

common problem is not running the fans long

enough to bring the entire grain mass to a uniform temperature level. If a cooling front is

moved through only part of the grain, a moisture condensation problem is likely at the point

where the warm and cold grain meet.

In addition to aeration, the turning and transfer process mixes grain and contributes to a

more uniform moisture and temperature. In facilities not equipped with aeration, turning has

been the traditional means of grain cooling.

However, turning requires much more energy

to cool grain than aeration does, and it can contribute to physical damage by breaking the

kernel,

Turning grain cannot be performed in horizontal or pile storages because of the difficulty

in unloading and moving the grain. In order

to turn grain, a handling system must have

empty bins connected by a conveying system.

This is not the case on most farms.

Most grain storage facilities provide a natural habitat for stored-grain insects even when

the facility is empty. Grain residue in floor

cracks and crevices, wall and ceiling voids, and

ledges provide an ample supply of food to sustain several insect species. Thorough cleaning

is the first and most effective step toward preventing insect infestation of freshly harvested

grain. Because insects live from season to season, cleaning and removing trash and litter is

important. Also, a thorough cleaning should

precede any insecticidal treatment of storage

facilities if the full value of the treatment is to

be expected.

For several reasons—such as remoteness of

farm storage facilities, small amounts of grain

to be treated, and lack of information—farm

storage facilities are inadequate to receive an

insect control treatment. Therefore, when grain

that has not received a properly applied treatment is marketed, it becomes mixed with noninfested grain and magnifies the problem, thus

creating greater loss and the need for more expensive and time-consuming remedies,

The high-speed, low-cost U.S. grain system

does not readily accommodate special quality

needs. While these needs can be met by slowing belt speed, installing and using cleaning

equipment, eliminating unneeded handlings,

and preserving the identity of grain, most of

these actions increase costs.

All the factors affecting quality just discussed

—nonuniform moisture, moisture migration,

temperature and humidity, insect invasion, and

mold development—have an impact on grain

quality during shipment. No mode of transportation is equipped with aeration, nor can grain

temperatures and corrective actions be taken

during shipment. And moisture migration can

be more dramatic during shipment since grain

can undergo several outside air temperature

and humidity changes, This is especially true

when grain is loaded in a cold climate and transported through warm water rather quickly to

a warm humid climate. Therefore, moisture

uniformity is critical to maintaining quality during shipments.

The interactions between technologies regarding moisture content and breakage on grain

quality are evident. Each technology is capable of preserving grain quality. Once inert material such as weed seeds, dirt, stems, cobs, and

so on are cleaned out of grain, no further cleaning is required. But grain, especially corn, must

be cleaned to overcome breakage due to handling in the system and is inevitable. Once grain

quality deteriorates at any step in the process,

it can never be recovered. As demonstrated by

the Allowable Storage Time Table for corn,

shelf life is a time line with a certain share expended at each storage condition, Once this

time has passed, there is no way to recover what

has been lost.
184

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Chapter 8

Analysis of
CONTENTS

Page

Inspection and Testing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. ....189

FGIS Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...............190

Non-FGIS Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....,..... 190

Export Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...................190

Testing Technologies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..............191

Establishing Grain Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....196

Evaluation of Grain Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......200

Historical Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..........201

Objectives of Grain Standards . . . . . . . . . . . . . . . . . . . . . . . . ..............201

Integrating the Four Objectives. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. ....204

Alternatives to the Present System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....205

Applying Economic Criteria to Grain Standards . .......................209

Grade-Determining, Non-Grade-Determining, and Official

Criteria Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............210

Establishing Grade Limits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...211

Number of Grades . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..............211

Evaluation of Recent Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. ....212

Optimal Grade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ......212

The Grain Quality Improvement Act of 1986 . . . . . . . . . . . . . . . . . . . . . . ...212

Prohibitions. Market Incentives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ......212

Findings and Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............213

Chapter 8 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ................215

Box

Box Page

8-1. Testing Technologies for Aflatoxin. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..194

Figure Page

8-1. Alternative Authorities to FGIS for Implementing New Tests . ........197

Tables

Table Page

8-1. Wheat Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ................198

8-2. Corn Standards.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...........199

8-3. Soybean Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...............199

8-4. Examples of Quality Measures Under USGSA and AMA. . . . . . . . . . . ..199
Chapter

Analysis of U.S. Grain Standards

The evaluation of the current U.S. inspection

system, possible alternatives, and proposed

changes in grain standards requires principles

on which to base the criteria for change. This

chapter sets forth those principles. No attempt

has been made to assess the economic consequences of the alternatives because they depend

on the market response to the actions of many

individual companies involved in marketing

grain, Uniform, accurate, and objective quality measurement should be based on the logic

and consistency of the system, not on the economic benefits to individual companies or sectors (2).

Marketing efficiency requires a system of descriptive terms that enable purchase and sale

by description. The sale of millions of bushels

of grain by telephone and telex would not be

possible without the common language on quality and value provided by U.S. grain standards.

Since most commercial transactions use only

one or two grades, the many diverse qualities

produced by nature and varying farm practices

are combined into a few relatively uniform

standardized categories during the marketing

process. The move toward a uniform product,

however, conflicts with the profit-maximizing

principle of product differentiation,

private gains from product differentiation are

offset by aggregate losses in the efficiency of

market transactions, It is not surprising to find

individual exporters and domestic grain handlers unwilling to support change despite eviINSPECTION

Grain can be inspected many times as it

moves from the farm to its ultimate destination,

as demonstrated by figure 2-2 in chapter 2. Normally grain is tested for one or more important characteristics each time it is moved into

or out of a grain elevator. The number and type

of tests performed vary from those provided

for in the grain standards to specific end-use

dence that it would benefit the industry as a

whole. Measures of oil and protein in the soybean standard may logically meet opposition

from individual firms whose profits depend on

being the first to identify sources of soybeans

with oil content above the average for that crop

year,

Uniform grain standards provide all buyers

and sellers with equal access to information on

value. This forces competition on the basis of

operating efficiency, rather than on control of

information, The inability to gain acceptance

of voluntary standards prior to the 1916 United

States Grain Standards Act (USGSA) can be

traced to conflict between market opportunity

for individual firms through product differentiation and the efficiency of marketing associated with product uniformity. Only through

nationally enforced grain standards could individual firms reap the benefits of industrywide

market efficiency emanating from uniform

standards.

The 1916 USGSA and subsequent amendments and regulations have established two

areas of responsibility for the Federal Grain Inspection Service (FGIS) of the U.S. Department

of Agriculture (USDA):

to establish uniform grades and standards,

and

to implement national inspection procedures to assure accurate and unbiased

results.

AND TESTING

tests, such as breakage susceptibility in corn,

to laboratory tests like dough handling properties of flour.

No single national policy outlines what tests

will be performed or who will perform them.

The USGSA requires that grain standards be

developed and used when marketing grain. The

189
standards provide tests covering such items as

moisture content, bulk density, and amount of

impurities, but do not specify who will perform

the tests or what tests will be conducted on

grain moved within the United States. In fact,

two USDA agencies have been authorized by

Congress to provide testing services, using the

grain standards, on grain moving domestically.

Except for protein content in wheat, other tests

such as for protein/oil quantity and quality and

specific end-use tests are performed at the discretion of the ultimate user. The only mandatory testing is performed by FGIS on export

grain.

In practice, grain traded between two companies is normally tested by FGIS or one of its

affiliated agencies, using tests contained in the

grain standards. However, some domestic processors and nearly all grain companies that buy

farmer-owned grain purchase it on the basis

of tests performed by their own personnel.

These groups, except in cases where a particular buyer requires additional tests, normally use

some or all of the tests provided for in the grain

standards. In other cases, in-house testing is

used by grain companies on shipments moving between their own facilities.

FGIS Inspection

The inspection system mandated by USGSA

currently consists of FGIS offices with Federal

inspectors located at major ports, 72 designated

State and private agencies located in the interior

of the United States, and 8 delegated State agencies at ports not serviced by FGIS. FGIS administers field offices throughout the country to

oversee the activities of State and private inspection agencies.

All nonfederal employees employed by State

and private agencies authorized to perform inspection on behalf of FGIS must pass examinations on grading proficiency and must be

licensed. These individuals can be licensed to

inspect one or more of the grains for which

standards have been established. In no instance,

however, can individuals perform official inspections unless they hold a valid license for

that grain.

In addition to developing standards and providing inspection services, FGIS:

●

●

●

●

●

●

develops and publishes inspection procedures,

evaluates and approves equipment for use

during inspection,

monitors inspection accuracy of FGIS employees and licensed inspectors,

periodically tests sampling and inspection

equipment for accuracy,

provides appeal inspection, and

responds to complaints regarding service.

FGIS also audits its own activities to ensure that

service is being provided on a nondiscriminatory basis and that no licensed individual has

a conflict of interest.

Non-FGIS Inspection

Inspection services using grain standards

established under USGSA may be performed

by grain company employees or by private companies not affiliated with FGIS. Grain received

from farmers is seldom graded by FGIS or FGISlicensed inspectors but by employees of the elevator or processing firm.

The standards established under USGSA are

generally used as the basis for inspection by

company employees. FGIS procedures may or

may not be followed, based on individual company policy. Equipment and inspection accuracy are not monitored unless the company

has established an internal monitoring program. In many cases, company inspectors compare their test results to those obtained by FGIS

or FGIS-licensed inspectors on the same grain

in an effort to ensure accuracy. Either buyer

or seller may request FGIS or an FGIS-licensed

inspector to check the grain if the results of the

private inspection are in question. However,

neither party is required by law to abide by the

inspection results.

Export Inspection

USGSA requires that all grain being exported

be inspected by FGIS or a FGIS-delegated State

agency. The only exceptions are for grain mov-
191

ing into Canada and Mexico by land carrier and

for small exporters who ship less than 15,000

metric tons in a given year.

Notwithstanding this requirement, importers

often request private companies in the United

States to represent their interests and inspect

the grain as it is being loaded. Such inspections

can include checking for grade as defined by

USGSA grain standards or for factors not covered by these standards, such as falling number in wheat or oil and protein in soybeans.

When private companies perform inspections

using the grain standards, two groups issue

certificates—FGIS and the private company.

Samples obtained by private companies are

often submitted to FGIS for analysis and grade,

and results from FGIS are then used as the basis for the private company’s certification. In

other instances, private company inspectors

actually perform the inspection. Settlement in

most instances is based on the results provided

by FGIS or a FGIS-delegated State agency. In

rare cases settlement has been based on the private inspector’s results or destination grades.

Testing Technologies

Since no single policy exists for inspecting

grain, no one group is responsible for developing and overseeing the tests and equipment

used. FGIS provides independent, third-party

services using tests contained in the standards.

Other tests such as for protein content and falling number tests in wheat, aflatoxin in corn,

and ethylene dibromide residue are also provided, All tests done under the authority of FGIS

are regulated in that the equipment must be approved, procedures for its use developed, and

the accuracy of results monitored.

Tests provided under the authority of the

Warehouse Division of the USDA, on the other

hand, are not regulated to the same degree. No

requirements for type of equipment, procedures

for its use, or monitoring of equipment accuracy

have been developed under this program.

In some instances, individual States have developed criteria for approving equipment and

monitor the equipment’s accuracy. Professional

societies such as the American Oil Chemists’

Society and American Association of Cereal

Chemists develop criteria for approving tests,

publish performance procedures, and establish

programs to ensure equipment accuracy. Many

tests covered by professional societies are not

in the grain standards.

Regardless of which tests are performed and

who performs them, several factors are important. These include instrument precision and

standardization, calibration, the choice of reference methods and traceability to standard reference methods when developing rapid objective

tests, and natural error resulting from sampling.

Standardization

The term standardization means that a measuring device has been adjusted to be in fundamental agreement with a universally accepted standard and that ongoing efforts are

made to keep it in agreement (4). Standardization is vital to fair trade and will be even more

important as technologically advanced testing

equipment is introduced into the marketplace.

The validity of a commercial measurement is

judged by comparing it with a more stringent

method that is accepted as determining the true

value. The standard is the base method defined

as being the true value. Working standards are

devices and methods used to actually validate

an individual test instrument. For dimensional

measures such as mass, time, and volume, the

reference standards are very precise. The procedure of matching routine devices against working standards and working standards against

reference standards introduces little variability.

Probably the most visible example of standardization is the weights and measure program

coordinated by the National Bureau of Standards (recently renamed the National Institute

of Standards and Technology* (NIST)) of the

Department of Commerce in conjunction with

the National Conference of Weights and Measures. NIST develops specifications for instru-

*The National Bureau of Standards was recently renamed the

National Institute of Stand arcls and Technology (NIST) \t.ith the

passage of the Omnibus Trade and Competitiveness Act of 1988

(Public Law 100-418) as of August 1988.
192

ment precision and accuracy along with scale

tolerances, and maintains national standards.

Scale testing agencies follow NIST procedures

in performing periodic testing using field standards that can be traced back to the NIST national standard. In the case of grain measures

other than weight, no single national organization exists for standardizing tests.

Measuring grain quality is difficult to standardize because the true answer is not always

known, as in the case of characteristics such

as moisture, protein, and oil content. The reference method is therefore defined rather than

proven. Choosing the reference method, however, can be difficult since it can also be as variable as the instruments themselves. For moisture, the standard reference is the air-oven

method; for protein, it is the kjedahl procedure.

The kjedahl procedure for determining protein is internationally accepted and used. Currently, protein can be determined rapidly by

using near-infrared-reflectance analyzers (NIR).

These instruments measure reflectance readings at various wavelengths. The precision

(repeatability) of the kjedahl procedure is+ 0.15

and for NIR it is ± 0.10. Therefore the NIR is

more precise than the kjedahl, but after standardizing NIR to the kjedahl procedure, the results obtained with NIR are ± 0.2 to the kjedahl.

In the case of moisture, choosing a reference

method is more difficult since no one method

is universally accepted. As on electronic moisture meters, FGIS has approved the Motomco

brand meter for its testing program and calibrates it to the air oven. In States that do not

enforce moisture meter accuracy or that allow

different sets of calibrations to be used, several

types of meters test 1.0 to 1.25 percentage points

higher than the air oven and the Motomco. In

addition, some meters used on farms are less

accurate than those used by industry (5). This

could result from the fact that not all manufacturers standardize to the air oven since there

Photo credit: OTA Staff Photo

The near-infrared-reflectance analyzer (NIR) is the

most advanced rapid objective testing technology. It

currently is used to measure protein content in wheat.

It will soon be used to measure oil and protein content

in soybeans and corn protein.
193

is no legal requirement to do so. As all oven

methods are empirical, relying on weight loss

that is assumed to be water, varying oven parameters will give varying results. Most international buyers use an oven method standardized to the Karl Fisher titration method. In the

United States, this is not the case, and some

feel that the United States is underestimating

corn moistures by as much as 0.7 percent.

Further difficulties arise in standardizing

tests when subjective measurements are involved. Results for many of the current tests

contained in the grain standards are performed

by visual and sensory evaluation and rely on

human judgment. FGIS monitors its own accuracy and has developed visual aids as the basis for determining many visual tests, such as

the degree of damaged kernels. These types of

tests are difficult to standardize, and accuracy

can vary widely especially when the same tests

are performed without using FGIS visual aids

or being subjected to FGIS oversight.

Calibration

In addition to having standardized tests, the

equipment used to determine grain quality must

be calibrated to standard reference methods.

The calibration must always contain the full

range of properties and equipment variations

that will be encountered in general use, so that

the instrument will not be overly sensitive to

inevitable variations. However, the major calibration issue in grain testing is the pervasive

variability of these tests. Calibration is further

complicated by having to use actual grain samples to calibrate instruments, which introduces

sampling variation independent of analytical

error. As discussed, both the instruments to be

calibrated and standard reference methods are

subject to error. Changes in grain properties

due to climatic variables complicate the problem of obtaining truly representative sample

sets. In addition, as with NIR analyzers, units

of the same brand are not identical, which

means that the same calibration constants cannot be universally used. It should be noted that

NIR calibrations require continuous monitoring for accuracy. Lack of monitoring contributed to the recent controversies over the accuracy of FGIS wheat protein testing.

The chain between the instrument used in

the field to the standard reference method is

referred to as traceability. The more steps there

are in the traceability chain, the more chance

there is for compounding random errors from

one step to the next. In the case of moisture,

for example, a standard meter in the main laboratory is standardized to the air oven, standard meters in the field can then be checked to

the standard meter in the main laboratory, and

field-standard meters can be used to check individual meters. Minimizing the number of

comparison steps in the traceability chain may

or may not maximize accuracy, depending on

the actual size of the random variations.

Source of Testing Errors

Since any test result is based on a small sample that represents the entire population, test

sample portions are subject to bias and variability, and any test result is really only an estimate of the properties of the entire population.

The types of variation can be described as random and nonrandom. Nonrandom variation

occurs from uneven distribution of grain properties, improper sampling procedures, and inaccurate measurement. Random variation is

natural and unavoidable, since each grain kernel differs from all others.

If a load of grain is homogeneous, the closeness of the test result to the actual condition

is governed by the laws of probability. The sample size required to produce a result that has

the desired probability of approaching the actual condition of the grain can be calculated.

To increase the probability, additional quantities of grain must be obtained or the size of the

sample actually tested must be increased. For

example, at a 90-percent confidence level a test

portion size will produce results within a defined range. To narrow the range, a larger portion is required or more than one analysis must

be performed to increase the accuracy of the

result.

When setting portion sizes, the frequency of

occurrence within a grain mass must also be
194

considered. For example, aflatoxin in corn can

affect only a few kernels in a grain mass and

in order to detect levels of 20 parts per billion,

which is the limit established by the Food and

Drug Administration (FDA), 10 pounds of corn

should be examined. This compares to only 2.5

pounds of grain required to determine the

weight per bushel. (For additional information

on aflatoxin testing technologies see box 8-l.)

Uneven distribution in a load of grain is more

of a nonrandom error problem with some characteristics than others. For example, variance

in weight per bushel—even though it can fluctuate within a load—is normally not that great.

Moisture, on the other hand, can vary due to

mixing or flow characteristics of damp and wet

corn. Other factors, such as fine material, segregate and cause uneven distribution within a

load. The method and type of sampling is therefore critical to obtaining a truly representative

sample. Other nonrandom errors involve inaccurate measurements from incorrectly calibrated and maintained instruments, from

human error, or from not following correct

procedures.

Knowledge of the source of the variation is

critical for assessing and improving the accuracy of test results. For example, improving

moisture meter precision is an unnecessary effort because it contributes less than 10 percent

of the total variability associated with the test

(4). Moisture measurement errors arise mainly

Box 8-1.—Testing Technologies for Aflatoxin

Aflatoxin, a known carcinogen, appeared in a large proportion of the corn crop for the first time

in many years due to the extremely dry weather conditions in 1988. The principles discussed in this

section are very germane to the ability to test for aflatoxin.

Aflatoxin is a secondary metabolize produced by the fungus, aspergillus flavus, which infects the

corn during field growth. Environmental conditions that favor the production of the mold are high

temperatures coupled with dry, drought type conditions during kernel maturation. Aflatoxins are

particularly important metabolizes because they are toxic and potent animal carcinogens in excess

of certain threshold levels.

It is not uncommon for some of the corn crop in the South and Southeast to be infected with

aflatoxin at levels that exceed FDA guidelines. Due to the stress this year’s crop underwent, the incidence of aflatoxin extended well beyond these regions into the corn belt, especially the Eastern corn belt.

At the present time, testing technologies are not adequate. The rapid test used at the country

elevator or terminal is not always reliable. And the more reliable tests are not conducive to elevator

environments. The most common and rapid test is examination of corn under an ultra-violet light.

This is a screening method which does not quantitate the aflatoxin. Contaminated corn will have

spots on the kernel that fluoresce a bright greenish-yellow (BGY). But the presence of BGY does not

necessarily mean aflatoxin is present. The possibility therefore exists of false positive test results.

Corn can also be tested with the Holaday-Velasco minicolumn or thin-layer chromatography methods. The minicolumn test, which takes about 45 minutes, gives indications of whether the corn exceeds the 20 parts per billion guideline established by FDA. Thin-layer chromatography, which takes

between 3 and 4 hours, provides quantitative results of aflatoxin levels.

The minicolumn and thin-layer chromatography tests are most suited to laboratory environments.

Both use chemicals that must be controlled and are not suited to the normal grain elevator environment. Recently, several new technologies, such as methods based on enzyme immunoassay or rocket

immune assay techniques, have been developed to detect aflatoxin that require less chemicals and

are more suited for use in grain elevators. They also produce results in a more timely manner. These

technologies are currently being reviewed by the American Association of Cereal Chemists. As with

any method, adequate sampling must be used because aflatoxin is not uniformly distributed among

kernels.
195

from differences in electrical properties of grain

samples, not from the meter’s precision. When

examining the variability of any test made with

an instrument, it is essential to know the relative contribution of instrument error.

Sampling

Grain samples are obtained with either online or stationary methods. On-line sampling

can be done manually, using an Ellis cup or

a pelican sampler, or mechanically, using a

diverter-type mechanical (D/T) sampler. This

equipment allows samples to be drawn from

a moving stream of grain being carried on a

belt or within a spout, or from a free-falling

stream. Samples drawn on-line are generally

considered to be most representative since the

grain is sampled more frequently and is more

homogeneous in nature than stationary grain.

Export cargoes must be sampled with a D/T.

Many barge and railcar shipments are also sampled with this method even though there is no

requirement to do so. D/Ts provide quite large

samples that must be reduced in a secondary

sampler to more workable sizes. The smaller

samples are further divided in a laboratory

divider to the prescribed test portion sizes. It

is important to recognize that every subdivision as well as the initial sample collection contributes potential errors. Shippers must therefore allow for sampling variations as well as

established testing procedure errors when loading grain of a desired quality.

Stationary sampling is usually performed

with a grain probe. Because a probe obtains

samples from only one point in the grain mass

at a time, multiple probings are crucial in obtaining representative samples. Probing patterns have been developed to ensure representative samples are obtained and to counteract

the segregation of fine material in grain at rest

in a carrier. However, probes cannot reach the

bottom of barges or hopper railcars, which affect the representativeness of the entire grain

mass.

Probing grain is time-consuming and laborintensive, and current probing patterns only

obtain about 5 pounds of grain. Mechanical

truck probes have been developed and are being used in some locations to reduce the cost

and labor requirements. But, in many locations,

such as country elevators, only one or two probings per truckload are taken or a pan full of

grain is taken as the truck is unloaded. This

compares to the five-to-nine probings required

under FGIS procedures. Limited sampling

makes the test results more vulnerable to

nonuniformity within the grain mass.

As indicated, the sample size used has a direct

bearing on the test result’s accuracy. For

aflatoxin, the 10 pounds required to accurately

Photo credit: U.S. Department of Agriculture

The diverter-type mechanical (D/T) sampler allows grain to be drawn from a moving stream.

Samples drawn from a D/T sampler are considered to be most representative since grain

is sampled more frequently and is more homogeneous than stationary grain.
Photo credit: OTA Staff Photo

Stationary sampling is performed by a grain probe.

Multiple probings are crucial in obtaining a

representative sample. In many locations, such as

country elevators, only one or two probes are taken

compared to the five to nine probes required

under FGIS procedures.

detect aflatoxin requires that a truck be sampled twice using the current five-to-nine probing pattern, which only yields 5 pounds. Getting 10 pounds from a D/T sampler is simpler

since large quantities are obtained through the

normal course of sampling. If increased accuracy is required, or as additional tests are

adopted requiring larger sample sizes, the impact on the test’s accuracy must be weighed

against the cost of obtaining the sample. This

will be especially relevant to samples obtained

at the first point of sale from trucks.

Criteria for New Technologies

As additional tests on an ongoing basis become more relevant, criteria must be established to govern the design of rapid test requirements. Yet, development of rapid tests must

meet the basic criteria associated with standardization, traceability to standard reference

methods, and calibration. In addition, rapid

tests must be evaluated in terms of speed, cost,

accuracy, durability, and capability of handling

wide ranges in quality.

The most notable advance in rapid objective

testing technology has come from using NIRs

to measure protein content in wheat. This technology has been discussed to some degree

throughout this section. Considerable work is

being done to develop additional tests with NIR,

which will be particularly important at the first

point of sale. Calibrations for barley protein are

being developed. Work is also being done on

developing calibrations for determining soybean oil and protein along with corn protein.

The ability of NIR to determine wheat hardness, along with other important tests for wheat,

is also being investigated.

The first point of sale will probably be the

most difficult place to introduce new technologies, The time constraints are severe and the

resources, both human and capital, are limited.

Yet, the demands of testing at this point should

be paramount in designing new tests. As these

are developed and introduced, the impact of

the amount of sample required to perform not

only the particular test but more importantly

all the tests required at the first point of sale

must be evaluated in terms of practicality.

Many of the potential new tests require the

grain be ground or processed before testing,

while the tests currently in the grain standards

are performed on the grain as a whole. As more

tests are introduced that require processing, the

impact of the sample size required to provide

accurate results versus the quantity of sample

obtained through stationary sampling becomes

critical. For example, FGIS introduced a test

for sunflower seed oil content, The sample size

required to predict oil content accurately was

determined to be 250 grams, which would have

required double probing of stationary grain lots

and consequently increased testing time and

costs. Thus a trade-off between accuracy and

cost became necessary. To overcome this problem, a smaller sample size (45 to 50 grams) was

established but duplicate tests were required

to help minimize the impact of lowered accuracy due to smaller sample size.

Establishing Grain Standards

Standards are established by FGIS under the

authority of Section 4 of USGSA. In the case
197

of corn and wheat, the factors contained in the

standards were selected in the early 1900s. Soybean standards were established in 1922 as

voluntary and brought under the USGSA by

congressional amendment in 1941. No changes

were made in the number of factors included

until moisture was removed as a factor from

wheat in 1934 and from corn and soybeans in

1985, The grade limits and factor definitions

have been changed frequently during the years,

however; tables 8-1,8-2, and 8-3 contain the current standards for wheat, corn, and soybeans.

The procedure for changing grades is clearly

specified in USGSA. Proposed changes require

publication in the Federal Register, solicitation

of comments, and, in the case of the new or

amended policies, a 1-year waiting period before becoming effective.

Introducing new factors requires an understanding of the alternatives available to FGIS

for implementing a new test or quality factor.

The agency operates under two authorities—

USGSA and the Agricultural Marketing Act

(AMA)–and new tests can be implemented under either one (figure 8-l).

Three methods for implementing tests are

available under USGSA. The category “official

criteria” is used for tests provided only at the

request of buyer or seller. Factors contained

in the category of “standards” must be determined for each inspection. However, nongrade-determining factors are always reported

but have no maximum or minimum associated

with assigning a numerical grade, whereas

grade-determining factors establish a numerical grade according to the lowest factor approach. Examples of current tests are given in

table 8-4.

The Food and Drug Administration also has

responsibility for grain quality issues as they

relate to health and safety. Under the Federal

Food, Drug and Cosmetic Act (FDCA), grain

is deemed to be adulterated if it bears or contains an added or a naturally occurring poisonous or deleterious substance that may render

it injurious to health. Aflatoxin-contaminated

Figure 8-1.– Alternative Authorities to FGIS for

Implementing New Tests

New test

Grade-determining Non-grade-determining

SOURCE: Office of Technology Assessment, 1988

corn is one example. It was an FDA ruling that

the addition of water to grain to increase its

weight or value was adulteration and subject

to prosecution. FDA also regulates color additives mixed with grain for identification purposes and the adhesives and coatings that may

come in contact with grain transported in railcars and barges,

The FDCA prohibits food products containing whole insects, insect parts, and excreta. Fumigation or treatment of grains already infested

does not make grain legal under the act. Chemical treatment may be used as a preventive to

keep grain from becoming infested, but residues

from these chemicals must not exceed permissible tolerance levels. Grain is illegal if it contains residues of pesticides not authorized or

in excess of safe tolerances set by the Environmental Protection Agency and enforced by

FDA.

The separation of responsibilities between

FGIS, FDA, and other government agencies is

somewhat vague in principle, For example,

grain dust is a health and safety issue covered
Table 8-1.—Wheat Standards

Minimum limits of— Maximum limits of—

Test weight per bushel

Hard Red

Spring All other Damaged kernels Shrunken

wheat or classes Heat- and Wheat or other classesd

White Club and damaged Foreign broken Contrasting

wheat a

subclasses kernels Total b material kernels Defectscclasses Total e

Grade (pounds) (pounds) (percent) (percent) (percent) (percent) (percent) (percent) (percent)

U.S. No. 1 . . . . . . . . 58.0 60.0 0.2 2.0 0.5 3.0 3.0 1.0 3.0

U.S. No. 2. . . . . . . . 57.0 58.0 0.2 4.0 1.0 5.0 5.0 2.0 5.0

U.S. No. 3. . . . . . . . 55.0 56.0 0.5 7.0 2.0 8.0 8.0 3.0 10.0

U.S. No. 4. . . . . . . . 53.0 54.0 1.0 10.0 3.0 12.0 12.0 10.0 10.0

U.S. No. 5. . . . . . . . 50.0 51.0 3.0 15.0 5.0 20.0 20.0 10.0 10.0

U.S. Sample grade:

U.S. Sample grade is wheat that:

a. Does not meet the requirements for the grades U.S. Nos. 1, 2, 3, 4, or 5; or

b. Contains 32 or more insect-damaged kernels per 100 grams of wheat; or

c. Contains 8 or more stones or any number of stones which have an aggregate weight in excess of 0.2 percent of the sample weight, 2 or more

pieces of glass, 3 or more crotalaria seeds (Crotalaria spp.), 2 or more castor beans (Ricinus communis L.), 4 or more particles of an unknown foreign substance(s) or a commonly recognized harmful or toxic substance(s), 2 or more rodent pellets, bird droppings, or equivalent quantity of other

animal filth per 1,000 grams of wheat; or

d. Has a musty, sour, or commercially objectionable foreign odor (except smut or garlic odor); or

e. Is heating or otherwise of distinctly low quality.

~These requirements also apply when Hard Red Spring or White Club wheat predominate in a sample of Mixed wheat.

Includes heatdamaged kernels.

cDefect~ include damaged kernels (total) foreign material, and shrunken and broken kernels. The sum Of these three faCtOrS may not exceed the limit for defects ‘Or each ‘Umerical grade

‘Unclassed wheat of any grade may contain not more than 10.0 percent of wheat of other classes. elncludes contrasting classes’

SOURCE: Federal Grain Inspection Service, U.S. Department of Agriculture, 19SS.
199

Table 8-2.-Corn Standards

Minimum

Maximum limits of—

test weight Damaged kernels Broken corn and

per bushel Heat-damaged Total foreign material

Grade (pounds) kernels (percent) (percent) (percent)

U.S. No. 1 . . . . . . . . . . . . . . . . . . . . 56.0 0.1 3.0 2.0

U.S. No. 2 . . . . . . . . . . . . . . . . . . . . 54.0 0.2 5.0 3.0

U.S. No. 3 . . . . . . . . . . . . . . . . . . . . 52.0 0.5 7.0 4.0

U.S. No. 4 . . . . . . . . . . . . . . . . . . . . 49.0 10.0 5.0

U.S. No. 5 . . . . . . . . . . . . . . . . . . . . 46.0 15.0 7.0

U.S. Sample grade:

U.S. Sample grade is corn that

a. Does not meet the requirements for the grades U.S. Nos. 1, 2, 3, 4, or 5; or

b. Contains 8 or more stones which have an aggregate weight in excess of 0.20 percent of the sample weight, 2 or more

pieces of glass, 3 or more crotalaria seeds (Crotalaria spp.), 2 or more castor beans (Ricinus communis L.), 4 or more

particles of an unknown foreign substance(s) or a commonly recognized harmful or toxic substance(s), 8 or more cockleburs (Xanthium spp.) or similar seeds singly or in combination, or animal filth in excess of 0.20 percent in 1,000 grams; or

c. Has a musty, sour, or commercially objectionable foreign odor; or

d. Is heating or otherwise of distinctly low quality.

SOURCE Federal Grain Inspection Service, U.S. Department of Agriculture, 1988.

Table 8-3.—Soybean Standards

Maximum limits of—

Minimum Damaged kernels

test weight Heat Foreign Soybeans of

per bushel damaged Total material Splits other colors

Grade (pounds) (percent) (percent) (percent) (percent) (percent)

U.S. No. 1 . . . . . . . . . . 56.0 0.2 2.0 1.0 10.0 1.0

U.S. No. 2 . . . . . . . . . . 54.0 0.5 3.0 2.0 20.0 2.0

U.S. No. 3a. . . . . . . . . . 52.0 1.0 5.0 3.0 30.0 5.0

U.S. No. 4b . . . . . . . . . 49.0 3.0 8.0 5.0 40.0 10.0

U.S. Sample grade:

U.S. Sample grade is soybeans that:

a. Do not meet the requirements for U.S. No. 1, 2, 3, 4; or

b. Contain 8 or more stones which have an aggregate weight in excess of 0.2 percent of the sample weight, 2 or more pieces

of glass, 3 or more crotalaria seeds (Crotalaria spp.), 2 or more castor beans (Ricinus communis L.) 4 or more particles

of an unknown foreign substance(s) or a commonly recognized harmful or toxic substance(s) 10 or more rodent pellets,

bird droppings, or equivalent quantity of other animal filth per 1,000 grams of soybeans; or

c. Have a musty, sour, or commercially objectionable foreign odor (except garlic odor); or

d. Are heating or otherwise of distinctly low quality.

‘Soybeans that are purple mottled or stained are graded not higher than U.S. No. 3.

!Soybeans that are materially weathered are graded not higher than U.S. No. 4.

SOURCE: Federal Grain InspectIon Service, U.S. Department of Agriculture, 1988.

Table 8-4.—Examples of Quality Measures

Under USGSA and AMA

Authority Example factors

USGSA:

Grade-determining standards . . Foreign material

Damage

Test weight

Non-grade standards. . . . . . . . . . Moisture

Official criteria. . . . . . . . . . . . . . . Protein in wheat

AMA:

Official criteria. . . . . . . . . . . . . . . Aflatoxin

Falling number

Pesticide residue (EDB)

SOURCE: Office of Technology Assessment, 1989.

by the Occupational Safety and Health Administration (OSHA) but prohibiting its reintroduction into grain falls to FGIS. A Memorandum

of Understanding between FGIS and FDA has

enabled the two agencies to work together in

several areas. FDA has established action limits

for many factors, such as aflatoxin in corn and

pesticide residues in grain. The agreement between agencies requires that FGIS report to

FDA whenever inspection results for the items

identified in the agreement exceed FDA’s

limits.
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EVALUATION OF GRAIN STANDARDS

Recent debates over grain standards, foreign

buyers’ complaints, and the numerous proposals for regulatory and legislative changes echo

earlier calls for change. Recent complaints concerning certificate final contracts, excess foreign material at destination, spoilage, and heating during transit are nearly identical to those

of the late 1800s. (Certificate final in the export/import contract means that grade is determined at the point of loading and the buyer

has no legal recourse regardless of delivered

quality, unless it can be proved the origin grade

was incorrect at the time of loading.)

These problems have been documented repeatedly in congressional hearings in 1908,

1928, 1975, and 1986 (3). Even the wording is

almost identical, despite a span of some 75

years. The Senate Report 988, of July 27, 1912,

criticized the current system for rewarding

adulteration:

Under the present conditions an enormous

system of mixing or adulteration of grain is

forced on all the home markets and also the foreign market, destroying all confidence in our

grades and working to the detriment of the

grain trade.

In 1986, Representative Byron Dorgan (D-ND)

used similar phrases:

In short, the U.S. system being what it is allows and encourages dockage to be added back

into wheat shipments . . . unless we confront

this problem, we will further erode our export

potential,

Historical Review

The legislation establishing Federal grain

standards was passed in 1916 following more

than 50 years of debate and repeated attempts

by the grain industry, trade associations, and

boards of trade to establish private and regional

measures of grain quality. Private firms can increase profits by individually differentiating

quality from that of other firms. As noted

earlier, this self-interest blocked every attempt

at obtaining voluntary adoption of uniform

standards even though the trade associations

recognized that the industry as a whole would

benefit.

After many years of educational efforts and

attempts to obtain support, the National Grain

and Feed Dealers Association agreed to endorse

a compromise bill for Federal standards. The

compromise garnered reluctant support from

the two opposing positions of voluntary adoption of inspection and grain standards versus

full Federal control. The compromise allowed

Federal supervision of uniform standards and

inspection by private firms, many of which

were already in business in 1916.

More than 150 bills and amendments have

been submitted to Congress since Senator Paddock first proposed Federal legislation in 1890

to establish measures of quality that would be

uniformly and objectively applied. Yet the basic

premises and procedures of the Grain Standards Act of 1916 remained intact until 1986.

Further, the complaints and persistent problems regarding quality have continued for over

a century despite all the legislative, administrative, academic, and industry efforts spent

on improving quality measurement. Several obstacles to a permanent solution must be recognized and dealt with if current efforts of Congress and industry are to succeed:

●

●

●

The changing nature of the industry in

terms of technology and genetics results

in quality characteristics that change from

one crop year to the next and from one part

of the country to the next. All these diverse

qualities enter the marketing channels and

must be handled.

Industry and government have often refused to accept that problems exist. Faith

in the infallibility of a market system has

made it difficult to accept that government

agencies have a function in setting uniform

grain standards in order to facilitate an efficient market.

Most of the participants in the debate have

seen themselves as adversaries since the

beginning of the discussions. Each group–

farmers, processors, grain merchandisers,
201

and government—has expended considerable public effort trying to blame one or

more of the other groups.

The USGSA and the regulatory agencies

implementing the act have focused on one

objective— “to facilitate marketing.” Economic principles have not been incorporated into the grade factors, factor limits,

or the many seemingly arbitrary changes.

Objectives of Grain Standards

Since the beginning of Federal regulation in

1916, the official purpose has been to provide

uniform standards for promoting and protecting grain moving in interstate and foreign

commerce “so that grain can be marketed in

an orderly and timely manner and that trading

in grain maybe facilitated. ” It has seldom been

recognized that the lack of an economic justification in that directive has caused much of the

difficulty in arriving at a consensus on grain

standards and standardization within the grain

industry. Although early researchers frequently

referred to “intrinsic value” and “value in end

use,” these criteria were seldom in evidence

when developing standards, or in the numerous changes that were introduced in subsequent

years.

Much of the disagreement over specific

changes is the result of explicit or implicit disagreement over the objectives of standards.

Each group held a different view. Many in industry and government viewed standards as a

convenience for merchandisers. Processors

wanted the standards to indicate yield of processed products. Farmers wanted assurance that

discounts associated with grade factors were

based on differences in real value in use. Congress often viewed the standards as a cause of

foreign complaints and lost export markets.

Clearly, if grain exporters, grain processors,

Congress, and farmers hold divergent views on

what grain standards are intended to accomplish, they cannot be expected to agree on

which grade factors would meet their diverse

and conflicting purposes.

The lack of clear goals, objectives, and criteria inevitably led to reversals as well as arbitrary inconsistencies. For example, test weight

limits in corn for grades No. 1 and No. 2 were

in the original standards in 1916; were added

to grade Nos. 3, 4, and 5 in 1918; were lowered

in 1934; and were raised in 1959. Throughout

all these changes, researchers questioned

whether test weight was a relevant measure of

value in any grade. Those who argue that the

only objectives of standards is to describe physical and biological characteristics have been unable to find a criterion by which they could

justify the characteristics chosen. For example,

why measure kernel density but not kernel size?

Why measure the percent of split and broken

beans but not the percent of whole kernels in

corn? Grain has many physical and biological

properties, and without additional criteria for

guidance, the factors and factor limits become

arbitrary numbers.

In practice, few markets quote prices for No.

1, 2, and 3 corn, soybeans, or wheat. In nearly

all cases, a base price is given for one grade

and discounts or premiums attached to deviations on each factor from that base. At the country elevator level, for example, nearly all corn

is purchased on a No. 2 base and farmers’ prices

are established by discounting each factor that

falls outside of the No. 2 limits. International

markets generally specify No. 2 soybeans or No.

3 corn, and prices in the contract are usually

quoted for that one grade with adjustments for

deviations.

A set of clearly stated objectives for standards based on sound economic principles was

absent in legislative and administrative changes

between 1916 and 1986. The many changes during that period did little to resolve the basic

problems and issues. In 1986 a relatively simple change in the language of the USGSA opened

the door to a new era in the identification of

quality as a means of efficient communication

of information about value.

In June 1986, the North American Export

Grain Association submitted a report emanating from a series of industrywide workshops.

This report, entitled “Commitment to Quality,”

presented a consensus to serve as guidelines

for Congress and FGIS in revising standards
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(6). One of its most important aspects was a new

definition for the objectives of grain standards.

The four objectives were identified as:

1. to define uniform and accepted descriptive terms to facilitate trade,

2. to provide information to aid in determining grain storability,

3. to offer end-users the best possible information from which to determine end product yield and quality, and

4. to create the tools for the market to establish incentives for quality improvement.

These objectives were incorporated in the

1986 Grain Quality Improvement Act with the

passage of Public Law 99-641 on November 10,

1986. FGIS for the first time had a set of criteria on which to base changes in standards and

to evaluate the numerous proposals for change.

Each criterion provides a basis for assessing

current standards and the recent efforts by

FGIS to improve measurements of quality.

Facilitating Trade

Almost any set of factors can meet this criteria. It is important that grain be grouped into

a relatively few number of categories to make

buying, selling, and classification efficient and

inexpensive. Trade is facilitated by having a

small number of grades determined by a minimum number of factors. From the standpoint

of trading simplicity, three numerical grades

in the corn standards may in fact be more

desirable than five.

The factors in the current grades are for the

most part easily measured and provide a basis

on which buyers and sellers can communicate

price and appropriate discounts. Some have the

additional advantage of being commonly used

in international trade and thereby serve to facilitate communication within the international

as well as domestic market,

Since almost any set of factors and grade

limits can be handled equally well by the grain

industry as long as they are universally accepted, recent FGIS changes have made little

improvement on this criterion.

The technology and terminology for measuring current factors have been in use for

enough time to make the trading of grain on

these factors and grades limits extremely efficient. Domestic and international contracts

have been written using this terminology for

many years. Trading in the marketplace is readily handled with a minimum of specification.

These terms are adequate for basic contracts

and quotes in the futures market as well as in

international trade. Basing price on the numerical grade, millions of bushels change ownership with a simple phone call.

Aid in Determining Grain Storability

The factors that influence storability of grain

have been well documented by many scientists,

dating as far back as the grain storage studies

done in the early 1900s by Dr. Duvel of USDA.

These factors are moisture, temperature, air

flow, mold, and insect infestation. The more

technical attributes of these characteristics are

covered elsewhere in this assessment. The

length of time grain has been held in storage

and the condition under which it has been

stored are also important criteria.

Current tests for factors contained in standards provide little information on direct measures of storability. Moisture content is provided

in terms of averages, but it has been demonstrated that the range of moisture among individual kernels may be more important than the

average. The standards identify damage, but

this is an arbitrary determination of a stage of

development and storage deterioration that

does not provide information on how much

longer the grain may be stored before it goes

out of condition. Numerical grades alone certainly provide no information on storability.

Foreign material, test weight, damage, and

moisture are thus indirect indicators at best

even though they are reported on every inspection certificate.

Changes in inspection practices and standards have done little to improve measurement

of storability since the 1920s, when Dr. Duvel

suggested acidity as a measure of storage life
203

and an indication of mixtures of old and new

crop grain. The 1986 changes in the interpretive

line slides used to identify damage in soybeans

did not improve the ability of the standards to

predict storability. However, the correlation between damaged kernels and levels of free fatty

acid better equipped standards to indicate oil

quality.

Most current measures for storage life are

based on laboratory procedures. No rapid commercial test is available to provide a quick indication of the stage of deterioration or the time

remaining before grain’s condition worsens.

Measuring Value in Processing

Products

Because most grains are used for more than

one purpose, it is not a simple matter to identify the characteristics that influence value (see

ch. 4). The nutritional composition, starch content, and recovery rate of corn and baking characteristics of wheat are all end-use properties

desired by processors. Few of these, however,

can be converted directly to measures of physical or intrinsic properties of the raw grain. Research in recent years has identified some factors that relate to value that can be measured

in the commercial market channel. For example, hard endosperm corn provides a higher

yield of flaking grits. Obviously, high oil and

high protein soybeans provide higher yields of

oil and soybean meal. Breakage susceptibility

tests identify the ability of corn to withstand

handling without increasing breakage. Many

tests—such as falling number, farinograph,

hardness, and baking tests–are available that

indicate baking and milling characteristics of

wheat and are frequently used in laboratories

in the United States and Europe. But the industry does not completely agree that these attributes always clearly indicate value.

Factors currently contained in the standards

do a poor job of meeting the criterion of enduse value. Soybean standards include little indication concerning oil and protein content.

New varieties of wheat have diminished the effectiveness of class and grade for evaluating

flour and baking characteristics. Information

from corn standard factors is often unrelated

to its feeding value or starch yield. In general,

those characteristics of raw grain most closely

associated with value of products derived are

not currently covered by the standards. Purity

and cleanliness in terms of foreign material,

numbers of insects, or other grains provide one

of the few indications of value in the current

standards. Even here, however, there is lack

of clarity; the term “foreign material” means

different things in each grain, and the term

“broken corn and foreign material” (BCFM)

does not differentiate between broken corn and

foreign material despite the difference in value.

FGIS in the last few years has moved toward

improving the measurement of end-use value.

For example, even the simple step of rounding

dockage percentage to the nearest one-tenth in

wheat gives a better indication of the amount

of grain versus nongrain being purchased. Compared with the previous method of rounding

down to the nearest half-percent, the new approach better reflects true value. FGIS has also

taken steps to differentiate more critically on

damage in soybeans. The change in the interpretive line slides has been linked to the level

of free fatty acid, which is in turn a direct measure of the quality of oil derived from the soybeans. Progress is therefore being made toward

finding better measures of value.

Additional measures are available that have

not been incorporated in the standards. There

is a lack of total industry agreement that these

measures are sufficiently accurate and reliable to be introduced. Continued commercialization of measures of breakage susceptibility

in corn and soybeans; intrinsic properties of

corn, soybeans, and wheat; new measures of

baking properties and classification of wheat

varieties; and rapid measures of oil and protein in soybeans are all candidates for inclusion in the standards or should at least be made

available as information.

Providing Market Incentives

Measurement of factors that result in price

differentials in the market provide an incentive for each point in the market channel to
204

make decisions to improve quality and avoid

discounts. This incentive works back through

the market channel to producers, who may

change harvesting, drying, and storing practices (see ch. 7) or may select different varieties (see ch. 6). Preference for varieties with certain quality characteristics will be conveyed to

plant breeders who will in turn generate better varieties. In a competitive market, profit is

a strong driving force in any company’s decisions, whether they be exporters, individual elevator managers, producers, or plant breeders.

While the market itself sets incentives in terms

of prices and price differentials, the standards

are not neutral in this scenario. For example,

farmers have an incentive to select corn varieties that weigh at least 54 pounds per bushel

in order to avoid discounts in the market. This

producer incentive translates into incentives

for plant breeders, who have spent significant

research funds to develop varieties that will

produce a high test-weight corn under normal

conditions.

Current grain standards provide incentives

in several ways. For example, the allowance

of 3-percent BCFM in No. 2 corn, in conjunction with the market practice of paying top price

for No. 2 corn, gives farmers an incentive to

incorporate 3 percent BCFM in their deliveries. By the same token, elevator managers have

an incentive to clean or blend in such a way

as to deliver 3 percent BCFM throughout the

market channel. Any shipment containing less

than 3 percent BCFM is a lost profit opportunity. Shipments containing more than 3 percent BCFM will usually receive a discount. The

step functions between the grades create incentives for blending when grain is purchased on

grade alone. The wider the range between

grades, the greater the number of factors, and

the greater the number of grades, the greater

is the opportunity for blending when purchasing on grade without specifying factor limits.

The other side of this coin is the lack of incentive for improving quality on those characteristics omitted from the standards. With no

price differential for soybeans with high oil and

protein, farmers have no incentive to select varieties that will represent greater value to the

processor. Yield becomes the primary and in

most cases the only criterion on which to select

the variety to be planted, A second example is

the drying temperature of corn. Although most

corn processors object to the use of high temperatures during drying, the market does not

differentiate between corn dried at high and

low temperatures. The premiums paid by a few

dry millers for low-temperature-dried corn indicate that farmers do respond to these incentives when offered. At present the incentives

are not offered by means of the standards, but

by means of contracts in localized areas. It is

especially difficult for buyers some distance

from the production point to obtain qualities

they desire when those qualities are not incorporated in uniform standards and terminology.

Recent FGIS efforts have had limited effect

upon incentives within the market channel. The

removal of moisture as a grading factor reduced

the number of factors on which blending was

required when purchasing on grade only, but

the market still generates income from blending wet and dry corn. The change in rounding

procedures for dockage percentages in wheat

removed the incentive to blend dockage just below the next higher break point. However, the

number of grades and the steps between grades

have not been significantly altered, and incentives and disincentives still fall short of the

ideal.

Measurement and sampling technology or

testing is a problem in terms of incentives only

so far as the accuracy of the equipment will

not accommodate a finer distinction between

qualities on certain characteristics. Increased

accuracy will permit narrowing the spread between numerical grades, thereby reducing the

incentives for blending when purchasing on

grade only.

integrating the Four Objectives

Changes in grade-determining factors, or factor limits, should meet the four objectives of

grain standards. But, not all alternatives will

contribute to all four objectives, and it is likely

that conflict between the objectives will develop. For example, complex and lengthy tests
205

for measuring end-use value will slow the inspection process, increase marketing costs, and

thereby detract from the purpose “to facilitate

trade. ” Similarly, incentives are best created

by a continuous discount schedule on each factor, starting from zero. But a zero base requires

each buyer to specify factor levels in the contract. Numerous contract specifications increase the number of segregated lots and reduces the interchangeability of shipments,

Increasing the amount of information available

to users increases the difficulty of merchandising uniform lots.

The “perfect standard” that optimizes all four

objectives may not exist. The final solution will

be a compromise among some of the objectives

(e.g., sacrificing complete information for all

users in order to facilitate orderly efficient marketing) and among various buyers and sellers.

Alternatives to the Present System

An evaluation of the alternatives to the current system in the United States illustrates some

of the trade-offs inevitable in establishing grain

standards. The system today is generally known

as “numerical grades determined by the lowest

factor.”

The “lowest factor” approach requires that

the grade be set by the factor representing the

lowest quality. For example, if the test weight

of corn is 53 pounds per bushel, that sample

is graded No. 3 even though all other factors

are equal to No. 2 or better. This method has

the advantage of simplicity and is used by many

of the major grain-exporting countries. However, it does not always reflect true value since

it fails to consider factors above the minimum.

Considerable variation in quality can occur between shipments without a grade change. The

lowest factor system also encourages blending

to bring all factors down to the quality of the

lowest factor determining the grade, and therefore does not generate incentives for quality improvement unless limits are established by contract that are more restrictive than the grade

limit.

In export trade, most contracts specify that

the grade determined at origin is the legal basis for any dispute or arbitration regarding quality. This certificate final system, which was in

use prior to the USGSA, provides advantages

in terms of efficiency and costs. Other alternatives are currently used in other countries (see

ch. 10 and companion report) and variations

of the official U.S. system are being used even

in the domestic market. Understanding the

basics of each alternative can help develop policy for directing future quality regulations,

Total Defects

Under the lowest factor approach, all factors

can be at the maximum limit for the determination of a particular grade, For example, No.

2 corn can have 54 pounds test weight, 3 percent BCFM, 4 percent damage, and 0.2 percent

heat damage. This provides the opportunity to

blend on one or more factors to achieve the

maximum allowable limit within that grade. A

system of “total defects” introduces one more

limiting factor that sums the defects in that

grade across all factors and places a maximum

that would be more restrictive. Thus the accumulated value of the defects would become

more restrictive than the individual factors, In

the example just given, the defects are BCFM,

total damage, and heat damage, Under the total defects system, a maximum value of 6 percent might be established, for example, and the

corn would be considered No. 3 if the sum of

damage, heat damage, and BCFM exceeded 6

percent. Currently, the wheat standard includes

a total defects factor with a maximum limit of

3 percent for No. 1. If shrunken and broken kernels, for instance, are at the maximum No. 1

limit, which is 3 percent, all other defects would

have to be at O. This approach provides additional information about quality and an incentive to increase quality if the total defects figure is more restrictive.

The total defects approach differs from the

lowest factor only by accumulating the sum of

individual factor results. The greater restriction it entails could also be achieved by changing limits on the present grade factors. Total

defects also contains a logical inconsistency:

It establishes limits on three factors for No. 2

wheat but if the sample meets all these criteria,
it will be classed as No. 4 on the basis of total

defects.

Absence of Imperfections

The “total perfect kernels” approach also

sums the percent of defects, but subtracts the

total from 100 to obtain the percent of perfect

kernels. Each grade has a minimum limit on

percent of perfect kernels. Corn grades in China

are based on this system, and U.S. standards

for oats include a factor for “sound oats.” This

system differs little from the “total defects” concept except that it reports absence rather than

presence of defects.

Weighted Factor

The “weighted factor” approach would include a set of grade-determining factors and

factor limits, but each factor would exert a

different effect in terms of grade determination.

This is in contrast to the lowest factor approach,

in which the grade is lowered when any one

factor result exceeds the limit. Instead, defects

would be divided into major and minor categories and each assigned a weight to be multiplied times the percent of that defect present.

The sum of the defects times the weighting factor would determine the grade. Grade would

be influenced by the number of factors below

grade, the distance each of those factors fell

below the grade limit, and the relative seriousness of the defect.

This system would incorporate more information in the numerical grade and allow finer

distinction among the combinations of factors.

Its disadvantage is its complexity, the arbitrariness of the weighting factor assigned to each

defect, and the lack of clear criteria on which

to set the break points between grades. In order for the numerical grade to indicate end-use

value, the weighting factors would have to differ among uses. The complexity of such a system would probably eliminate this alternative

on the criteria of the first objective of standards—” to facilitate trade,”

Contract Specifications

The issue of whether standards are required

or whether each buyer may simply specify

terms in their contract has been debated since

the idea of numerical grades was first presented

to merchandisers in the late 1800s. So long as

contracts are legally enforced, buyers and

sellers may agree to any set of factors, characteristics, and conditions of shipment they desire. The advantage of numerical grades over

contract specifications is that they facilitate

communication. When the grain trade became

too large for buyers and sellers to physically

and simultaneously view the grain being sold,

terminology was required that would permit

description by factors. The numerical grade

was chosen as a way of describing several factors in one number. Each buyer could identify

the characteristics and factor limits that best

meet the conditions in a particular plant. If the

buyer’s needs are unique, however, resale in

the market becomes difficult and segregation

is required for each one’s specifications. The

efficiency of the current marketing system relies heavily on uniformity for the majority of

the crop being marketed.

Although most foreign buyers now use numerical grades for purchasing corn, soybeans,

and wheat, they almost always include additional factors besides the numerical grade in

their contracts. Numerical grade alone seldom

conveys sufficient information to satisfy a

buyer’s needs. Other factors are therefore specified. It is a small step to go to an entire factor

basis system and eliminate numerical grades.

The primary disadvantages are a much wider

range of quality characteristics between vessels and thus difficulty in resale if other buyers

do not want the same specifications, greater

difficulty in segregation and blending to a wider

range of specifications, and increased complexity in writing contracts.

None of these disadvantages is insurmountable. The problem of reselling uniform lots has

become much less important in recent years.
207

The number of times a vessel is resold after leaving port has fallen compared to the 1970s scenario. The complexity of identification is also

less daunting since most buyers are already

specifying grade plus two or three factors; they

would be specifying only one or two more.

There would be greater problems in keeping

qualities segregated throughout the market

channel if there were no numerical grades.

One of the purposes of blending is to achieve

a uniform product, and the first objective of

standards is to facilitate merchandising. This

purpose is not accommodated by a system

where all buyers develop their own set of quality factors, their own definitions, and their own

limits. The complexity and inefficiencies of

such a market would result in a major reduction in welfare for both buyers and sellers

throughout the market chain. Numerical grades

therefore are a means of creating uniformity

of quality in the market channel. They are most

useful if they reflect the needs of the majority

of buyers in the market so that additional contract quality specifications are the exception

rather than rule.

Fair Average Quality

The contract for fair average quality (FAQ)

specifies that the grain shall be equal to the average quality of grain exported or imported at a

specific location. The most common FAQ contract in previous years has been the GAFTA

(Grain and Feed Trade Association) of London,

which specifies that quality delivered will be

equal to the average of the quality from the

country of export to the importing country for

the month in which the delivery was made.

Samples are taken from each vessel and stored

by GAFTA in their London laboratories. A composite sample at the end of each month is created as the standard, and shippers who think

that the quality of their shipments did not meet

FAQ submit samples to be judged against the

GAFTA standard. Arbitration decisions are

based primarily on visual inspection by an arbitration committee. Most GAFTA FAQ contracts

are based on delivered quality. The standard

varies between months, countries of origin, and

crop years. The quality characteristics are few

in number and consist primarily of visual observation.

The advantage of FAQ is its simplicity and

its flexibility for adapting to changing crop

years. This advantage to the seller is, of course,

a disadvantage to the buyer. The contract does

not cover all factors on which buyers might like

information, and the floating standard leaves

the buyer uncertain as to what quality may be

received for processing. It is often a destination contract (advantage to buyers, disadvantage to sellers) and covers factors not likely to

change in transit. Since half the vessels are

mathematically below the FAQ standard, it is

conceivable that many contracts would require

court arbitration. In fact, the system is manageable because FAQ factors and sampling

methods are not sufficiently specific to support

arbitration action except in cases of extreme

deviation from the standard.

The FAQ system provides no incentive for

improving quality since it only describes whatever quality is produced. The extent to which

the FAQ system describes value to users depends on the factors included. In the case of

the GAFTA corn contracts, the factors describe

primarily condition of the grain rather than intrinsic value characteristics. Some of the soybean contracts include oil and protein. The simplicity of FAQ facilitates trade but the potential

for disputes and arbitration can reduce marketing efficiency.

Variations on the FAQ system include contracts that specify origin instead of destination.

Canada and Australia have sometimes generated a fair average quality based on harvested

quality for that crop. The FAQ standard is usually established with respect to selected characteristics of special importance.

In recent years the FAQ contract has been

less frequently used. Argentina, South Africa,

and Brazil all report exporting primarily on nu-
208

merical grades. However, European buyers

have reported continued use of destination

FAQ on soybeans.

Destination Grades v. Certificate Final

Most contracts originating in the United

States specify that grade is final at origin. This

means that the grade certificate, issued immediately after the vessel is loaded, is the final document on quality and the buyer has no recourse

beyond proving incorrect inspection on the origin samples. Foreign buyers must prove that

the vessels were improperly loaded or inspected

at origin before they can claim restitution for

quality. Grain received in poor condition, badly

broken, spoiled, sprouted, or insect-infested is

not sufficient evidence on which to base claims

for damage because the contract specifies origin certificate final.

Certificate final is a highly efficient marketing technique, and enables minimum cost quality guarantees up to the point where the exporter transfers responsibility for quality to the

captain of the vessel or to the importer. It has

the disadvantage of the ultimate customers’ dissatisfaction with the delivered quality and their

inability to control quality when several handlers stand between shipper and user. It also

enables the shipper to load closer to the quality limits without regard to the inevitable consequences of placing that quality in the vessel.

The alternative is destination grades (often

in conjunction with a cargo, insurance, and

freight sale). In this case, the seller guarantees

delivery to the foreign port and guarantees quality at that destination. This alternative has often

been suggested as a solution to the problem of

foreign complaints. But many unanswered

questions remain about such contracts. For example, who will take the destination samples

and how? Second, what type of guarantee can

shippers make for a vessel that will be distributed among 10, 20, or even 50 different buyers,

each one getting only a small portion from a

vessel with a highly variable quality among

holds? Third, since the buyer specifies the quality characteristics and frequently requests a

moisture content unsafe for long voyages

through warm water, how can shippers guarantee quality at destination?

The buyer has always had the alternative of

using a contract that specifies destination quality. Few shippers are willing to take that type

of risk at a price the buyer would be willing

to pay. With no control over unloading or sampling, shippers are in a poor position to guarantee destination quality and the number of

contracts taken into arbitration court would undoubtedly rise dramatically, resulting in a significant increase in cost and delays in settlement.

Origin and destination contracts can be used

to guarantee quality under any set of standards.

Yet, the two systems incorporate different incentives. Destination guarantees place additional responsibility, and thus economic incentives, on the exporter to load grain that will

maintain quality during transit as well as meet

the contract at time of loading. This alters the

loading strategy. Under origin grades, for example, a 14. O-percent moisture contract could

be met by blending 8 and 16 percent moisture

corn. Under destination quality guarantees, this

blending would not be a good strategy under

most time and temperature conditions. The

high-moisture corn would probably result in

damage levels and spoilage at destination exceeding the contract limit.

The issue of origin and destination grades

must also be considered in the context of domestic markets. The same issues exist as in the

export market, but the results are different for

two

1.

2.

reasons:

the time between origin and destination is

usually much shorter in the domestic market; and

sampling and inspection procedures at origin and destination are subject to a single

set of regulations in the domestic market,

whereas FGIS has no control over sampling and grading at foreign destinations.

Domestic contracts specify origin or destination grades as well as whether settlement will

be based on official or private inspection results. Confidence in accuracy is developed with
209

a large number of transactions over a period

of time and by the option of calling for FGIS

inspection and an appeal if needed. This confidence often results in acceptance of non-FGIS

origin inspection where direct contact between

buyer and seller has generated mutual trust.

Trade rules and arbitration procedures established by the National Grain and Feed Association also provide an important alternative

and supplement for domestic trade.

Dual Grades

A dual grading system could be based on separating domestic and foreign markets or separating use, Separate export standards have often

been suggested as a way to compete in international trade with more restrictive quality

specifications. The Canadian system establishes

separate grade requirements for export wheat

and controls purchases, movement, and cleaning procedures between country elevators and

the ports to administer this system (see companion report). Separate food grades and feed

grades have also been suggested for corn and

wheat. Food grades would be more restrictive,

especially with respect to sanitary quality factors, and could include more information on

value in processing.

Separate standards for different users could

provide more information on value. The food

grade or export grade could have price differentials that would generate market incentives for

improved quality. The market would direct the

higher qualities into the higher valued uses. The

dual system would create a more complex marketing system and would probably increase the

cost of segregation and transport. Probably the

greatest difficulty would be determining which

standard and discount to apply to the producer.

Since ultimate use would not be determined

at the time of farmer delivery and, in fact, intended use might be changed more than once

in the market channel, the higher discounts on

food grade or export grade would have to be

applied against the producer. This would generate incentives for quality improvement on all

grain at a cost that would not be justified for

feed use in domestic markets. Dual standards

would thus not facilitate an efficient market.

APPLYING ECONOMIC CRITERIA

As the four objectives of grain standards

specified in the 1986 Grain Quality Improvement Act do not lead directly to a system of

grades and standards, an intermediate set of

guidelines is required to:

● Define uniform and accepted descriptive

terms to facilitate trade.

This requires a small number of categories established by clearly defined factors.

The factors must be readily measured in ●

commercial trade and objectively determined by technology that gives repeatable

results at each point in the market channel. The factors must be acceptable to and

used by most participants in the market.

Trade is also facilitated by stability and absence of change, since any change results

in uncertainty and adjustment.

● Provide information to aid in determining

grain storability.

TO GRAIN STANDARDS

This purpose would be met by tests that

reflect storage history as well as predicting remaining storage life. Information on

infestation by molds, fungi, and insects

needs to be accompanied by the extent of

the development and deterioration. Kind

of infestation is also an important measure of storability as a guide to actions required to inhibit further deterioration.

Offer end-users the best possible information from which to determine end-product

yield and quality.

The characteristics of raw grain that indicate the quality and quantity of processed

products differ with different industries.

Factors selected for inclusion in standards

should either be common to several industries or be important to an industry consuming a significant portion of the crop.

The more directly the factor measures the
210

desired end product, the more efficiently

will the standards reflect value.

Create tools for the market to establish incentives for quality improvement.

Incentives in standards are created in

part by including factors that are economically important. To provide the market the

maximum opportunity to establish price

incentives the standards should: 1) minimize the distance between factor limits for

each numerical grade; 2) report all values

as accurately as measurement technology

allows, using standard mathematical procedures for rounding to the nearest significant digit; and 3) convey important economic information to producers that will

enable them to respond to producer preferences related to value. -

Grade-Determining,

Non-Grade Determining, and

The factors selected as indicators of value

may be included as grade-determining factors,

as non-grade-determining factors, or as official

criteria. As described earlier in this chapter,

grade-determining factors set numerical grade

according to the factor limits established. Nongrade-determining factors contained in the

standards do not influence grade but must be

reported as information whenever an official

inspection is made. Factors defined as official

criteria are measured and reported only when

requested.

Assigning each factor to one of the three categories requires a guideline that can be used

objectively. As noted previously, standards

should serve the needs of a majority of users

and should reflect value for those uses. This

suggests that grade-determining factors should

be those that relate to sanitary quality, purity,

and soundness (absence of imperfections). Using this guideline, the grade would be based

on factors such as impurities, foreign material,

total damage, and heat damage. The lower the

values of any of these defects, the greater is the

value of the product. Non-grade-determining

factors would be those related to properties

such as broken kernels, moisture, oil and protein content, and other intrinsic characteristics or physical properties that influence value

for the major processing uses. Higher or lower

percentages for these do not necessarily mean

higher end-use value over the entire range. For

example, the required level of protein in wheat

depends on the ultimate product to be made

from the flour. Lower moisture content means

more dry matter per pound, but 5 percent moisture corn is not generally of greater value than

12 percent because of the effects of overdrying. Usually some optimum value is indicated

for each of these factors, but the optimum varies

with the use and location in the market channel.

Under Section 4 of the USGSA, factors contained in the standards must be measured during any official inspection. Those considered

official criteria are measured upon request. Although the advisability of that particular part

of the law is a matter of debate, in its present

form it leads to the conclusion that characteristics most important to the largest number of

users would be incorporated into the standards.

Those of lesser importance, or important to only

a few users, would be considered official criteria available upon request to buyers who need

them. Thus moisture and basic intrinsic properties—such as protein content, kernel hardness, and falling number tests in wheat; protein and oil in soybeans; and starch in

corn—might be incorporated as non-gradedetermining factors. Breakage susceptibility

and kernel hardness in corn and kernel size in

soybeans are examples of factors to be made

available under official criteria.

The advantage of putting the major factors

in as non-grade-determining factors rather than

official criteria is that the characteristics would

move into the market channel much more readily. Obligatory measurement throughout the

market would spread the cost across the entire

industry. The cost per unit would be insignificant and therefore the information would be

readily available as an incentive. A characteristic that must be specified by a separate request from each individual buyer would increase the cost of information. For example,

the true value of information on test weight is
211

irrelevant under the present system since everyone is required to measure test weight. The marginal cost to the buyer for that information is

nearly zero. In contrast, if only one buyer specifies oil content in a soybean contractor falling

number in a wheat contract, the cost of information would be much greater because the cost

of measurement throughout the market channel would be borne by the single buyer and

would be spread over only the bushels that

buyer purchased.

Objective criterion based on the four purposes of standards has thus provided a basis

for choosing factors and for dividing them

among grade-determining, non-grade-determining, and official criteria.

Establishing Grade Limits

As noted earlier, the grade limit on various

factors is an automatic incentive throughout

the market channel to add materials or to blend

to reach that limit. Blending damaged soybeans

with good ones does not increase the value of

the damaged soybeans, but it does increase their

price, for they may now be sold as a higher

grade. The criterion of providing incentives for

improving quality dictates that the base be set

at zero. The overall objective of a standard is

“to describe the value of the lot of grain being

sold. ” If the percent of damaged kernels can

change from 5.0 to 6.9 percent without changing grade, then numerical grade alone does not

provide complete information on differences

in value. Current soybean standards allow 1.0

percent foreign material and no discount is applied by the market, implying that any level between O and 1.0 percent represents equal value.

The first 0.5 percent of foreign material in a

shipment of soybeans has no more real value

than the third 0.5 percent, even though the third

is discounted and the first is not.

Tighter limits on existing grade factor limits

would reduce the incentives for blending and

provide a more accurate measure of value as

long as discounts continue to be applied on the

same grade. However, it is as difficult to justify

an arbitrary limit of 0,5 percent as it is to justify

an arbitrary limit of 1.0 percent. The only objective limit is zero, with market discounts being applied for additional levels within the ability of sampling technology to differentiate.

The base for the non-grade factors is of course

immaterial, since it is not grade determining,

and the market is now free to choose what, if

any, price adjustment is to be made for different levels of those factors.

The zero base concept is limited by the freedom of the market to respond. Unless (or until)

export contracts and prices are established at

zero base, merchandisers could start discounts

at any level they desired, including the current

factor levels for No. 2 corn and for No. 1 wheat

and soybeans.

Number of Grades

The final question in setting standards is the

number of different grades required. The number of numerical grades differs among grains—

malting barley has three, soybeans and sorghum

have four, and corn and wheat have five—and

all grains have a sample grade designation. Historical records provide no rationale for these

numbers and the justification for the different

numbers between standards is not clear. The

fewer the numerical grades, the simpler is the

marketing and the less space required to segregate these grades in storage.

A single grade would force the foreign buyer

to specify the quality characteristics and the

level of those characteristics desired. Buyers

would no longer receive 4 percent BCFM by

default when ordering No. 3 corn. They would

be forced to specify the levels desired and would

know in advance the trade-off with price.

The market seldom uses more than two

grades. More grades increase the complexity

for the market and provide no increase in information. The disadvantage of a single grade

is that nearly every buyer must use one grade

or specify levels on each factor. This would result in increased diversity of contracts, less opportunity to resell uniform lots, and increased

transaction costs. The final number of grades

to be established for each grain must be a compromise between the purposes of providing incentives, identifying value, and facilitating

trade.
212

EVALUATION OF RECENT LEGISLATION

Optimal Grade

The optimal grade concept proposed a single grade, with low values for selected defects

and discounts on any defects above the base.

The object was to reduce the incentive for

blending built into the current standards by

lowering the limits and thereby better meeting

the fourth objective of standards. It used the

principle of grade factors being required to reflect cleanliness, soundness, and purity. It set

low levels for that grade but not at zero. It would

have met the criteria of simplicity, facilitating

trade, and removing incentives for blending.

However, it did not meet the criterion for measuring quality for various uses. Its greatest deficiency was a failure to identify the non-gradedetermining factors that would be incorporated

in the standards. It also failed to eliminate completely the incentive to blend off large quantities of poor quality grain by not setting the base

values at zero. Congressional rejection of the

optimum grade was probably more a reflection

of problems of implementation than of failure

to meet the criteria established by the purposes

of grades.

The Grain Quality Improvement

Act Of 1986

Perhaps the most important contribution of

this legislation was introducing into the USGSA

the four explicit objectives for grain standards,

including three relating to economic value.

Without these objectives, the standards had primarily reflected response to pressure from various groups. Without support from one or more

major associations or organizations, it was extremely difficult to make any changes in the

standards because the only criterion was that

of facilitating trade. As noted, FGIS now has

criteria on which to base changes and can

justify those changes in terms of what is best

for the industry.

Prohibitions v. Market Incentives

Developing solutions to the problems and issues raised by grain standards faces two basic

choices:

1. legislative prohibitions against practices

that are detrimental to quality; and

2. changes in the economic incentives of

standards in pricing practices to allow the

market to discipline offenders.

The first alternative focuses on controlling the

process by which grain is marketed; the second, on accurately evaluating the product and

value of different qualities.

Throughout history numerous bills and

amendments have tried to legislate specifics in

grain standards. Nearly all legislative attempts

have failed. The few successful activities since

the late 1800s have focused on setting policy

and creating a framework for administrators

to implement rather than legislating specifics.

During the 1980s numerous bills or amendments have been submitted to restrict the way

in which foreign material, dockage, or dust can

be handled, particularly in the export markets.

The 1986 Grain Quality Improvement Act included a prohibition against reintroducing dust

or foreign material into the grain stream once

it has been removed. The intent was clear: to

improve the quality of the grain being exported

and especially to improve the U.S. image in international grain markets. The success of this

type of legislation is not yet clear. Yet several

difficulties can be identified in implementing

prohibitions while leaving intact the standard

structure that generated the incentives for

blending when purchasing on grade only.

The prohibition in the 1986 Grain Quality Improvement Act focuses on controlling the process rather than the product. Consequently, its

enforcement has presented numerous problems,

not the least of which is a definition of what
213

constitutes foreign material, which the standards define in many different ways and identify with many different names. For example,

in corn only one factor encompasses all nongrain material: BCFM, which is defined as any

material passing through the 12/64-inch sieve

plus noncom material remaining on top. Wheat

includes a factor for foreign material and one

for shrunken and broken kernels as well as a

category called dockage. Barley standards contain three factors: dockage, foreign material,

and broken kernels. In nearly all cases, foreign

material is defined in conjunction with particle size, meaning materials that got through a

certain size sieve. The sieve size varies among

grains. In almost all cases, not all foreign material is actually removed, and in almost all

cases the foreign material contains small grain

particles that are not “foreign” at all. (For information on problems in defining grain, see

ref. 1.)

Another problem with the prohibition approach is that the quantity of foreign material

or broken kernels incorporated into a grain

shipment is controlled by the contract in conjunction with the grade limit. Therefore, the

prohibition does not prevent leaving dirt, dust,

and foreign material in the grain, nor does it

prevent blending of different lots of grain containing various levels of foreign material to

achieve the maximum allowed. It only limits

the procedure by which the maximum maybe

achieved. In addition, some if not most of the

“foreign material” in overseas processing

plants is broken grain created during unloading of vessels. Consequently, it is unlikely that

the actual amount of “foreign material” delivered to the foreign buyer will change, but it may

be more expensive to attain the contract levels

at the export elevator.

The most basic problem is one of trying to

legislate restrictions to counter the economic

incentives built into the standards themselves.

Having an allowance of 4 percent BCFM in No.

3 corn builds in an automatic incentive to add

that much foreign material to the load when

corn is purchased on the grade alone. Removing that incentive would be more efficient than

a prohibition. If a set of standards can be established that creates incentives to achieve the

desired end product in terms of quality, the

legislative prohibition would become unnecessary.

FINDINGS AND CONCLUSIONS

Continual review of grain standards since

their inception in the 1916 United States Grain

Standards Act has generated numerous changes

and proposals for change in factors and factor

limits. These have not resolved the problems

or foreign complaints related to quality. U.S.

grain standards today:

●

●

●

create incentives for practices not consistent with good management and efficiency;

fail to identify many of the characteristics

related to value in use;

fail to reward producers and handlers for

improved drying, harvesting, handling,

and variety selection; and

● include arbitrary grade limitations on

many factors that do not always reflect real

differences in value, and in some cases are

not consistent with statistical principles.

The many regulatory and legislative standard changes have failed to move the industry

in a consistent direction. In fact, there have

been numerous reversals of previous changes.

What has been lacking is a clearly defined goal

toward which the system is being moved. With

the four objectives for standards now established by legislation, it is possible to develop

for each grain a set of “ideal” standards that

could provide a direction for future changes
214

and a yardstick against which to evaluate alternatives. If each change adopted moves the operational standards closer to the ideal, repeated

reversals should no longer create unnecessary

adjustment costs and confusion in domestic

and foreign markets.

Conflicts between purposes can be explicitly

identified and the trade-offs and economic consequences calculated and recorded as guidance

for a long-range consistent policy. The ideal system should include grade-determining factors,

non-grade-determining factors, and definition

and measurement technology for official

criteria.

Existing research is generally adequate to

identify grade-determining factors—sanitary

quality factors, damage that reduces yield and

quality of processed products or value in use,

and foreign material including dust. For No.

1 grade, these factor limits should be set as close

to zero as measurement technology will allow.

Any value above zero violates the third and

fourth purposes of grades. The exact definition

of these factors, including sieve size for foreign

material, still requires additional research to

evaluate the alternatives against the criterion

of reflecting value accurately.

Non-grade-determining factors should measure value for a majority of users. The preferred

level may differ among uses. For example, splits

in soybean reduce oil quality only in proportion to the time in storage. Thus, domestic processors buying for immediate use may allow high

levels of splits with no discounts. Foreign

buyers, whose processing of the soybeans may

lag harvest by 12 to 18 months, may place much

more restrictive limits and discounts on splits.

Many of the intrinsic and physical properties that influence the quantity and quality of

products derived from the grain have not been

identified. More research may add to the list

of properties to be included. The criteria for

inclusion should be that the cost of obtaining

the information is less than the value of that

information to users who need the information.

By starting with the major products generated

from each grain, a list of physical and intrinsic

properties can be developed that correlates with

value in use. New, rapid objective testing technology is also a requirement prior to inclusion.

The list of factors to be measured under official criteria is almost unlimited except by measurement technology. Any properties that can

be accurately measured can be requested by

buyers and sellers. These would be developed

only after evidence of sufficient demand to

cover the cost. Information on the factors of

interest for the various users could be provided

by private laboratories and would be added to

official criteria only after rapid objective technology is developed and when there is sufficient demand by domestic or foreign buyers

to justify including them.

Standards should be designed to reward positive actions, such as genetic improvement, and

sound harvesting, drying, and marketing practices. They should also be designed to provide

the best information available on the value of

each shipment by descriptive terminology. All

changes must be evaluated against the criterion

of providing information that is worth the cost

of obtaining it. Optimum information, not maximum information, is the goal. Proposals for

change must also be tempered with current capabilities of the industry, the cost of adjustments v. potential benefits, the realities of international trading rules, and the historical

sequence by which the industry has attained

the present situation. Measurement and description of quality is only one part of the problem. Quality must be evaluated in the context

of technology, competition, foreign demand,

and processing requirements.
215

CHAPTER 8 REFERENCES

1. Evans, Cooper, and Livingston, Kristi, Grain

Quality: Positioning Ourselves for the Future,

Iowa Quality Grain Study Final Report, Cedar

Falls, IA, 1987.

2. Hill, Lowell D., “Analysis of the United States

Grain Standards,” background paper prepared

for the Office of Technology Assessment, U.S.

Congress, Washington, DC, 1988,

3. Hill, Lowell D., Grain Grades and Standards: Historical Issues Shaping the Future, submitted to

University of Illinois Press.

4, Hurburgh, Charles R., “Technology for the Inspection of Corn, Soybeans, and Wheat, ” back5.

6.

ground paper prepared

nology Assessment, U.S.

DC, 1988.

for the Office of TechCongress, Washington,

Hurburgh, Charles R., Paynter, L. N., Schmitt,

S. G., and Bern, C. J., “Performance of Farm-Type

Moisture Meters,” Trans. American Society of

Agricultural Engineers 29(4):1118-1123, 1986.

North American Export Grain Association,

“Commitment to Quality,” Washington, DC, June

1986.
Chapter 9

Government Farm Policy

and Economic Incentives

Affecting Quality
CONTENTS

Page

Government Program Effects on Grain Quality . . . . . . . . . . . . . . . . . . . . .. ...219

Loan Rate Program Premiums and Discounts. . . . . . . . . . . . . . . . ... ... ...221

Farm Programs and Variety Selection . .............................,225

Government Storage Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ........228

Impacts of Markets, Farm Programs, and Technology on Quality . ......232

Findings and Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..............233

Chapter preferences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ................234

Figures

Figure Page

9-1. Historical Loan Rate and Market Protein Premium for HRS

15 Percent and HRW 13 Percent, 1965-86 . . . . . . . . . . . . . . . . ..........222

9-2. Producers’ Protein Choice for Wheat . .............................232

Table

9-1.

9-2.

9-3.

9-4.

9-5.

9-6.

9-7.

9-8.

9-9.

9-1o.

9-11.

9-12.

9-13.

Tables

Page

Loan Rates, Target Prices, and Deficiency Payments

for Wheat in the United States, 1974-86 . . . . . . . . . . .................220

Loan Rates and Market Premiums for HRS and HRW, 1965-86 .. ....221

Sedimentation Value Premiums and Discounts Provided

by Loan Rate Program, 1963 and 1964.... . .......................223

Loan Rate Premiums and Discounts on Wheat by Grade . ...........224

Additional Loan Rate Discounts on Wheat for Test Weight... . ......224

Additional Loan Rate Discounts for Damaged Kernels in Wheat. .....225

Market Discounts for HRS, February 1987 . .......................225

Wheat Quality Factors Determining Grade Standards . ..............226

Average Price Adjustments for Each Factor Among North Dakota

Country Elevators, Fall 1984, 1985, and 1986 . . . . . . . . . . . . . . . . .. ....227

Theoretical Revenue feral-AcreFarm in North Dakota, 1965-86 ....228

Theoretical Revenue for a 1-Acre Farm in Kansas, 1965-86..........229

Implied Premium Necessary for HRS Producers To Be Indifferent

About Growing 14 or 15 Percent protein Wheat . ..................229

Implied Premium Necessary for HRW Producers To Be Indifferent

About Growing 11 or 13 Percent Protein Wheat . ..................230
Chapter

Government Farm Policy and

Economic Incentives Affecting Quality

Government farm policy and varying governmental economic incentives to the grain system have a significant influence on grain quality. Government farm programs in particular

play an essential role in providing incentives

to farmers to produce a range of crop quantity

and quality. In commodities such as wheat, soybeans, and corn, where biological trade-offs exist between yield and a major quality factor like

protein, farm programs potentially have important impacts on quality,

Farm programs have played a key role in U.S.

agriculture since at least the mid-1930s (4). The

numerous programs have shifted gradually

from price supports to income supports. The

constraints and incentives they provide are

transmitted throughout the production and

marketing system and consequently may have

an impact on grain quality. Two provisions are

particularly important—the loan rate program

and its associated premiums and discounts for

quality differentials, and the target price program, which results in higher prices associated

with yield. To the extent that yield and quality

are inversely related (see ch. 6), any program

resulting in increased yields also has the potential to reduce quality.

This chapter looks at the impacts of farm programs on grain quality, which have historically

been stronger than they are today. It reviews

farm program legislation with a focus on its

impacts on grain quality, analyzes the extent

of and dynamics in the trade-offs between yield

and quality, and considers potential impacts

of higher prices on incentives to increase yields

and decrease quality.

The analysis focuses on wheat because data

are more easily attained. But the principle can

be applied to any grain in which commercial

premiums and discounts exist for particular

quality characteristics, and in which measurable trade-offs exist in production between yield

and quality. In the two classes of wheat discussed here—Hard Red Spring (HRS), predominantly grown in North Dakota, and Hard Red

Winter (HRW), in which Kansas is the leading

State—premiums and discounts play an important role in the marketing system and yield is

inversely related to protein, an important quality characteristic.

GOVERNMENT PROGRAM EFFECTS ON GRAIN QUALITY

One of the main purposes of government farm Wheat program participation prior to 1964

policies since World War II has been to sup- was mandatory in most years. Acreage alport farm incomes. Several different policies lotments were imposed along with marketing

and programs have been used over time to quotas in 1951 and from 1954 to 1963 (l). The

achieve this goal. Loan rate provisions have allotments were set at the amount of acreage

been in effect in wheat programs since before needed to produce a crop that, together with

the war. The target price/deficiency payment carry-over and imports, would provide a supsystem has been used since 1973; it did not have ply equal to a normal year’s domestic consumpmajor effects until 1977, however, because mar- tion and exports plus an allowance for reserves.

ket prices at first exceeded the loan rate and Marketing quotas were used along with acrein some cases the target price. age allotments as a more stringent means of

219
220

controlling output. When expected supply for

a year exceeded estimated use by a specified

amount, marketing quotas had to be proclaimed

by the Secretary of Agriculture. A quota became

effective by a two-thirds vote of approval by

wheat producers. When marketing quotas were

approved, compliance with acreage allotment

was mandatory; when they were not approved,

the level of price supports was lowered substantially.

Beginning in 1964, farm programs no longer

required mandatory participation and marketing quotas were voted out. From 1964 to 1973,

loan rates were reduced and farm income was

supported by domestic certificate and export

certificate payments in cash, based on a percentage of production on a farmer’s allotted

acres.

In 1973 marketing certificates were replaced

by target price/deficiency payments as a means

of supporting farm income. From 1974 to 1976,

wheat prices increased dramatically and were

higher than loan rates. Hence, government participation in the form of income support to

wheat producers, directly or via prices, was

virtually nonexistent. Implementation of the

target price program did not effectively begin

until 1977 and is still in effect today. The perbushel income support payment (called a deficiency payment) is the difference between the

target price and the average price received by

farmers in the first 5 months of the marketing

year, or between the target price and the loan

rate, whichever is higher. Historical loan rates,

target prices, and deficiency payments are presented in table 9-1. Deficiency payments increased dramatically in 1984 and have since

nearly doubled. As a result, in recent years payments that are by definition based on yield account for an increasing proportion of a producer’s income.

A producer’s total payment is calculated by

multiplying the per-bushel deficiency payment

times the program acres and then times the

proven yield. Program acres are a historical

average of acres planted to wheat, and proven

yield is a historical, 5-year moving average of

an individual producer’s past yields. These historical averages change over time, meaning producers increase or decrease the program acres

devoted to wheat and increase proven yield by

altering variety choices or production practices.

The incentive encourages them to maximize

proven yields in order to achieve the highest

deficiency payment possible.

The Food Security Act of 1985, the most recent major farm legislation, made several

changes in the loan rate and target price provisions. The loan rate for wheat in 1986 was reduced 20 percent, from $3.30/bushel to $2.40,

while the target price remained at $4.38/bushel

for 1986. This meant that with market prices

Table 9-1 .–Loan Rates, Target Prices, and Deficiency Payments for Wheat in the United States, 1974-86

(In dollars/bushel)

National Actual Deficiency payments

average deficiency as proportion of

Year market price Loan rate Target price payment target price (percent)

1974 . . . . . . . . . . . . . . . . . . . . . 4.09 1.37 2.05 — —

1975 . . . . . . . . . . . . . . . . . . . . . 3.56 1.37 2.05 — —

1976 . . . . . . . . . . . . . . . . . . . . . 2.73 2.25 2.29 —

1977 . . . . . . . . . . . . . . . . . . . . .

—

2.33 2.25 2.90 0.65 22.4

1978 . . . . . . . . . . . . . . . . . . . . . 2.97 2.35 3.40 0.52 15.3

1979 . . . . . . . . . . . . . . . . . . . . . 3.78 2.50 3.40 — —

1980 . . . . . . . . . . . . . . . . . . . . . 3.91 3.00/3.30 3.08/3.63 — —

1981 . . . . . . . . . . . . . . . . . . . . . 3.65 3.20/3.50 3.81 0,15 3.9

1982 . . . . . . . . . . . . . . . . . . . . . 3.55 3.55/4.00 4.05 0.50 12.3

1983 . . . . . . . . . . . . . . . . . . . . . 3.53 3.65 4.30 0.65 15.1

1984 . . . . . . . . . . . . . . . . . . . . . 3.38 3.30 4.38 1.00 22.8

1985 . . . . . . . . . . . . . . . . . . . . . 3.08 3.30 4.38 1.08 24.6

1986 . . . . . . . . . . . . . . . . . . . . . 2.40 2.40 4.38 1.98 45.2

SOURCE: US. Department of Agriculture, Statistical Reporting Service, Agricultural Statisflcs, various issues.
221

near the loan rate, the deficiency payment increased from $1.08/bushel to $1.98/bushel in

1986.

Loan Rate Program

Premiums and Discounts

The loan rate program was the primary mechanism for price support prior to 1973 and continues to be an important form of support. A

key component of the loan rate program is the

provision that allows for adjustment in the loan

price a farmer receives based on quality differentials. Each year a schedule of premiums and

discounts is published in the provisions for the

loan rate program. In addition, the market establishes premiums and discounts reflecting the

market-determined value of quality attributes.

These provide incentives with the potential to

influence yields and the allocation of wheat between the market and government via loan forfeitures, This allocation may take place within

as well as between crop years. Administration

of the loan rate program has included premiums for protein above a certain level and discounts for grade differentials. In addition, discounts originally used for loan rate adjustments

have changed over time.

protein premiums as provided by the loan

rate program have been relatively stable (table

9-2). The premium applicable to HRW 13 percent protein over HRW 10.5 percent protein

has been 4.5 cents/bushel since 1965 with the

exception of 1973 and 1974, when it decreased

to 4.25 cents/bushel. From 1950 to 1965 the

premium for HRW 13 percent protein rose from

3 cents to 4 cents/bushel. Throughout the 1950s

and early 1960s the protein premium for HRS

15 percent protein was 6 cents/bushel; it

reached 10.5 cents/bushel from 1965 to 1976;

and it increased to 16 cents/bushel in 1977.

The loan rate premium has been less than the

market premium in most of the past 22 years

(figure 9-1). The market premium was lower in

only 5 years for both HRS and HRW. The

spread between the loan rate and market

premiums has been increasing steadily since

Table 9-2.— Loan Rates and Market Premiums for HRS and HRW, 1965-86 (cents/bushel)

HRW HRS

Loan rate Market Loan rate Market

premium 13% premium 13% premium 15% premium 15%

Market year over 10.5%a

over ordinaryb Difference over 11.5%aover 12°/oc Difference

1965 . . . . . . . . . . . . . . . . . . . . 4.50

1966 . . . . . . . . . . . . . . . . . . . . 4.50

1967 . . . . . . . . . . . . . . . . . . . . 4.50

1968 . . . . . . . . . . . . . . . . . . . . 4.50

1969 . . . . . . . . . . . . . . . . . . . . 4.50

1970 . . . . . . . . . . . . . . . . . . . . 4.50

1971 . . . . . . . . . . . . . . . . . . . . 4.50

1972 . . . . . . . . . . . . . . . . . . . . 4.50

1973 . . . . . . . . . . . . . . . . . . . . 4.25

1974 . . . . . . . . . . . . . . . . . . . . 4.25

1975 . . . . . . . . . . . . . . . . . . . . 4.50

1976 . . . . . . . . . . . . . . . . . . . . 4.50

1977 . . . . . . . . . . . . . . . . . . . . 4.50

1978 . . . . . . . . . . . . . . . . . . . . 4.50

1979 . . . . . . . . . . . . . . . . . . . . 4.50

1980 . . . . . . . . . . . . . . . . . . . . 4.50

1981 . . . . . . . . . . . . . . . . . . . . 4.50

1982 . . . . . . . . . . . . . . . . . . . . 4.50

1983 . . . . . . . . . . . . . . . . . . . . 4.50

1984 . . . . . . . . . . . . . . . . . . . . 4.50

1885 . . . . . . . . . . . . . . . . . . . . 4.50

1986 . . . . . . . . . . . . . . . . . . . . 4.50

– 2

5

3

17

3

15

6

5

8

44

42

31

9

3

9

5

3

19

30

19

34

15

–6.50

0.50

– 1.50

12.50

– 1.50

10.50

1.50

0.50

3.75

39.75

37.50

26.50

4.50

– 1.50

4.50

0.50

– 1.50

14.50

25.50

14.50

29.50

10.50

10.50

10.50

10.50

10.50

10.50

10.50

10.50

10.50

10.50

10.50

10.50

10.50

16.00

16.00

16.00

16.00

16.00

16.00

16.00

16.00

16.00

16.00

4

22

17

12

16

8

12

69

98

36

19

11

16

50

14

18

20

53

74

78

0.50

– 9.50

–6.50

11.50

6.50

1.50

5.50

–2.50

– 1.50

58.50

87.50

25.50

3.00

– 5.00

0.00

34.00

–2.00

2.00

4.00

37.00

58.00

62.00

au s Depa~ment of Agriculture (USDA), Agricultural Stabilization and Conservation se~~ce, “Schedule of Premiums and Discounts,” various issues

blj&DA Economic Research se~ice, “Wheat Outlook and Situation,” various issues.

cMinne’apolis Grain Exchange, Sfatistica/ Annual, VariOUS @UeS
222

Figure 9-1. - Historical Loan Rate and Market Protein Premium for HRS 15 Percent and HRW 13 Percent, 1965-86

1982. In general, the loan rate premiums

Year

Market premium HRW

Loan premium HRW

for

protein have not reflected market fundamentals, and this spread has been increasing in recent years in both the HRW and HRS market.

This situation has a potential to distort production decisions of variety choice and fertilizer

application to the extent that a trade-off exists

between yield and protein. Storage decisions

are also likely distorted by the disparity in government and market protein premiums. Producers have the incentive to put low-protein

wheat under loan and to forfeit the loan if market prices for that type of wheat do not appreciate. The market premium is typically high

enough to encourage commercial sales of

higher protein wheat. Consequently, the program spreads relative to the market result in

isolating lower protein wheat from the market,

and may to some extent discourage development and adoption of lower protein varieties.

Other features of the loan rate program have

changed over time. Prior to 1973, two other

measures were used to reflect quality in program prices. The first was called a sedimentation test, which measures the quality of protein content in wheat (5). This testis performed

by suspending ground wheat in water and treating it with lactic acid. The portion that within

5 minutes settles to the bottom of a graduated

cylinder is the sedimentation value. Values

range from 3 for very weak wheat to 70 for very
223

strong wheat. Premiums and discounts for different sedimentation values were used during

1963 and 1964 (table 9-3).

The second measure was the discounts associated with varieties, which was used throughout the 1960s and up through 1972. Discounts

were applied on varieties in each class of wheat

deemed “undesirable” due to poor quality characteristics. (The term “undesirable” was used

in the schedule of premiums and discounts,)

The varieties and number of varieties changed

over time to reflect newly released wheats. Generally, a half-dozen varieties were subject to discount in any given year. Examples of “undesirable” HRW varieties in the early 1970s included

Blue Jacket, Purkof, Cache, Red Chief, Staffor,

and Yogo. Examples of “undesirable” HRS varieties included Red River 68, Era, and Neepawa. The discount was 20 cents/bushel throughout this period. This discount ended in 1973

and is no longer used.

Wheat is subject to other premiums and discounts under the loan program. These are applied by grade and not on an individual factor

Table 9-3.—Sedimentation Value Premiums and

Discounts Provided by Loan Rate Program,

1963 and 1964

Premium or Premium or

Sedimentation discount, 1963 Sedimentation discount, 1964

value, 1963 (cents/bushel) value, 1964 (cents/bushel)

21 and below –9 22 and below – 6

22-23 – 8 23-25 – 5

24-25 – 7 26-28 –4

26-27 – 6 29-31 –3

28-29 – 5 32-34 . . . . . . ., –2

30-31 –4 35-37. ., –1

32-33 –3 38-4 2 0

34-35 –2 43-45 + 1

36-3 7 –1 46-48 ., +2

38-4 2 0 49-5 1 +3

43-44 +1 52-54. : : +4

45-46 +2 55-57 +5

47-48 +3 58-60 +6

49-50 +4 61-6 3 +7

51-52 +5 64-66 +8

53-54 +6 67 and above +9

55-56 +7

57-58 +8

59-60 +9

61-62 ., +10

63-64 +11

65 and over +12

SOURCE: U S Department of Agriculture, Agricultural Stabilization and

Conservation Service, “Schedule of Prem!ums and Discounts,” various

issues.

basis as long as the grade is “sample” or better

(table 9-4). Additional discounts based on factors do apply on test weight and damage if the

wheat is No. 4, No. 5, or sample grade in specific years (tables 9-4, 9-5, and 9-6). The discounts applied to damaged kernels were substantially reduced beginning in 1980.

Market premiums and discounts for grade

factors are measured differently than those in

the loan rate provisions. In market transactions,

discounts are normally taken for individual factors such as test weight, damaged kernels, or

foreign material (table 9-7).

It is difficult to compare market discounts

with loan rate discounts because they are not

quoted on the same basis. In general, the loan

rate discounts by grade while the market discounts on the individual factors that determine

grade. Individual wheat factors that determine

grade are presented in table 9-8, Comparisons

must be tentative when using the quoted market discounts and premiums because they are

for a particular point in time and, even though

they may represent the market as a whole, they

do change.

Damage has been one of the more limiting

factors in recent years in grade determination

in HRS and is used here for comparison. The

market discount for a sample with 4 percent

damage would be 10 cents assuming no other

factor discounts. For comparison, 4-percentdamaged kernels would be graded No. 2 and

would result in a 2 cents/bushel discount from

the loan rate. Thus, market discounts are substantially greater than those in the loan rate program; if other factor discounts were also included (e.g., test weight or foreign matter), the

comparison would be even more dramatic,

Annual surveys of country elevators in North

Dakota on discounting practices suggest that,

in general, market premiums and discounts

have increased in the past 3 years (table 9-9).

For example, the discount for 4-percent-damaged kernels (i. e., No. 2) rose from an elevator

average of 2 cents in 1984 to 8.9 cents in 1986.

The individual factors for discount in table

9-4 are the factor levels allowable in order for
224

Table 9-4.—Loan Rate Premiums and Discounts on Wheat by Grade (cents/bushel)

No. 4

Year No. 1 No. 2 No. 3 No. 4a No. 5a No. 5b

~Ontest weight otherwise No.3.

No. 4or No.5 because containing Durumand erred Durum.

C$O.O1 premium for No. 1 heavy.

dTest weight discount for No.4, N0.510r sampie.

‘No. 3 or better heavy.

SOURCE: U.S. Department of Agriculture, Agricultural Stabilization and Conservation Service, “Schedule of Premiums and Discounts,” various issues.

Table 9.5.—Additional Loan Rate Discounts on

Wheat for Test Weighta (cents/bushel)

Test weight 1962 1964

53 to 54.9 . . . . . . . . . . . . . . . . . –6 – 4

50 to 52.9 . . . . . . . . . . . . . . . . . –9 – 6

49 . . . . . . . . . . . . . . . . . . . . . . . . –13 – 9

48 . . . . . . . . . . . . . . . . . . . . . . . . –17 –12

47 . . . . . . . . . . . . . . . . . . . . . . . . –21 –15

46 . . . . . . . . . . . . . . . . . . . . . . . . –25 –18

45 . . . . . . . . . . . . . . . . . . . . . . . . –29 –21

44 . . . . . . . . . . . . . . . . . . . . . . . . –35 –25

43 . . . . . . . . . . . . . . . . . . . . . . . . –41 –29

42 . . . . . . . . . . . . . . . . . . . . . . . . –47 –33

41 . . . . . . . . . . . . . . . . . . . . . . . . –53 –37

40 . . . . . . . . . . . . . . . . . . . . . . . . –59 –41

aApplicable if wheat isNo.4, No, 5, Or sample grade.

SOURCE: US. Department of Agriculture, Agricultural Stabilization and Confervation Service, “Scheduleo fPremiums andDiscounts,’’varlous issues.

wheat to grade No. 2. In adding up the discounts

for each factor except protein, the total possible discount for wheat (i.e. on all factors to the

limit) that grades No. 2 by the market according to the survey was 36 cents/bushel in 1986.

The discount for wheat grading No. 2 by the

loan rate program is 2 cents/bushel. Wheat must

meet the limit of only one of the factors listed

in table 9-8 (except moisture and protein) in order to grade No. 2. In reality wheat would not

likely be discounted by all factors, and only one

or two factors would be limiting for discount

purposes. Generally, damaged kernels have

been one of the more limiting factors in grade

determination in this time period. The discount

for 4-percent-damaged kernels was 8.9 cents

in 1986, assuming all other factor discounts

would apply, while the loan program discount

No. 2 wheat would have been 2 cents/bushel.

The differential between the loan rate and

the market premiums and discounts—a differential that is apparently growing—has a significant impact. Most important is the allocation

of wheat with different qualities between the

loan program and market. In general, this

differential results in higher quality wheat being sold commercially, while the poorer quality wheat, being subject to greater market discounts, is put under loan and stored since the

applicable discounts would be substantially

lower. (Domestic millers have methods of determining where the higher quality wheats are

located and can purchase by location. Millers

can also specify other factors such as falling

numbers, pesticide residue, and sedimentation

before shipment.) With market prices hovering

around loan levels, this wheat has the potential of being stored for an extended time and

of being released to the market only gradually.

For comparison, if loan rate premiums or discounts reflected or exceeded those of the market, the incidence of relatively poor quality

wheat would likely not be reduced due to much

of it being weather-related. Rather, it would result in poor quality wheat being sold to the market directly, rather than being put under loan

and stored. In this case the loan rate would support prices of the higher quality grain, rather

than that of lower quality, as is currently the

case.
225

Table 9-6.—Additional Loan Rate Discounts for Damaged Kernels in Wheat (in cents/bushel)

1951 1962

No. 4 or No. 4, No. 5 1977 & 1978 1980-86

Total percent damage No. 5 or sample sample sample

7.1 to 8.0. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –1

8.1 to 9.0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –2

9.1 to 10.0. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –3

10.1 to 11.0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –4

11.1 to 12.0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –5

12.1 to 13.0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –6

13.1 to 14.0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –7

14.1 to 15.0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –8

15.1 to 16.0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A

16.1 to 17.0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A

17.1 to 18.0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A

18.1 to 19.0. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A

19.1 to 20.0. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A

20.1 to 21.0. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A

21.1 to 22.0. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A

22.1 to 23.0. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A

23.1 to 24.0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A

24.1 to 25.0. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A

25.1 to 26.0. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A

26.1 to 27.0. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A

27.1 to 28.0. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A

28.1 to 29.0. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A

29.1 to 30.0. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A

over 30.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A

– 2

– 3

– 4

– 5

– 6

– 7

– 8

– l o

–12

–14

–16

–18

–20

–22

–24

–26

–28

–30

–32

–34

–36

–38

–60

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

– l o

–12

–14

–16

–18

–20

–22

–24

–26

–28

–30

–32

–34

–36

–38

3 cents

each percent

over 30.0

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

– 2

– 8

10

–12

–14

–16

–18

–20

–22

–24

–26

–28

–30

3 cents

each percent

over 30.0

N/A = not available

SOURCE: U.S. Department of Agriculture, Agricultural Stabilization and Conservation Service, “Schedule of Premiums and Discounts;’ various issues

Table 9-7.—Market Discounts for HRS, February 1987

Item Discounts

Farm Programs and tween yield and quality characteristics (protein

Variety Seduction in this case), any farm program not adequately

discounting for quality deviation will have an

One impact of farm programs is that they may effect on agronomic practices. This section

distort producers’ choices regarding variety presents a budget analysis of the impacts of loan

selection. Given an inverse relationship be- rate protein premiums and deficiency pay-
Table 9-8.—Wheat Quality Factors Determining Grade Standards

Minimum limits of— Maximum limits of—

Test weight per bushel

Hard Red

Spring All other Damaged kernels

wheat or classes HeatShrunken

and Wheat or other classesd

White Club and damaged Foreign broken Contrasting

wheat a

subclasses kernels Total b material kernels Defectsc

classes Total e

Grade (pounds) (pounds) (percent) (percent) (percent) (percent) (percent) (percent) (percent)

U.S. No. 1 . . . . . . . . 58.0 60.0 0.2 2.0 0.5 3.0 3.0 1.0 3.0

U.S. No. 2. . . . . . . . 57.0 58.0 0.2 4.0 1.0 5.0 5.0 2.0 5.0

U.S. No. 3. . . . . . . . 55.0 56.0 0.5 7.0 2.0 8.0 8.0 3.0 10.0

U.S. No. 4. . . . . . . . 53.0 54.0 1.0 10.0 3.0 12.0 12.0 10.0 10.0

U.S. No. 5. . . . . . . . 50.0 51.0 3.0 15.0 5.0 20.0 20.0 10.0 10.0

U.S. Sample grade:

U.S. Sample grade is wheat that:

a. Does not meet the requirements for the grades U.S. Nos. 1, 2, 3, 4, or 5; or

b. Contains 32 or more insect-damaged kernels per 100 grams of wheat; or

c. Contains 8 or more stones or any number of stones which have an aggregate weight in excess of 0.2 percent of the sample weight, 2 or more

pieces of glass, 3 or more crotalaria seeds (Crotalaria spp.), 2 or more castor beans (Ricinus communis L.), 4 or more particles of an unknown foreign substance(s) or a commonly recognized harmful or toxic substance(s), 2 or more rodent pellets, bird droppings, or equivalent quantity of other

animal filth per 1,000 grams of wheat; or

d. Has a musty, sour, or commercially objectionable foreign odor (except smut or garlic odor); or

e. Is heating or otherwise of distinctly low quality.

aThe~e ~e~ulre~ent~ also apply When Hard Red Spring or White Club wheat predominate In a samPle of Mixed wheat

blncludes heat-damaged kernels

~Defects Include damaged kernels (total), foreign material, and shrunken and broken kernels The sum of these three factors may not exceed the Ilmlt for defects for each numencal grade

Unclassed wheat of any grade may contain not more than 100 percent of wheat of other classes

elncludes contrasting classes

SOURCE: Federal Grain InspectIon Service, U S Department of Agriculture, 1988
227

Table 9-9.—Average Price Adjustments for Each Factor Among North Dakota Country Elevators,

Fall 1984, 1985, and 1986 (cents/bushel)

Commodity

(base grade) Factor 1984 average 1985 average 1986 average

HRS 57 Ibs. test weight. . . . . . . . . . . . . . . . . . . . . – 1.9

#1 DNS 14.5% moisture . . . . . . . . . . . . . . . . . . . . . . . –5.9

140/0 Protein 16% protein . . . . . . . . . . . . . . . . . . . . . . . . . . 41.0

12% protein . . . . . . . . . . . . . . . . . . . . . . . . . . –38.0

4% damaged kernels . . . . . . . . . . . . . . . . . . –2.0

1% foreign material . . . . . . . . . . . . . . . . . . . –1.4

5% shrunken and broken kernels . . . . . . . . –2.2

2% contrasting classes . . . . . . . . . . . . . . . . –1.6

5% wheat of other classes . . . . . . . . . . . . . —

–1.8

–6.8

63.4

–67.4

–6.6

–1.3

–3.0

–3.2

–7.0

–2.9

–6.5

62.6

–43.9

–8.9

–1.7

–4.2

–3.5

–8.6

SOURCE: B Clew, W. Wilson, andR Hielman, ‘‘Pricing and Marketing Practices for North Dakota Durum and H RS Wheat 1986 Crop Year, ” Department of Agricultural

Economics, North Dakota State University, Fargo, ND, 1987.

ments. Typical producer situations are posed

for a North Dakotan and a Kansan wheat producer from 1965 to 1986.

The measure used in this analysis is total revenue. Costs per acre are assumed the same

across varieties. The protein premiums used

for HRS were the government loan rate

premium and the market premium for 14 percent and 15 percent protein; for HRW, the

premiums used were for 13 percent and 11 percent protein. Government program impacts

were incorporated into the analysis in that target price instead of market price was used to

calculate total revenue. This assumes 100 percent participation in government programs,

Yield used in the analysis was 30 bushels/acre

for HRS 14 percent protein and 25 bushels/acre

for HRS 15 percent protein in order to reflect

a typical yield/protein trade-off. For HRW, the

figures used were 35 bushels/acre for 13 percent protein and 41 bushels/acre for 11 percent

protein. Total revenue was calculated by adding the market protein premium or government

premium to target price and multiplying this

sum by the yield per acre.

Total revenues under the market premium

condition and the government premium condition would be relatively similar in these

hypothetical cases except for two brief periods

(tables 9-10 and 9-11). In the mid-1970s and

1980s, when market premiums were much higher,

total revenue would be greater under them than

under the government premium.

Of particular interest is the revenues per acre

achievable under the loan program. The farm

programs have always favored higher yielding

wheats, but the difference increased during the

1980s. In 1969 the difference in North Dakota

was $9/acre; in 1979 it was $16/acre. Since then

the spread favoring production of higher yielding wheats has increased to $20/acre. Similar

results were observed in Kansas.

The shift toward higher yielding varieties

forces the market premium to increase in order to achieve a certain level of protein, To analyze the potential impacts, the producer budgets

just described were calculated under various

yield scenarios in order to determine the protein premiums necessary for a producer to be

indifferent about using high- or low-yielding

wheat. In the case of North Dakota, the total

revenue was equated to $144/acre, which corresponds with production of 30 bushels/acre

and 14 percent protein in table 9-10.

The results are shown in table 9-12 for various yield levels, but in each case protein was

15 percent and total revenue was constrained

to $144/acre. For example, if a producer could

achieve an increase of 1 percent protein with

a decrease in yield of 1 bushel/acre, the premium necessary for $144/acre is 53 cents/

bushel. A more realistic situation is where 3

bushels/acre would be foregone to increase protein 1 percent. In this case the protein premium

would have to increase to 75 cents/bushel per

1 percent of protein.

The protein premium needed to neutralize

a producer’s decision to produce 14 percent or

15 percent protein wheat increases rapidly as

the yield difference increases. This is caused
228

Table 9-10.—Theoretical Revenue for a One-Acre Farm in North Dakota, 1965-86

25 bushel/acre/15% protein 30 bushel/acre/14°A protein

Protein premium Revenue per acre Protein premium Revenue per acre

Target (dollars/bushel) (dollars/acre) (dollars/bushel) (dollars/acre)

Year pricea Market Loan rate Market b Loan ratec Market Loan rate Market b Loan rate

c

1965 . . . . . . . . . . . . . . . . . . . . . 1.69 0.11

1966 . . . . . . . . . . . . . . . . . . . . . 1.84 0.01

1967 . . . . . . . . . . . . . . . . . . . . . 1.73 0.04

1968 . . . . . . . . . . . . . . . . . . . . . 1.80 0.22

1969 . . . . . . . . . . . . . . . . . . . . . 1.89 0.17

1970 . . . . . . . . . . . . . . . . . . . . . 2.00 0.12

1971 . . . . . . . . . . . . . . . . . . . . . 1.79 0.16

1972 . . . . . . . . . . . . . . . . . . . . . 1.72 0.08

1973 . . . . . . . . . . . . . . . . . . . . . 1.47 0.12

1974 . . . . . . . . . . . . . . . . . . . . . 2.05 0.44

1975 . . . . . . . . . . . . . . . . . . . . . 2.05 0.71

1976 . . . . . . . . . . . . . . . . . . . . . 2.29 0.36

1977 . . . . . . . . . . . . . . . . . . . . . 2.90 0.19

1978 . . . . . . . . . . . . . . . . . . . . . 3.40 0.11

1979 . . . . . . . . . . . . . . . . . . . . . 3.40 0.16

1980 . . . . . . . . . . . . . . . . . . . . . 3.63 0.50

1981 . . . . . . . . . . . . . . . . . . . . . 3.81 0.14

1982 . . . . . . . . . . . . . . . . . . . . . 4.05 0.18

1983 . . . . . . . . . . . . . . . . . . . . . 4.30 0.20

1984 . . . . . . . . . . . . . . . . . . . . . 4.38 0.53

1985 . . . . . . . . . . . . . . . . . . . . . 4.38 0.74

1986 . . . . . . . . . . . . . . . . . . . . . 4.38 0,78

0.105

0.105

0.105

0.105

0.105

0.105

0.105

0.105

0.105

0.105

0.105

0.105

0.160

0.160

0.160

0.160

0.160

0.160

0.160

0.160

0.160

0.160

45

46

44

51

52

53

49

45

40

62

69

66

77

88

89

103

99

106

113

123

128

129

45

49

46

48

50

53

47

46

39

54

54

60

77

89

89

95

99

105

112

114

114

114

0.060

0.010

0.040

0.100

0.070

0.020

0.150

0.080

0.120

0.280

0.440

0.230

0.110

0.035

0.010

0.220

0.060

0.090

0.150

0.300

0.420

0.430

0.075

0.075

0.075

0.075

0.075

0.075

0.075

0.075

0.075

0.075

0.075

0.075

0.090

0.090

0.090

0.090

0.090

0.090

0.090

0.090

0.090

0,090

53

56

53

57

59

61

58

54

48

70

75

76

90

103

102

116

116

125

134

140

144

144

53

57

54

56

59

62

56

54

46

64

64

71

90

105

105

112

117

125

132

134

134

134

apriorto 1g73 target ~ric. is blended average Priceto program participants reflecting national average price received by farmers and the marketing ceflificate ‘alue

averaged for participant’s total production. Post-1973 target price is loan rate plus deficiency payment

bRevenue is market premium piustarget price times yield.

cRevenue is government premium plus target price ‘imes yield

SOURCE: U.S. Department of Agriculture, Statistical Reporting Service, Agricu/tura/Statistics, various issues.

by the target price deficiency payment program,

which pays a producer $1.98/bushel more than

the market. Thus the opportunity cost of decreasing yield and increasing protein is $4.38

(target price) This creates a high-protein

premium needed to render a producer indifferent between producing 14 percent and 15 percent protein wheat. Similar results are shown

in table 9-13 for HRW wheat in Kansas.

Government Storage Policies

The Commodity Credit Corporation (CCC) of

the U.S. Department of Agriculture (USDA)

enters into agreements with commercial warehouses to handle and store grain. This covers

grain owned by CCC, pledged to the agency as

collateral under the price support program, delivered to the warehouse for purchase by CCC

under a price support program, delivered to the

warehouse in liquidation of a price support

loan, or held by CCC for any other reason. The

contractual agreement is referred to as the Uniform Grain Storage Agreement (UGSA). It covers areas such as standards for approving warehouses, inspection requirements, load out and

delivery requirements, and settlement procedures (3).

Warehouses, for the purpose of applying the

UGSA, are defined on the basis of whether inspections sponsored by the Federal Grain Inspection Service (hereafter referred to as "official inspection’’) and UGSA-approved weights

are available. Country elevators are those locations where official inspections and UGSA

weights are not available, while terminal elevators do have these available. Within the

UGSA, different rules apply to country and terminal warehouses.

Inspection requirements obviously differ

since the distinction between country and terminal elevators is based on whether official inspection is available. In general, grain shipped

into and out of terminal elevators must be officially inspected. However, CCC retains the

right to have quality determined at other points
229

Table 9-11 .—Theoretical Revenue for a One-Acre Farm in Kansas, 1965-86

25 bushel/acre/15% protein 30 bushel/acre/14% protein

Protein premium

Target (dollars/bushel)

Year pricea Market Loan rate

1965 . . . . . . . . . . . . . . . . . . . . . 1.69 –0.02

1966 . . . . . . . . . . . . . . . . . . . . . 1.84 0.05

1967 . . . . . . . . . . . . . . . . . . . . . 1.73 0.03

1968 . . . . . . . . . . . . . . . . . . . . . 1.80 0.17

1969 . . . . . . . . . . . . . . . . . . . . . 1.89 0.03

1970 . . . . . . . . . . . . . . . . . . . . . 2.00 0.15

1971 . . . . . . . . . . . . . . . . . . . . . 1.79 0.06

1972 . . . . . . . . . . . . . . . . . . . . . 1.72 0.05

1973 . . . . . . . . . . . . . . . . . . . . . 1.47 0.08

1974 . . . . . . . . . . . . . . . . . . . . . 2.05 0.44

1975 . . . . . . . . . . . . . . . . . . . . . 2.05 0.42

1976 . . . . . . . . . . . . . . . . . . . . . 2.29 0.31

1977 . . . . . . . . . . . . . . . . . . . . . 2.90 0.09

1978 . . . . . . . . . . . . . . . . . . . . . 3.40 0.03

1979 . . . . . . . . . . . . . . . . . . . . . 3.40 0.09

1980 . . . . . . . . . . . . . . . . . . . . . 3.63 0.05

1981 . . . . . . . . . . . . . . . . . . . . . 3.81 0.03

1982 . . . . . . . . . . . . . . . . . . . . . 4.05 0.19

1983 . . . . . . . . . . . . . . . . . . . . . 4.30 0.30

1984 . . . . . . . . . . . . . . . . . . . . . 4.38 0.19

1985 . . . . . . . . . . . . . . . . . . . . . 4.38 0.34

1986 . . . . . . . . . . . . . . . . . . . . . 4.38 0.15

0.0450

0.0450

0.0450

0.0450

0.0450

0.0450

0.0450

0.0450

0.0425

0.0425

0,0450

0.0450

0.0450

0.0450

0.0450

0.0450

0.0450

0.0450

0.0450

0.0450

0.0450

0.0450

Revenue per acre Protein premium

(dollars/acre) (dollars/bushel)

Marke t

b Loan ratec Market Loan rate

58

66

62

69

67

75

65

62

54

87

86

91

105

120

122

129

134

148

161

160

165

61

66

62

65

68

72

64

62

53

73

72

81

103

121

120

129

135

143

152

155

155

—

—

—

—

—

—

—

—

—

—

—

—

0.005

0.005

0.005

0.005

0.005

0.005

0.005

0.005

0.005

Revenue per acre

(dollars/acre)

Marke t

b Loan ratec

69

75

71

74

77

82

73

71

60

84

84

94

119

139

139

149

156

166

176

180

180

69

75

71

74

77

82

73

71

60

84

84

94

119

139

139

150

156

166

177

180

180

159 155 – 0.005 180 180

aprior t. 1973 target price is blended average price to program participants reflecting national average PriCe received by farmers and the marketing certificate ‘alue

baveraged for participant’s total production. Post-1973 target prices is loan rate plus deficiency payment.

Revenue is market premium plus target price times yield.

Cflevenue is go ev rnment premium plus target price times yield.

SOURCE:US Department of Agriculture, Statistical Reporting Service, “AgriculturalS tatistics;’ various issues,

Table9-12.—lmplied Premium Necessary for HRS Producers To Be Indifferent

About Growing 14 or 15 Percent Protein Wheat

Yield Protein Premiuma

Loan rate Revenueb

(bushel/acre) (percent) (dollars/bushel) (dollars/bushel) (dollars/acre)

29. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 0.53 2.40 144

28. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 0.64 2.40 144

27. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 0.75 2.40 144

26. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 0.87 2.40 144

25. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 1.00 2.40 144

aPremiums are derived from equating TR to $144/acre,

bRevenue (TR) was derived asTR = YP* Dp + (’fa ” po) + ‘a* ‘remium

where YP is proven yield (30 in this case), DP is the deficiency payment, Ya is actual yield (29. .25), P. is market price

or loan rate.

SOURCE: Office of Technology Assessment, 1989.

and as agreed to by the warehouse operation

and CCC. The quality of producer deliveries

for liquidating price support loans at terminal

elevators is determined as agreed to by producer and warehouse receiver.

Quality determination on grain received into

country elevators is based on agreement either

between the warehouse and CCC or between

producer and the warehouse. For grain loaded

out of country elevators by truck, quality is determined on the basis and at a point specified

in the CCC loading order. For all other carriers,

it is obtained at destination or at a point specified in the loading order.

When grain is accepted for storage, the warehouse operator must issue negotiable warehouse receipts that show results for all factors

contained in the grain standards and furnish
230

Table 9-13.—lmplied Premium Necessary for HRW Producers To Be Indifferent

About Growing 11 or 13 Percent Protein Wheat

Protein Premiuma

Loan rate Revenueb

Yield (bushel/acre) (percent) (dollars/bushel) (dollars/bushel) (dollars/acre)

39. . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 0.10 2.40 179

37. . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 0.24 2.40 179

35. . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 0.39 2.40 179

33. . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 0.56 2.40 179

31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 0.75 2.40 179

apremium~ are derived from equating TR to $179/acre

bRevenue(TR) was derived asTR = ‘P

“‘p + ‘y’ ● ‘!) +‘a•‘re m

i where YOis proven yield (41 inthiscase), DPts the delclency payment, u m Ya isactualyleld (39 31), Po is market price or

loan ratd,

SOURCE” Office of Technology Assessment, 1989

all weight and quality certificates to CCC. These

receipts are then used to determine the quantity and quality of the grain being stored for

CCC and as the basis for issuing loading orders.

CCC uses the individual factor results reported

on the various warehouse receipts for computerized blending to arrive at weighted average

grade and factor results. These averages then

serve as the grade and weighted average quality that appears on the loading order. In some

cases, this has resulted in a higher grade than

is represented by any of the warehouse receipts

(2). For example, grain at grade Nos. 2,3, and

4 can be blended to arrive at a weighted average grade of No. 1 even though no individual

warehouse receipts have been issued for No. 1.

Recently CCC amended the UGSA regarding

load out and delivery requirements for terminal elevators in order to restrict computerized

blending to three broad categories. Factor results for grade Nos. 1, 2, and 3 will be blended

together as one category, factor results from

grade Nos. 4 and 5 as the second category, and

results from sample grade as the third. The

amendment also specifies that blending should

not result in a weighted average quality of a

higher grade than reported on at least one-third

of the warehouse receipts used as the basis for

determining quality.

Load out and delivery requirements contained in the UGSA call for the warehouse to

deliver the grain ordered shipped by CCC. At

both country and terminal elevators, the qualities represented by the warehouse receipts

serve as the basis for the load out quality requirements. When CCC surrenders receipts

representing a specific grade with weighted

average quality to a terminal elevator, each shipment must meet the specific grade and weighted

average results. CCC can request a unit shipment (a minimum 10 railcars shipped on the

same bill of lading to comply with a tariff that

offers rate incentive). When unit shipments are

called from a terminal elevator, individual railcars will be accepted if they do not grade more

than one grade below the weighted average

grade and no lower than the lowest grade warehouse receipt.

CCC may reject shipments of grain loaded

out of terminal elevators if:

1. the quality is lower than the weighted average quality or specific quality called for

even though it meets the specific grade,

2. if it does not meet the unit shipment requirement, or

3. if it is not fairly representative of the quality ordered.

At country elevators, the warehouse operator must load a grade and quality that is fairly

representative of the quality described by warehouse receipts. Unit shipments can be loaded

from country elevators under the terms spelled

out for terminal elevators when that is agreeable to the warehouse and CCC. On grain delivered from country elevators, the grain may

be rejected if it does not meet the requirements

specified in the loading order. CCC, however,

will not reject individual railcars, except those

grading sample grade, in a unit shipment from

country elevators as long as the whole shipment

is fairly uniform in terms of the quality called

for in the loading order.
231

Settlement for load out is based on the value

of the grain delivered and the grain ordered

shipped by CCC using premium and discount

schedules established by the agency. On grain

delivered from terminal elevators that is accepted by CCC, settlement will be based on the

value of the net deficiencies for all grain in the

loading order. No discounts will be applied on

unit shipments if the quality in all railcars

equals the weighted average quality called for

in the loading order, The warehouse operator

must pay CCC for the value of underdeliveries

in quality, but CCC will not pay for the value

of overdeliveries. This is not the case for grain

shipped from country elevators, as CCC will

pay for the value of their overdeliveries.

When grain is rejected at terminal elevators,

the warehouse will not be given credit for loading out that quantity. The rejected grain must

be replaced even though additional grain must

be obtained to meet the loading order issued

by CCC. The agency can accept rejected grain

if agreement is reached between both parties

on a discount prior to CCC’s authorization to

ship.

At country elevators, the warehouse operator replaces the rejected grain at CCC’s option.

If rejected grain is not replaced, however, CCC

sells it for their account. In determining values

for grain shipped from country elevators, special provisions have been included for sample

grade shipments not required by the loading

order and a 10 cents/bushel charge is included

for rejected grain that is not replaced.

The differences in CCC rules as they pertain

to country versus terminal elevators creates

some unusual problems for grain quality. The

fact that CCC does not apply the same rules is

a negative influence on the quality of CCC grain.

Given that CCC premiums and discounts do not

always reflect the market, the possibility therefore exists for quality deterioration of grain

stored by country elevators and to some degree

by terminal elevators.

USDA publishes figures for State average

UGSA handling and storage rates for country

and terminal elevators. In Iowa, for example,

country elevators handling corn charge on average 7.92 cents/bushel for handling inbound

truck deliveries and 8.79 cents/bushel for outbound by rail. The average storage charge there

is 37.74 cents/bushel. Based on these figures,

a country elevator that takes in corn, holds it

for 1 year, and then loads it out receives 54,45

cents/bushel for handling and storing,

The USDA premiums and discounts for corn

do not completely reflect the market discount

levels. For example, USDA for June, 1988

assessed a 1-cent discount for corn damaged

between 5.0 and 6.0 percent. A 2-cent discount

was assessed for every l-percent increase above

6.1 percent. Yet, market discounts for corn arriving in Kansas City on June 15, 1988 were 3

cents per percentage point above 5,0 percent,

Thus corn containing 7.4 percent damage is

assessed a 9 cents/bushel discount by the market, but only 5 cents/bushel by CCC.

All these considerations–the fact that CCC

accepts grain below the quality represented by

warehouse receipts, the costs of maintaining

quality while in storage, the revenue received

from handling and storage, and the less-thanmarket discounts that are applied—combine to

create a situation in which the benefits of maintaining quality must be weighed against the economic benefits of delivering grain of poorer

quality than indicated on warehouse receipts.

Furthermore, the economics of this situation

are more dynamic at country than at terminal

elevators.

As noted, grain shipped from country elevators can be rejected if it does not meet the quality specified in the loading order, but country

elevators do not have to replace the grain, in

contrast to terminal elevators. When country

elevators request unit shipments, the quality of

individual railcars shipped as part of a unit will

not be discounted as long as the average for

the unit is fairly representative of the quality

ordered. For unit shipments from terminal elevators, on the other hand, individual railcars

are discounted. CCC policies therefore allow

movement from country to terminal elevators

of grain that is inferior in quality to what must

be shipped from the terminal elevators, plac-
1

232

ing more responsibility on them to maintain

quality.

Impacts of Markets,

Farm Programs, and

Technology on Quality

Agronomic practices and variety choice influence both the quantity and quality of production despite the uncertainties of biological

processes. For example, the physical relationship between fertilizer and yield is well known,

and there is some evidence that producers adjust yields in response to changing economic

conditions. It is also plausible that quality characteristics adjust with changing economic and

technological conditions. Changes in farm programs and market prices influence producer

decisionmaking regarding yield versus quality.

This section examines the extent of and potential for adjustments in quality content (via wheat

protein) in reaction to economic variables.

The trade-offs governing yield and protein

choices are somewhat imprecise biological relationships. In particular, yield and fertilizer are

positively related because soil nutrients stimulate grain production. Also, yield and protein

are inversely related because varieties may be

chosen with relatively high yield and low protein or vice versa.

Producers are faced with a conflict between

incentives and trade-offs, or between improving

quality and reducing production. Production

on a given parcel of land can be expanded either through more intensive farming practices

or through reduction in crop quality. Resolution of these alternatives requires evaluation

of contributions to profits by small changes in

fertilizer and protein content. The profit contribution of a l-point increase in protein consists of an increase in revenue due to the higher

price and a decrease in revenue due to reduced

yields. Profits can no longer be increased when

the revenue gain from increased yield and the

loss from reduced protein offset each other.

The functions influencing the producer’s

choice of protein level are illustrated in figure

9-2. The yield loss function is upward sloping,

Figure 9-2. - Producers’ Protein Choice for Wheat

Percent I

(o-1)

c Protein

a: Percent yield loss from higher protein

b: Percent price gain from a protein increase

c: Protein level that would maximize profits

SOURCE: Office of Technology ~nt 1989

reflecting the reduced yields that accompany

increases in protein. The shape of the percentage price gain function depends on the characteristics of the protein premium schedule. For

demonstration purposes, it is a downward sloping function of protein content. However, it

could be flat, which would imply the percentage price gain is constant across protein levels.

The protein level that would maximize producer profits occurs where the percentage price

gain and yield loss are equal. From the producer’s perspective, this would be the most desirable protein level.

Thus, the producer’s choice between expanding yield or protein entails evaluation of the

trade-off of the economic returns associated

with each alternative. As protein premiums

change (e.g., due to a change in the market),

the percentage price gain function (b) shifts,

resulting in a different optimal protein level.

Similarly, if target prices increase, at a given

protein premium level in cents/bushel, the protein premium as a percent of target price diminishes, resulting in a reduction in the desired
233

protein level. Likewise, as technology changes,

the yield loss function would change, also resulting in a different desired protein level,

This conceptual framework suggests that producers can and do respond to protein premiums

in their production decisions. An analysis of

the extent to which producers have responded

to changes in the market in variety choice and

therefore protein levels in Kansas and North

Dakota showed that protein levels have been

decreasing in Kansas since 1978. Protein levels

in North Dakota have been more variable, with

a reduction from 1979 to 1985, followed by a

slight increase in 1986 (4).

This study found overall only a small and occasional protein response to market incentives.

In North Dakota, a change in the protein premium from historical minimum to maximum

resulted in a 0.3 percent change in the average

protein content. There is no evidence of any

protein response in Kansas. Both States registered a long-term downward trend in protein

level. One explanation is that in both cases, but

especially Kansas, only a narrow range of protein choices is available from plant breeders,

thereby limiting producers’ ability to respond

to economic variables (4).

A decline in protein content of 0.2 to 0.5 percent has occurred in Kansas and North Dakota

during the last 20 years (4). This decline coincides with the adoption of new generations

of technology; semidwarf varieties released

since the 1970s have included varieties with

lower protein levels than those previously available. Producers’ choices among varieties include several factors in addition to protein content, such as yield advantage and disease

resistance, that may be the primary influences

on seed selection. Decisions about yield advantage and disease resistance may have indications for protein levels, but it does not appear

that protein incentives have a strong influence

on the average protein content of the Great

Plains wheat crop.

FINDINGS AND CONCLUSIONS

Farm programs have played an important

role in U.S. agriculture. Because they send incentives throughout the system, they have the

potential to affect quality. Two farm program

provisions are generally applicable: the loan

rate program and its associated premiums and

discounts for deviations from a specified quality, and the target price/deficiency payment program, which bases payments on yield. To the

extent that yield and quality are inversely related, incentives to increase yield put pressure

on producers to reduce quality indirectly. Analysis of these two aspects of farm programs resulted in the following findings.

● The administration of loan rate values for

wheat has changed over time. In the 1960s

two additional premiums/discounts for

quality were available in addition to those

for grade: one based on sedimentation tests

and another for variety discounts. These

were discontinued in the early 1970s.

• Substantial differences exist between loan

rate premiums and discounts relative to

●

●

those of the market. The spread of premiums and discounts for protein has nearly

always been less than that for market

premiums/discounts, and this difference

has been increasing in recent years. The

signals transmitted via the loan rate thus

do not provide incentives for quality improvement and, because of these spreads,

inferior quality wheat will have a tendency

to go to the loan program.

There is a distinct trade-off in production

between yield and protein. In recent years

this trade-off has been increasing, suggesting the opportunity costs of maintaining

a certain protein level in terms of yield foregone is rising.

The target price program provides an incentive to increase yields because of a

higher price level per bushel. From a producer perspective the optimum protein

level decreases as target prices increase.

As target prices stimulate higher yields and

therefore lowered protein levels, pressure
234

to increase protein premiums in the market has escalated due to a shortage of high

protein wheat.

Given these findings, a combination of policy and institutional factors may inhibit producer response to quality incentives. Public

information about the yield and quality consequences of particular variety selections is not

generally available. Further, in some regions

of the country the first point of receipt in the

market channel typically does not apply to individual producers premiums and discounts for

quality. And finally, the range of protein or quality choices available to producers from the plant

breeders is small and may preclude adjustment.

Farm programs potentially have important

impacts on quality in commodities such as

wheat, corn, and soybeans in which the loan

rate program is an important feature and where

trade-offs exist between yield and a major quality factor such as protein. When the loan rate

program is less than market premiums and discounts, it results in distortions. The most important one is that the incidence of inferior

quality is not reduced. Given the amount of

carryover storage of grain in the United States

between crop years compared with other exporting countries, inferior quality grain is distributed over several subsequent years.

1.

2.

3.

CHAPTER 9

Cochrane, W., and Ryan, M., American Farm

Policy (Minneapolis, MN: University of Minnesota Press, 1976).

National Grain and Feed Association, Grain Merchandising and Storage in 1987-88 (Washington,

DC: 1987).

U.S. Department of Agriculture, Commodity

Credit Corporation, “Uniform Grain Storage

Agreement (UGSA),” Pub. No. CCC-25, Washington, DC, 1988.

The target price program has longer term impacts. Incentives are transmitted throughout

the production sector to increase yields. The

transmission of signals from producers to plant

breeders and ultimately to variety development

is along, dynamic process. The target price program causes underlying pressure for reduced

protein levels in the market and thus fundamental pressure on protein premiums. There has

been little response in the past to variability in

protein premiums. This could be due in part

to constraints of technology and variety development, and in part to release programs that

have been given persistent signals over the

years for increased yield.

Results of this analysis of farm programs were

presented in testimony before the Senate Committee on Agriculture, Nutrition and Forestry

and the House Agriculture Committee. Congress then amended the U.S. Grain Standards

Act in Public Law 100-518 to direct the Secretary of Agriculture to establish a pilot project

for the 1989 wheat, soybeans, and feed grains

crops to determine a method of requiring the

Commodity Credit Corporation to determine

a schedule of premiums and discounts on grain

offered as loan so as to encourage the marketing of high-quality grain.

REFERENCES

4. Wilson, W., Gallagher, P., and Riepe, J., “Analysis of Demand for Wheat Quality Characteristics,” a background paper prepared for the Office

of Technology Assessment, U.S. Congress,

Washington, DC, 1988.

5. Zeleny, L., “Criteria of Wheat Quality,” Wheat

Chemistry and Technology (St. Paul, MN: American Association of Cereal Chemists, 1978).
Chapter 10

Comparison of Technologies

and Policies Affecting

Grain Quality in Major

Grain-Exporting Countries
CONTENTS

Page

Production Technologies and Practices. . . . . . . . . . . . . . . . . . . . . . ..........237

Handling Technologies and Practices at First Point of Receipt . ..........239

Drying . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .........................239

Cleaning . . . . . . . . . . . . . . . . . . . . . . . . . . . . ........ . ..................239

Storage and Handling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............239

Transportation to Ports . . . . . . . . . . . . . . . . . .,....... . ................239

Handling Technologies and Practices at Export . . . . . . . . . . . . . . . . . . ......241

Storage. ... ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . .........241

Drying and Cleaning . . . . . . . . . . . . . . . . . . . . . . ........................241

Blending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ......... ......241

Institutions and Regulations Affecting Grain Quality . ...................241

Seed Variety Control. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -............241

Grain Receival Standards . . . . . . . . . . . . . . . . . . . . . . ! . . . . . . . . . . . . . ......244

Marketing by Variety. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..............244

Grain Inspection Authority and Grade Standards . ....................244

Government Policies Affecting Grain Quality. . ........................244

Price Policy. . . . . . . . . . . . . . . . . . . . . . . . ....... . ...................244

Farm Storage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...................,246

Comparison of U.S. Institutions, Policies, and Technologies With

Those of Other Grain-Exporting Countries. .. -.. ....... . ......-.-246

Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . ., . . ........ . . . . . . . ........ ..246

Institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... ...246

Technologies and Grain-Handling Practices . . . . . . ........ . ..........247

Table

10-1.

10-2.

10-3.

10-4.

10-5.

Tables

Page

Comparison of Production Technologies of Major Grain-Exporting

Countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .. .. .. ... ... ...238

Comparison of Handling Technologies and Practices at First

Point of Receipt of Major Grain-Exporting Countries . ..............240

Comparison of Handling Technologies and Practices at Export

of Major Grain-Exporting Countries . . . . . . . . . . . . . . . . . . . . .........242

Comparison of Institutions and Regulations Affecting Grain

Quality of Major Grain-Exporting Countries . . . . . . . . ........ .. ....243

Comparison of Government Policies Affecting Grain Quality of

Major Grain-Exporting Countries . . . . . . . . . . . . . . . . . . .. .. ....-....245
Chapter 10

Comparison of Technologies and

Policies Affecting Grain Quality in

Major Grain-Exporting Countries

This chapter focuses on the grain systems of

the other major exporters—Argentina, Brazil,

Canada, France, and Australia—in order to understand better their grain systems as they relate to quality and to consider adopting some

aspects of those systems.

Observed differences among countries are

important because the differing strategies influence incentives and the quality of the final

product. A comparison of the major technologies, market channels, pricing strategies, and

grading practices in each country provides the

background for a comparison and analysis of

the quality delivered into the domestic and export markets of each. Little published information is available about the grain systems of the

other countries, especially with regard to technologies, institutions, and policies affecting

quality; Canada is a major exception. To provide the documentation needed to prepare this

chapter, OTA formed study teams to travel to

each country except Canada to gather needed

information. The study teams arrived during

the harvest to observe the system at work. Information was gathered via numerous interviews with producers, handlers, processors, exporters, grain inspectors, plant breeders,

researchers, and government officials. Detailed

reports on each country are found in a second

report in this assessment, Grain Quality in

International Trade: A Comparison of Major

U.S. Competitors.

This chapter looks at the technologies, handling practices, institutions, and government

policies that affect grain quality in each country and compares them in each case with the

U.S. system. The technologies are basically the

same, with some minor variations. But major

differences exist in the use of technologies, in

institutions established, and in policies that affect grain quality.

The major grains—corn, wheat, and soybeans

—are grown under various soil and climate conditions and differing cultural practices (table

10-1). Most of the best soil conditions in each

country are used to produce these grains. Cultural practices differ, depending on site conditions. All the countries, however, use mechanized soil preparation, seeding, and cultivation.

Differences exist in the degree to which fertilizer, insecticides, and herbicides are used.

France is the most intensive user of fertilizer,

and this is reflected in its tremendous increase

in wheat yield over the past 10 years. The high

yields and fertilizer rates are primarily a response to economic incentives provided by the

Common Agricultural Policy of the European

Community (EC).

Harvesting technologies are similar in all

countries. The only difference of note is in Australia, where a second screen may be used on

the combine to filter nonmillable materials from

the wheat. Farmers have the incentive to use

this practice because they do not want their

wheat rejected at the country terminal. No such

incentive exists in the United States at the point

of first receipt.

Major differences among countries can be

found in the capacity for and reliance on onfarm storage. The United States has the capacity

237
Table 10-1 .—Comparison of Production Technologies of Major Grain-Exporting Countries

Activity United States Argentina Brazil , . . ,.

Soils and

topography Major production area s

are on stable soils. Low

erosion. Fertility stabiIized. Soybeans usually

incorporated in a rotation with corn or other

crops. Winter wheat

grown under dry land

conditions.

Flat, fertile soils in the

corn belt. Rolling land

farther south in wheat

and sorghum area. Long

rotations including legume pasture. Soybeans

and wheat are often

double-cropped.

—

Expanding production

on newly cleared soils.

Long slopes and yearround erosion and leaching create more problems of maintaining fertility. Extensive terracing

required. Continuous

soybeans not unusual in

Parana and Mato Grosso

do Sul.

France

Major production areas

for wheat located north

and southwest of Paris

on stable, low erosion

soils. Rolling land farther

south in corn-producing

area.

Cultural practices. Fertilizer, insecticide, Limited use of fertilizer Fertilizer, insecticide,

and herbicide used as on corn, increasing use and herbicide used as

needed. Mechanized soil on wheat. Limited use of needed. Mechanized soil

preparation, seeding and herbicides and insecti- preparation, seeding and

cultivation. cides. Mechanized till- cultivation.

age seeding and cultivation.

High use of fertilizer, insecticide, and herbicides. Mechanized soil

preparation, seeding,

and cultivation.

Canada Australia

Wheat grown for export Major wheat production

in four soil zones in areas include south and

western Canada.

wheat grown under

land conditions.

All east coast, and western

dry- Australia. Rolling, dry

land. Extended rotations

with clover.

Fertilizer, insecticide, Phosphatic fertilizers, inand herbicide used as secticides, and herbineeded. Mechanized soil cides used as needed.

preparation, seeding, Mechanized soil prepand cultivation. aration.

Harvesting . . . . . . . . . . Self-propelled combines. Self-propelled combines. Self-propelled combines. Self-propelled combines. Self-propelled combines. Self-propelled combines.

Wheat crop in Northern

plains is swathed before

harvest.

On-farm storage On-farm storage available

for about 50 percent of

corn and soybeans.

SOURCE: Office of Technology Assessment. 1989

Wheat crop is swathed

before harvest.

Only 5 to 10 percent Virtually no on-farm stor- Very little stored on On-farm storage for the Virtually no on-farm storstored on farms. Only age. farms, majority of wheat. age.

very large farms use onfarm storage. ——. .— .
239

to store about half the on-farm grain produced.

In Argentina, Brazil, France, and Australia, onfarm storage capacity is small. Quality control

is the major reason given by Government agencies for discouraging on-farm storage. In Australia, for example, the Wheat Board emphasizes cleanliness and insect control in wheat.

It is their belief that storage provided off-farm

by handlers, more experienced with and knowledgeable about the procedure, results in fewer

quality problems. Greater use of on-farm storage would, according to the Australians, increase infestation and/or pesticide residue, An

important fundamental of grain marketing in

many countries is that the establishment of

stringent requirements at the first point of receipt precludes problems downstream in the

marketing system. Minimal on-farm storage is

an important component of that concept.

HANDLING TECHNOLOGIES AND PRACTICES

AT FIRST POINT OF RECEIPT

Handling technologies and practices at first

point of receipt include the receiving, drying,

cleaning, storage, conveying, and transporting

of grain (table IO-2). Few differences exist

among the countries in how grain is received.

Country elevators basically accept grain in either farm wagons or trucks. Some countries (the

United States) are more mechanized than others

(Brazil). But the differences are minor and inconsequential as far as quality is concerned.

Drying

The same type of drying technology basically

is used in all countries, Most corn needs to be

dried everywhere. Soybeans in Brazil are usually dried, but in Argentina and the United

States this is done to a lesser extent. Hightemperature dryers, either gas- or oil-fired, are

used for the most part. Wheat drying varies by

country. France harvests wheat above 15 percent moisture and dries it for safe storage. Australia, on the other hand, rarely needs to dry

wheat because of’ the country’s dry climate.

Cleaning

Cleaning practices differ by country. In the

United States and Canada, grain is generally

not cleaned at the first point of receipt. In Argentina, Brazil, and France, economic incentives exist to clean grain at this level in the

market channel. In fact, in France it is not uncommon for wheat to be cleaned going in and

coming out of country elevators. Not cleaning

grain at the first point of receipt ensures that

foreign material remains, adding to the cost of

transporting and handling grain throughout the

rest of the marketing channel.

Storage and Handling

The technologies for storage and grain handling are the same for all countries. Differences

arise in the configuration of storage units and

in the speed of handling equipment, In some

countries, such as the United States, vertical

or upright storage facilities predominate. Flat

storage is most prevalent in Brazil. And in Australia, storage facilities vary by state.

Transportation to Ports

Rail and truck are the major modes for transporting grain to port facilities in most countries. The United States is an exception in that

it also has major waterways for transport. Barge

transportation is more cost-effective than truck

and rail. From a quality viewpoint, however,

it has potential problems. As discussed in chapter 7, moisture uniformity is important in maintaining quality. During shipment, moisture migration can be significant if grain is exposed

to several outside temperature and humidity

changes. Barges seem to be more susceptible

to these factors than railcars. In addition, grain

may need to be handled more at times because

of barge movement, which increases the likelihood of damaging the kernel–especially for

corn, The United States may have an advan-
Table 10-2.—Comparison of Handling Technologies and Practices at First Point of Receipt of Major Grain-Exporting Countries

—

Activity United States Argentina Brazil France

Receiving . . . . Truck dumps and hoists Truck dumps and hoists

for virtually all farm wag- at larger facilities. A few

ons and trucks. receiving stations lack

hoists. Waiting lines are

common at harvest.

Drying . . . . . . . The majority of corn is Majority of corn and some

dried and stored on farms. soybeans and wheat are

Most of the corn delivered dried in high-temperature

at harvest is dried by first dryers. Nearly all country

handler in gas-fired elevators have dryers .

dryers. Little drying of Usually oil-fired.

soybeans or wheat.

Cleaning . . . . . Generally grain is not

cleaned when it comes off

the farm. It is placed in

bins according to quality

so that it can be blended

with grains of different

quality when loaded out.

Storage . . . . . . Flat and upright storage.

Upright predominates.

Truck dumps and hoists

at larger facilities. Many

vehicles unloaded by

hand.

Majority of soybeans

dried. Wood and coal

used for fuel.

Truck dumps and hoists

for farm wagons and

trucks.

— . . ..—

Some drying of wheat if

harvested above 15%

moisture Majority of corn

dried with high- temperature dryers similar to

those used in U.S.

Canada Australia — —

Truck dumps and hoists Truck dumps and hoists

for farm wagons and for farm wagons and

trucks trucks.

The majority of wheat is Generally wheat does not

dried and stored on farm. need to be dried. No

Propane dryers are most dryers at bulk handling aucommon. thority (BHA) facilities.

Since there is a premium Soybeans that exceed

for No. 1 grain, most grain Brazilian export quality

is cleaned to less than (foreign material 1.OO/O) are

1.OO/O foreign material. cleaned. Corn is cleaned

to less than 1.0%.

Flat and upright storage. Flat and upright storage.

Determined by relative Flat predominates.

costs and handling requirements.

Most wheat cleaned going Very little cleaning done Generally wheat does not

into country elevator and at this level of marketing need to be cleaned. No

some cleaned going out. system. cleaners at BHA facilities.

Corn routinely cleaned because of broken kernels.

Upright storage predomi- Vertical cement bins; flat Upright, flat, and bunker.

nates. Grain often turned storage and steel tanks. Predominance of any type

and sampled for end-use Vertical predominates. varies by state.

quality tests. Also use flat

storage with numerous

vertical bins,

Handling . . . Use augers, conveyors, Use augers, conveyors, Use augers, conveyors, More use of chain con- Use augers, conveyors, Use augers, conveyors,

belts, and vertical legs. belts, and vertical legs. belts, and vertical legs. veyors than belts.

Transportation

to ports . . . . . . Trucks for short hauls. Truck and rail choice de- Truck predominates for all Grain predominantly transRail and water for long termined by cost and distances. Water available ported by truck.

distance. shortage of rail service. only in southern district

Barge available for move- moving beans to Rio

—.

ment to Buenos Aires. Grande do Sul.

SOURCE Off Ice of Technology Assessment, 1989

belts, and vertical legs. belts, and vertical legs.

Grain predominantly Most wheat is moved by

moved by rail over long rail, some by truck.

distances.

.—
241

tage compared with other countries because

barge transportation is more cost-effective than

alternative modes of transportation. But from

a quality standpoint, this may not be an advantage.

Many of the handling technologies at the final point in the marketing channel are similar

among the countries (table IO-3). But, as with

the practices at first point of receipt, how they

are used differs.

storage

Storage technologies do not vary among the

countries. The number of bins for segregating

by quality does differ, however, as well as the

speed of moving grain in and out of storage.

The United States has the capacity to segregate

grain into multiple bins for storage, which expedites blending. Other countries, such as Argentina and Brazil, have few bins into which

grain can be segregated by quality.

Drying and Cleaning

No major differences exist in either technologies or practices of drying and cleaning grain

at this point. As grain basically is dried and

cleaned at the first point of receipt, there is little need for dryers or cleaners at export. The

United States is somewhat of an exception

because many export facilities receive grain

directly from farmers. And grain must be conditioned for safe storage and handling. But in

most other countries, such as Argentina and

Australia, grain received at export has already

been conditioned at the first point of receipt.

A major exception is Canada, which cleans

wheat at the port facility. However, Canada is

presently studying this practice and the research indicates that cost savings exist in cleaning wheat at inland terminals versus at export.

A basic marketing fundamental of most exporting countries is to condition grain at the first

point of receipt and avoid problems and costs

at later stages in the marketing channel.

Blending

Canada blends wheat to a degree at primary

elevators but is limited to the extent it allows

blending at export terminals. Other exporters

blend grains only to a small degree, mainly because it is uniform upon receipt. The physical

facilities in these countries have been constructed to limit blending of wide margins of

quality. In contrast, grain moving through the

marketing channel in the United States is not

uniform. Blending is done across diverse qualities in an attempt to produce a uniform product for export.

Although the technologies of producing, Seed Variety Control

transporting, and handling grain do not differ

significantly among exporters, the use of them The fundamental area for influencing qualdoes. And they differ to a large extent because ity is through incentives to plant breeders. All

of the varying institutions in each country. This major grain-exporting countries except the

section discusses the institutions and regula- United States have instituted formal mechations important in influencing grain quality in nisms for controlling variety development and

these countries (table IO-4). release. In France, Canada, and Australia, va-
Table 10-3.—Comparison of Handling Technologies and Practices at Export of Major Grain-Exporting Countries

Activity United States Argentina Brazil France Canada Australia —.

Storage . . . .

Drying . . . .

Cleaning .

Blending . . .

SOURCE Office

Vertical storage with multiple bins, high speed in

and out. Segregated by

quality to expedite blending at time of shipping.

Most export facilities have

large drying capacity. Corn

is often dried if received

direct from farmer but soybeans and wheat are seldom dried.

Most export facilities have

capacity for cleaning.

Grain (mostly corn) often

cleaned prior to exporting.

Normal practice. Economic incentive for blending of

wide range of quality due

to the extremes in quality

of grain accepted into the

system.

Vertical silos predominate.

Few bins for quality segregation.

Grain dried by first handler; dryers at export are

seldom used.

Grain cleaned by first handler. Relatively small capacity cleaners.

Limited blending because

of uniform grain received

and lack of physical facilities for blending.

.

of Technology Assessment, 1989.

Vertical and flat storage. Upright bins predominate, Vertical, cement bins pre- Vertical storage segreSmall number of bins stored according to end- dominate. Blending is very gated by quality

Iimits segregation by use qualities. limited—grades must be

quality. kept separate.

Very few export elevators Most export facilities have No dryers at export fa-

..———

Grain dried by first handler, dryers at export seldom used.

Grain cleaned by first handler. Little or no cleaning

capacity.

Limited blending because

of uniform grain received

and lack of physical facilities for blending.

have dryers; grain is con- modest drying capacity.

ditioned by first handler.

Most export elevators do Most cleaning of wheat is

not have cleaners; grain done at this point in marcleaned by first handler. keting system.

Some blending of wheat Blending at primary elevamoving to export, but no tors, but at export only 2°/0

incentive to blend wide of higher grade can be a

margins of differing quali- blend from a lower grade.

ties.

—

cilities

No cleaners at export facilities.

———-——..

Limited blending at export

but only for a few factors.
Table 10-4.—Comparison of Institutions and Regulations Affecting Grain Quality of Major Grain-Exporting Countries

Activity

Seed variety control

Grain receival

standards ., . . .

Marketing by variety .,

-——

United States

No State or Federal

control. Release of varieties influenced to

some extent by landgrant universities.

Largely the market determines adoption of

varieties,

None. All types of quality are accepted with

appropriate discounts

for low-quality grain.

No mechanism exists

for variety identification.

Argentina

Committee of government and industry must

approve agronomic

properties, Quality factors of minor influence.

Grain not meeting a

specifie d minimu m

quality (Condition Camara) is rejected at first

point of sale.

Variety is not identified

in marketing channel.

Grain inspection

authority. . . . . . . . . . . . . Federal Grain Inspec- Junta Nacional de

tion Service (FGIS), U.S. Granos —Government

Department of Agricul- agency responsible for

ture. agriculture

Brazil

Committee with broad

representation directs

research and approves

varieties. Quality is

potential criterion but

not currently effective.

—.

Soybeans not meeting

a minimum quality are

rejected at first point of

sale.

Variety is not identified

in marketing channel.

France

Formal mechanism exists that regulates release of varieties based

on agronomic and quality criteria.

.———

Grain not meeting export contract specifications can be rejected by

surveying company or

receiving elevator.

Very common. Variety

often specified in

wheat contracts

Canada Australia

Formal mechanism - -

used to license new

varieties. Agronomic

and quality criteria

given equal weight in

testing new varieties.

Formal mechanism folI owed as a prerequisite

for release of varieties.

Quality and agronomic

criteria are used

Developed eight grades

for CWRS to differentiate quality, Lowest

grade goes to feed market.

Wheat must meet minimum quality standards.

if not it IS allocated to

feed market.

Licensed grain must be Very common-use varivisually distinguishable. ety control scheme to

facilitate segregation

by classes.

Private inspection Private inspection Canadian Grain Corn- Export Inspection Servagencies. agencies. mission. ice of Department of

Primary Industry.

Grade standards . . . . . . . . Official standards es- Official standards es- Official standards are No official standards. Grain standards estab- Official standards established by FGIS. tablished by Junta. not used in export. Only official quality Iished by Canadian tablished by DepartQuality is based on As- criteria are require- Grain Commission. ment of Primary

sociation Nacional dos ments for intervention Industry.

Exportadores de Cer- mechanism.

eais contract.

SOURCE Off Ice of Technology Assessment, 1989

f&

cd
244

riety approval and release must take into account quality as well as agronomic criteria. And

quality is given equal weight with agronomic

criteria for approval of new varieties. Argentina and Brazil also have formal structures for

release of new varieties, but currently give more

weight to agronomic criteria than quality. Improving yields in these countries is more important than quality improvement at present.

But the mechanism is in place to consider quality criteria when it becomes necessary. The

United States stands alone as the only major

grain exporter with no State or Federal Government involvement in release of new varieties. The U.S. market largely determines the

varieties adopted.

Grain Receival Standards

Another common characteristic of most exporters concerns receival standards. All countries except the United States have minimum

quality standards that must be met for grain

to be accepted at the first point of receipt. Grain

that does not meet these standards is rejected,

and is diverted to the feed market in most countries. However, the United States accepts all

qualities of grain into the market channel, with

appropriate discounts for low-quality grain.

Uniformity of quality is more difficult to attain

without minimum receival standards and provides the incentive for blending discussed

earlier.

Marketing by Variety

In some countries grain is identified in the

marketplace by variety, which is used as a proxy

for end-use value. France and Australia are the

countries that use variety in the marketing of

wheat most extensively. Farmers in these countries must declare in an affidavit the variety of

wheat marketed at the first point of receipt.

France and Australia use variety to facilitate

the segregation of wheat by class. The United

States has no mechanism for variety

cation.

Grain Inspection Authority

Grade Standards

identifiand

Most of the countries have official standards

established by the Government and the inspection of grain is conducted by a Government

agency. Brazil and France are major exceptions. France has no official standards or Government involvement in grain inspection. Quality standards have been established by state and

national agencies in Brazil but domestic and

export trade is based on a contract under the

Association Nacional dos Exportadores de

Cereais. In France the quality requirements for

the EC intervention mechanism provide the

minimum standards. Private agencies in both

countries provide grain inspection services.

GOVERNMENT POLICIES AFFECTING GRAIN QUALITY

As discussed in previous chapters, govern- program, premiums and discounts are estabment policies on agriculture play a major role lished for major grains, but as discussed earlier

in determining the importance of quality in the the level of the premiums and discounts has

market. These policies differ considerably not reflected market conditions since the 1960s.

among the grain exporting countries. The most In addition, economic analysis clearly shows

important policies affecting quality include that the price signals of the loan program faprice policy and farm storage (table 10-5). vor yield over quality (see ch. 9). At the other

extreme, the Argentine Government provides

Price Policy a minimum price and establishes premiums for

high-quality grain. The grain industry of ArPrice policy and the signals it sends through gentina produces and conditions grain for the

the market vary among the exporters. At one best quality grade. Brazil, France, Canada, and

extreme is the United States. Through its loan Australia also have Government price policies
Table 10.5.—Comparison of Government Policies Affecting Grain Quality of Major Grain-Exporting Countries

——

Policy United States

Price . . . . . . . . . . . . Loan rate IS principal

price policy, Includes

premiums and discounts

for major grains but has

not been responsive to

market conditions.

Farm Storag e Farm policy in past decade has encouraged extensive on-farm storage

and Inter-year storage

SOURCE Office of Technology Assessment, 1989

Argentina

Government establishes

minimum prices for farmers and exporters, Government also establishes

premiums for high-quality

grain.

Government policy

through pricing does

encourage on-farm

inter-year storage

not

or

.——

Brazil

Government establishes

a minimum price prior to

planting. It is adjusted

during the crop year to

account for inflation and

political pressure.

No Incentive for farmers

to store on farm.

France

Key policy is European

Community intervention

price, which includes

premiums and discounts

for quality factors. Lower

qualities of wheat equated to feed values.

Farm policy through the

Common Agricultural

Policy (CAP) has not encouraged development of

extensive on-farm storage. Also relatively limited Inter-year storage due

to CAP.

Canada

Initial producer price i s

the principal price policy.

Separate prices established for each grade of

grain. Lower qualities of

wheat equated to feed

values.

Producer deliveries ‘are

regulated to primary elevators via quotas. Onfarm storage is substantial.

Australia

Guaranteed minimum

price (GMP) is key price

policy. It is established

by class and provides

differentials for quality.

Lower qualities of wheat

equated to feed values

Use of GMP provides no

Incentive for delivery in

post-harvest period, leading to minimal use of onfarm storage.
246

that include quality incentives for the grain industry.

Farm Storage

Government policies also influence the

amount of on-farm storage. Most countries do

not have policies that encourage on-farm storage and/or inter-year storage. The exceptions—

Canada and the United States—do have incentives for such storage. But there are differences.

Canada establishes quotas to regulate farmer

deliveries to primary elevators. On-farm storage therefore is a requirement. However, grain

is moved through the system during the marketing year. In contrast, the United States has encouraged extensive on-farm storage through the

loan program and farmers’ reserve. In addition,

it is unusual to market the entire crop in any

one year. Indeed, it is more common for grain

to be stored on-farm for more than a year, creating more potential for quality problems to

develop.

COMPARISON OF U.S. INSTITUTIONS, POLICIES, AND

TECHNOLOGIES WITH THOSE OF OTHER

GRAIN-EXPORTING COUNTRIES

This final section focuses on the major differences between the U.S. grain system and that

of other countries. No one system is ideal. Only

by understanding how the U.S. system compares with other exporters is it possible to begin considering potential changes here to enhance quality.

As noted, from a technological standpoint

few differences exist among the countries. The

major differences revolve around exporters’ institutions and policies regarding grain quality

which influence how these technologies are

applied.

Policy

The United States has a farm price policy that

affects grain quality in at least two ways: it provides economic incentive for yield v. quality,

and it provides economic incentive for on-farm

storage. This stands in contrast to other countries. As indicated in chapter 9, premiums and

discounts are not reflective of market conditions. Even with price differentials, the economic incentive is for yield, and low-quality

grain moves into government loan storage

program.

On-farm storage is a unique characteristic of

the U.S. and Canadian systems. The other countries do not provide incentives for on-farm storage. This allows grain to enter the market channel with a better likelihood that it will be

handled and stored with a minimum of quality

deterioration. In fact, Australia has built its entire system around the concept of controlling

the grain as soon as possible off the farm to

maintain quality. However, another distinguishing characteristic of the U.S. system is that

grain has the potential for carry-over from one

year to the next, sometimes for as long as 3 to

4 years. Other countries do not have the storage capacity for such carry-over. This forces

the marketing of most grain within a year of

production and nearly eliminates any problem

regarding quality with inter-year storage.

Institutions

The U.S. grain system has three major institutional characteristics regarding quality:

1. lack of a seed variety development and release program,

2. lack of a variety identification mechanism,

and

3. no minimum receival standards for grain.

These major, fundamental differences from

other grain-exporting countries have a considerable influence on quality.
247

Seed Variety Development

and Release

Chapter 6 discussed in detail the plant breeding programs for corn, soybeans, and wheat in

the public and private sector of the United

States. There is at best a loose mechanism for

the development and release of new varieties.

Committees, particularly at land-grant schools,

can evaluate new varieties. But there is no State

or Federal involvement in any formal way. Government basically gives no formal signal as to

the criteria for release. The signal comes indirectly through the price support program,

which emphasizes yield and the agronomic

characteristics to achieve higher yields. In contrast, Governments of other countries have formal input into the criteria for development and

release and they formally approve new varieties. Quality is a major criteria they consider

in the release of new varieties, at least for wheat,

Variety Identification

In some countries, mainly France and Australia, not only is variety controlled for use by

farmers but variety is also important as a proxy

for end-use value. An important feature of the

French marketing system is that variety is often

a contract term. In practice, varieties are specified as either an individual variety, a category

of varieties, or excluded varieties. Given that

varieties are in general not usually distinguishable by visual inspection, various mechanisms

are used at the first point of receipt to assure

the integrity of variety specification. First, in

most cases, the cooperative receiving the grain

in France has sold the seed to the producer and

knows its variety. Second, producers must declare the variety at the time of sale via an

affidavit. Third, the buyer can perform a rudimentary testing procedure or request an electrophoresis test from a laboratory to verify the

variety. By knowing the varieties at the time

of receipt, country elevators are capable of binning by varieties, or categories of varieties, and

of selling on that basis. The United States has

no mechanism for variety identification and instead relies on grade structure for segregating

quality, which is becoming more difficult as

new varieties, especially of wheat, are not easily distinguishable.

Grain Receival Standards

As noted earlier, the United States is the only

country that does not have minimal receival

standards for grain. Producers can deliver any

quality of grain and it will be accepted with

appropriate discounts. Other countries would

not allow this. Grain that does not meet the

established minimum quality may be rejected

at the first point of sale. Keeping low-quality

grain out of the market channel eliminates most

quality problems at the export elevator and reduces the opportunity for blending diverse qualities. Once low-quality grain is in the system

it is much more difficult to keep it segregated

from higher quality grain or to keep it from being blended with such quality grain destined

for export.

Technologies and Grain-Handling

Practices

The policies and institutional structure of the

U.S. grain system provide the framework for

various grain-handling practices. The technologies for producing and handling are quite similar everywhere. The main difference is that the

United States is slightly more efficient in their

use. Differences do exist, however, as to when

the technologies are used in the marketing

channel,

A case in point is cleaning. Most countries

except the United States clean grain at the first

point of receipt. Canada and Australia are two

exceptions, but for different reasons. Canada,

however, is studying the economic feasibility

of cleaning grain in the country versus at export and will probably change. Australia does

not clean because unlike in the United States,

the farmers deliver grain that does not need to

be cleaned. Basically, no economic incentive

exists to clean grain at the first point of receipt

in the United States.

The other major handling practice in which

the United States differs from all other ex-
248

porters is blending. Blending of grain over wide

margins of quality to create a uniform product

for sale is necessitated by the lack of any minimum receival standards. Blending does exist

elsewhere, but not to the same extent. Blending in other countries is done over narrow

ranges in quality. These countries basically

have a uniform quality moving through the system at any point in time. The U.S. system lacks

uniformity in quality throughout the market

channel. When grain reaches export, blending

is used in an attempt to produce a uniform quality meeting the buyer’s specifications. The OTA

survey of foreign and domestic buyers of U.S.

grain clearly indicated that lack of uniformity

between shipments is buyers’ biggest complaint

(see ch. 4).
Chapter 11

Policy Options for
and Dimensions

CONTENTS

Page

Problems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .251

Fundamental Advantages of the U.S. Marketing System . ..............251

Problem Areas .. ... .,...... . . . . . ., . . ...:..... . . . . . . . . . . . . . 252

Policy Options . . . . . . . . . . . . . . . .. . ..... .. .. .. .254

Market Solutions and Regulations. .. .. . ~ . . . . . . . . . . . . . . ..............254

Interdependence of the Grain System . . . . . . . . . . . . . . . . ..............256

Fundamental Policy Alternatives, . . . . . . . . . . . . . . . . . . . . . . . . . ........ .257

Summary and Conclusions . . . . . . ....... . ..........................267

Figur e

Figure Page

11-1.

Table

11-1,

Components of the Interdependent Grain System . .................256

Fundamental Policy

Table

Page

Alternatives. . . . .............................257
Chapter 11

Policy Options for

Enhancing Grain Quality

Grain quality is influenced by numerous

highly interdependent features of the U.S. grain

marketing system, including variety development, production, handling, and merchandising. Trade throughout the system is facilitated

by a set of grain standards, and those involved

in the market channel respond to incentives and

disincentives established for quality characteristics. Much of the policy debate on U.S. grain

quality has focused on grain standards, but they

are only one of many policy and regulatory

alternatives that influence quality. Quality must

be thus viewed as part of an integrated system

focused on delivering the optimum quality for

each domestic and foreign user. The interdependence of the system means that more policy alternatives exist than are traditionally considered and that changes in any one part of the

system will have impacts elsewhere.

The first section of this chapter on policy

alternatives briefly describes the problems identified during this assessment. The second section discusses the interdependence of the grain

system, and identifies a number of policy alternatives and their implications.

The system for marketing grain in the United

States has a number of important characteristics that affect quality. The handling (including export) and transport industries are highly

competitive, with relatively limited government

intervention. One important principle throughout the system is decisionmaker sovereignty:

Producers plant varieties that are perceived to

be in their best interest; users (domestic and

importers) specify and purchase qualities, given

a range of alternatives and prices, that are in

their interest; handlers and exporters condition

and move grain in their own interest. Each decision assumes the sovereignty of the individual decisionmaker and is based on incentives

and disincentives reflected in market premiums

and discounts for quality characteristics.

fundamental Advantages of the

U.S. Marketing System

In comparing the grain systems of other exporting countries (see ch. 10), several fundamental advantages of the U.S. marketing system are clear in addition to those discussed in

chapter 2. At the risk of simplification and with

the intent of being general, five broad advantages are identified that encompass several

others.

1. Efficiency

The U.S. marketing system performs a number of complex functions—assembling, handling, conditioning, and allocating different

qualities to domestic buyers in many locations

for export from a multitude of ports. Indeed,

the quantity of grain produced, the many differences in qualities produced at different locations, and wide-ranging locations of end-users

and ports all mean that the U.S. marketing system is more complex and performs more challenging functions than the systems of any other

exporter. Yet the grain handling and transport

system is more efficient than that of nearly all

other countries. Efficiency is used here in the

context of cost (or inputs used) in performing

the necessary marketing activities. Efficiency

and competition assure lower marketing margins and higher prices to producers.

20 Productivity Growth

Plant breeding in the United States is relatively unfettered, compared with other coun251
252

tries, in terms of regulations over variety development and release. Success of a variety is

ultimately determined by the market for seed

stocks. Producers make choices in response to

market incentives. Where comparisons are appropriate (e.g., in wheat), productivity growth

as measured by yield exceeds that of most other

exporting countries, with the exception of

France. Productivity differences are affected

by a multitude of factors including environment, soils, other inputs, relative prices, institutions, and policies. Thus it is impossible to

attribute yield differences to the institutional

environment affecting varieties, but growth

rates are influenced by variety release procedures.

3. A Wide Range of Qualities

Compared with other countries, a wider

range of intrinsic qualities is available in the

United States, particularly for wheat. This is

obvious given the class differences in wheat,

which are facilitated by production regions of

differing environments and soils. There is also

a wider range of physical and sanitary quality

in the United States. Although this is an advantage in that more alternatives are available to

buyers, some at lower costs, it maybe viewed

as a disadvantage in the sense that “reputation”

is affected. The uniformity problem discussed

later in this chapter is a direct result of the multitude of qualities available. In addition, given

the lack of controls in the system, the multitude of qualities requires expertise on the part

of importers if they are to fully benefit from

the wide range.

4. Grading and Inspection System

The grading and inspection system in the

United States provides grade determination by

an independent government agency (i.e., one

not having financial stakes in the transaction).

The factors and limits in factors in the grade

standards are relatively stable across crop

years—e.g., No. 2 corn does not change from

year to year. Similarly, the definition of No. 2

Hard Red Winter wheat does not change in the

grain standards, although intrinsic differences

not measured in the standards may change.

This is not necessarily the case in exports from

other countries. Major changes cannot be implemented in less than a year after they are mandated. Some other exporting countries adjust

factor limits with each crop year.

5. Market-Determined Premiums

and Discounts

In all countries, premiums and discounts

and/or regulations are used to provide quality

incentives to market participants. Those in the

United States act through the interaction of the

supply and demand for measurable quality characteristics, i.e., the market for quality characteristics. Consequently, values of quality characteristics in the United States perhaps reflect

the true values better than do the premiums and

discounts administered by government agencies of several other exporters, with the notable exception of France. Efficient determination of these price differentials is important

because these essentially allocate grain across

end-users and provide signals throughout the

production and marketing system. Through

these differentials the system responds to needs

of the market.

This assessment identified a number of important general problem areas that must be considered when discussing policy alternatives.

Genetics and Variety Release

An inverse genetic relation often exists between yield and important intrinsic quality

characteristics in each of the major grains. In

the case of wheat, this relationship is well recognized between yields and protein quantity,

and a similar situation exists in corn and soybeans. Breeding programs generally aim to improve yield and disease resistance and satisfy

apparently desirable intrinsic quality goals. In

the case of corn, breeders have always sought

to increase yield and improve harvestability,

with intrinsic quality not being a priority. In

many cases yield is emphasized because intrinsic quality characteristics, though important,
253

are not measured in the market. Incentives

therefore are not transmitted through the market as readily as those associated with agronomic characteristics such as yield, disease resistance, and harvestability.

Individual breeders or their institutions exercise tremendous discretion regarding release

of varieties, However, this discretion is tempered by the market system, which determines

the success of any release. Market efficiency

requires measurement of relevant intrinsic

quality characteristics, which is absent in many

cases. For example, a variety with lower yield

but an improved intrinsic characteristic (e.g.,

bake test) that cannot be measured in the marketing system would fail to survive in the seed

market. Current variety release procedures are

not applied uniformly across States (or firms,

in the case of private breeding) or over time.

No effective national policy on variety release

assures uniformity in application of release criteria. In the case of wheat, in which public

breeding is more important, the State Agricultural Experiment Stations maintain variety release procedures that are in turn guided by the

Experiment Station Committee on Organization and Policy. Individual States may and do

vary from this policy. Ultimately a particular

class of wheat, corn, or soybeans produced in

different parts of the Nation may differ in intrinsic quality.

Grain Standards

The current U.S. grain standards have four

important limitations:

1. they create incentives for practices inconsistent with good management and efficiency;

2. they fail to identify many of the characteristics related to value in use;

3. they fail to reward producers and handlers

for improved drying, harvesting, handling,

and variety selection; and

4. grade limitations on many factors are arbitrary, do not always reflect real differences

in value, and in some cases are not consistent with statistical principles.

No standard can be perfect, and any revisions

must consider trade-offs. To move toward an

ideal system, changes in grain standards should

focus on grade-determining factors, non-gradedetermining factors, and definition and measurement technology for official criteria. (Each

of these, as well as their interrelationship, is

described inch. 8.) Such a system would entail

minimal interference yet allow for improved

efficiency in the market.

Buyers’ Attitudes Toward Quality

As part of this assessment an extensive survey was conducted of grain buyers’ attitudes

toward quality, grain standards, and merchandising practices. Several general findings are

important. First, all buyers, but particularly

those outside the United States, indicated that

uniformity between shipments was a problem

(i.e., uniformity in intrinsic quality). As processing technologies become more sophisticated,

uniformity will become more important. Second, in the case of wheat, nearly half the foreign buyers relied on imports because of the

inadequate quality of domestically produced

wheat; wheat from all other exporters was preferred at equal prices to similar types of U.S.

wheat. Third, buyers thought that the standards

for wheat, corn, and soybeans were inadequate

and did not accurately describe the underlying

shipment. Fourth, no one set of quality attributes meets the demands for each product of the

grain system.

U.S. Farm Policy

Two important features of U.S. farm policies

have an impact on several aspects of quality.

Because of the inverse relation between yield

and intrinsic quality, the target price program

in wheat (and to a lesser, or less identifiable,

extent in feed grains) has a negative long-term

impact on intrinsic quality in conjunction with

price differentials less than those of the market. As the target price typically exceeds the

market price, farmers have an incentive to expand yields. Impacts vary by grain and region,

depending on the extent of the inverse relation

between yield and intrinsic quality. The effect

had been exacerbated by previous farm bills
254

that used different methods of determining

yield. The total impact in the case of wheat has

been to force market premiums for wheat protein to relatively high levels in order to neutralize producers’ decisions.

Administration of the loan rate program also

has an impact on intrinsic quality, as well as

on physical and sanitary quality. In particular,

the market for measurable quality characteristics is distorted because premiums and discounts on forfeited grains, particularly wheat,

are less than those determined in the market.

Poorer quality grain is put under storage, and

market differentials are depressed.

Changing Role of Demand

The international wheat market is more differentiated today than at any time in the past

25 years, a reflection of the divergent nature

of end use and the intensity of exporter competition. Unique preferences were identified

in the OTA survey across types of wheat, suggesting homogenization would be counterproductive. In general, demand has shifted toward

higher protein and soft wheats. An important

related problem in international wheat competition is that the market premium for protein

has increased substantially in recent years. This

has caused a number of difficulties in the marketing system (due to measurement and uniformity problems), and has affected international competition. Specialization and

sophistication in corn and soybean processing

have also opened new markets with more exacting quality requirements.

Competitors’ Policies

Major differences exist in the institutions, policies, and trading practices in other grain exporters marketing systems. The extent of market intervention varies from highly regulated

throughout (e.g., Australia and Canada) to partial or no regulation. Differences also exist in

procedures for variety development and release, the use of variety identification in the

marketing system, and the use of grain receival

standards. In addition, a number of countries

address grain quality problems as part of their

effective agricultural policy variables. At least

for wheat exporters, the quality at first point

of sale is more extensively controlled than in

the United States. The wheat from these countries is now probably preferred over U.S.

wheats at the same price due to these mechanisms.

POLICY OPTIONS

A number of policy alternatives are available

to address these problems. Their overall purpose is to create a policy environment that enhances grain quality. As discussed, the U.S.

grain production and marketing system is

highly interdependent, and policies focused on

any one sector affect other sectors to differing

extents. This section analyzes a number of specific policy alternatives in the context of the

interdependence of the system. Alternatives

can range from regulation to reliance on the

market.

Market Solutions and Regulations

A properly functioning market system can

solve many of the apparent problems in quality. To do so, however, appropriate information

must be provided so that relevant incentives

and disincentives can develop. A fundamental policy alternative is to create an environment that would improve the ability of the market to identify and allocate grains of differing

qualities to the highest value use.

The market for different quality characteristics drives the multitude of individual decisions

that affect quality from seed to end use.

Through the market for quality characteristics,

price differentials develop that provide incentives and disincentives for participants throughout the system. An important aspect of this market is that premiums and discounts, and

therefore incentives and disincentives, develop
255

for important measured characteristics. Bargaining and contracting for quality specifications occurs throughout the system, explicitly

or implicitly, between buyers and sellers.

Premiums and discounts are built into contracts, reflecting marginal valuations of the participants, and limits are frequently included

beyond which the shipment would be unacceptable. Thus, fairly fluid implicit markets (i.e.,

premiums and discounts) exist for characteristics such as protein quantity in wheat;

damaged kernels, dockage, moisture and broken corn/foreign material in corn; and damaged

kernels in soybeans. These reflect marketdetermined values of these characteristics. Less

is known about other unmeasured quality characteristics (intrinsic or otherwise), and the market is not necessarily capable of reflecting end

values in underlying prices.

The important point is how the market works,

through premiums and discounts, and that it

works efficiently only for easily “measurable”

(and verifiable) characteristics. This poses the

fundamental problem in that not all items of

importance in end use are easily measurable

in the marketing system. In fact, as discussed,

few intrinsic characteristics are included in the

standards. Instead, proxies are often used that

are less than precise. Domestic buyers can make

purchases by location, or by region, an alternative not easily exercised by foreign buyers.

The problem is lessened somewhat to the extent that variety release procedures use quality tests that are important but that are not used

in the marketing system.

An alternative to market solutions would be

to impose regulations, which could very well

solve many of the perceived quality problems.

But regulations impose costs on the system,

which due to the competitiveness of the marketing system are passed back to producers in

the form of lower prices and/or to users in the

form of higher prices. Higher costs associated

with regulation would not be absorbed by the

handling system. In other words, regulations

impose costs on the system that buyers maybe

unwilling or unable to pay for in the form of

higher prices. Wheat cleaning provides a classic example: To impose regulations across all

participants in a marketing system such as that

in the United States would violate the important principle that market participants can

specify the cleanliness they want. Regulations

therefore control the process and limit the range

of qualities available, in contrast to a market

where “anything goes” if buyer and seller agree.

Although all buyers may prefer a particular

characteristic, all may not value it sufficiently

to absorb the higher cost. Consider wheat dockage, for example. On the supply side, cleaner

wheat can be produced and exported, as in

other countries, by imposing regulations. Endusers all prefer cleaner wheat but their reservation values—or willingness to pay—differ.

Wheat millers in the United Kingdom, for instance, may have a high reservation value for

clean wheat because they have to pay a Variable Import Levy on dockage equal to that of

wheat. Or buyers with high per-ton transport

costs or the need for extended storage (the costs

of which increase with dockage levels) would

have high reservation values for clean wheat.

On the other hand, wheat importers with low

transport costs and/or high resale prices for internal feed grains (an alternative use for wheat

cleanings) would have low reservation values

for clean wheat. In a competitive market, the

distribution and allocation of the measured

characteristic can easily be illustrated. Each

buyer would have alternative contract specifications reflecting individual marginal reservation values. Buyers would specify contract

limits by appropriately evaluating their values

with the price differentials in the market.

Imposing a regulation on a quality level for

all shipments has two general implications,

First, the limit would have to be imposed on

all shipments to preclude buyers with low reservation values from downgrading their specifications. Second, the result would be a higher

overall price level, unless the cost were absorbed by lower producer prices, and some

buyers with low reservation values would be

excluded from the market.

One of the overall purposes of quality certification is to facilitate trade and to assure

buyers of quality. Indeed, U.S. grain standards
256

provide measures of physical quality and to

some extent information to facilitate trade on

those dimensions of quality. But, as noted, the

quality of some grains regarding some intrinsic and sanitary characteristics is not necessarily resolved in the grain standards. Buyers’

true preferences are for intrinsic characteristics such as loaf volume (bake test), farinograph

measures in wheat, and oil and meal content

in soybeans. None of these is measured in the

marketing system for technical and institutional

reasons. True performance cannot be assessed

until after the purchase, and in many cases until use. As a result, buyers make purchases based

on expectations of intrinsic quality that reflect

reputation. Thus, it would be desirable to have

a low variance with respect to these immeasurable intrinsic characteristics—resulting in

more reliable expectations.

Information with respect to these quality

characteristics is one-sided: Typically the seller

has more information about quality than the

buyer does at the point of negotiation. As an

example, producers know the variety at the time

of sale, but it is not revealed. Handlers know

the extent or components of the blend, or the

extent of conditioning, and this information is

not revealed either.

This level of informational uncertainty provides an economic justification in general for

sellers to provide certificates of quality. The role

of certification is to reduce uncertainty for

buyers, and therefore to facilitate trade. Traditionally certification via the grain standards is

largely on physical, and somewhat on sanitary,

characteristics. However, this is not the case

with respect to important intrinsic characteristics. Thus one of the purposes of certification

is elimination of uncertainty about quality, not

only physical, but also sanitary and intrinsic.

Accurate and relevant information therefore

allows buyers to make purchases without conducting extensive testing, which would reduce

liquidity of the market. As a result trade is facilitated, and transaction costs are reduced. One

of the mechanisms to reduce this informational

uncertainty is the grain standards. Others include controls earlier in the grain production

system, such as variety release criteria. The

impetus of these controls in a number of other

countries is to reduce quality uncertainty in

dimensions not easily measured by standards.

Interdependence of the

Grain System

The interdependence in the production and

marketing system with respect to quality is illustrated in figure 11-1. This triad could be

viewed as a three-legged stool, with each leg

having an impact on quality as well as on the

overall system. Producers make varietal and

agronomic decisions in response to incentives.

These, as noted, are also influenced by farm

Figure 11-1.-Components of the Interdependent

Grain System

I

. Plant breeders’ objectives I ● Release criteria and

procedures

Market for quality characteristics

● Producers

– Variety selection

– Cultural practices, harvesting, handling

– Farm programs

● Handlers and merchants

– Condition and handle

– Contract/trade

● End-users

– Foreign competition

– Domestic production

– Products produced

SOURCE: Office of Technology Assessment, 19S9
257

programs. The demand for characteristics is

influenced by end-use needs and foreign competition. Merchants and handlers procure, handle, condition, and blend to meet contract specifications. In addition, they make offers on what

they can sell, and at what price differentials,

based on the availability of quality characteristics and their conditioning capabilities. Each

of these activities are influenced by the incentives established in the market, by trading rules,

and by grain standards. Blending to the factor

limits specified in the standards is one example of this interaction.

Fundamental Policy Alternatives

The interdependence of variety development,

the market for quality characteristics, and grain

standards must be recognized in the evaluation

of policy alternatives with the objective of a

more integrated relationship between policies.

A number of other exporting countries have

more integrated and better coordinated policies

than those of the United States. In fact, the

United States has made no effort to coordinate

and/or integrate policies affecting these activities. Policy interventions could be focused on

any of the components of the system, but assessment of their effectiveness must include impacts elsewhere in the system. Any policy on

grain standards, for example, will affect variety development and the efficiency of the market for quality characteristics. Similarly, any

policy affecting the market (e.g., incentives) will

have an impact on variety development and

grain standards. The inability to measure intrinsic characteristics in grain standards has

implications for policies affecting the market

and variety development.

Policy cannot affect numerous phenomena

that influence quality, such as weather, and a

number of policies are short-run and only treat

symptoms of the problem. The policies developed here aim to affect underlying causes of

the problem, which over the long term will result in improved quality. They are limited to

the three general categories of variety controls,

market intervention, and grain standards (see

table 11-1). The policy alternatives have been

narrowed to these three to focus on those that

appear to be most logical and likely to be effective in the long run. Only selected alternatives

are presented in each category; in reality, a continuum of alternatives is likely, rather than having discrete choices as shown in the table.

Just as there is an interdependence in the system, the policy alternatives must interact. Controls over variety identification and release improve the efficiency of the market, and have

the potential to act as a surrogate for intrinsic

measures in grain standards. If variety release

were controlled, there would be less of a need

to measure intrinsic performance in the grain

standards. Instituting incentives can also act

as a surrogate for control of both intrinsic

and/or physical and sanitary quality characteristics. In addition, depending on application,

instituting incentives can indirectly spur variety development. By the same token, policies

applied to grain standards affect both the market and variety development. Should intrinsic

quality characteristics be measured in the grain

standards, the market would establish incentives, which would be transmitted to producers and to variety development. If such characteristics are not measured, alternative

mechanisms should be used. As mentioned, in

Table 11-1 .—Fundamental Policy Alternatives

Variety controls Market intervention Grain standards

No change Marketing board Mandatory USGSA inspection

Variety identification) Export bonus Single agency to approve testing

categorization No change in loan policy Mandatory USGSA inspection in conjunction

Variety licensing Increased differentials in government with NIST equipment approval

policies

Minimum quality specifications for

farmer loans

SOURCE: Office of Technology Assessment, 1989
258

most other exporting countries, the policies

across these three sectors are coordinated and

viewed systematically.

Variety Controls

Three important considerations lead to the

policy alternatives listed under variety controls.

First, with few exceptions grain standards do

not measure important intrinsic characteristics.

Second, intrinsic quality differs significantly

across some varieties. Third, varieties are not

visually distinguishable, thus segregation in the

market system is precluded, resulting in increased uncertainty about quality. These three

points apply to some extent to each of the

grains, though their relevance—and thus the

attractiveness of each alternative—varies. The

classic case is that of wheat, in which performance varies across varieties and increasingly

it is becoming difficult to differentiate wheats

in the marketing system. In some of these cases

it may be easier to identify variety, or groups

of varieties, than intrinsic characteristics. Further, identity of a variety provides more comprehensive quality information than any subset of measured quality characteristics. To some

extent, domestic processors attempt to resolve

problems of varietal differences by purchasing

by location or region. But foreign buyers, or

any buyers using purely grade specifications,

are precluded from this option.

No Change.—Five main effects of leaving the

variety control system unchanged can be identified:

●

●

Continued lack of uniformity in intrinsic

quality characteristics among States/regions/shipments. In the current system

with only informal, uncoordinated variety

release criteria, many basic characteristics

vary among varieties, These characteristics lose their identity in a market incapable of measuring end-use characteristics.

As a result there are important intrinsic

quality differences across regions of the

country that are not detected in the marketing system.

Problems elsewhere in the system due to

the inability to measure intrinsic quality.

●

●

●

In particular, greater pressure would be

placed on grain standards to measure intrinsic quality within the marketing system.

Continued lack of information on intrinsic quality in some grains, and thus of current inefficiencies in the market.

Productivity growth facilitated to a greater

extent by having complete freedom on variety release and selection.

Buyers seeking consistent intrinsic properties purchasing from exporters with less

diversity.

With no change from the current system of

administering variety release, the pressure on

grain standards to introduce measures of intrinsic quality would increase. Other countries

use variety identification and release procedures in part to reduce pressure on the grain

standards to measure intrinsic quality. Alternatively, by incorporating intrinsic quality into

farm program policies (discussed later in this

chapter), at least some incentive to improve intrinsic quality could be built into the system.

Variety Identification and Categorization.—

Any sort of variety identification or control

scheme would pose administrative challenges.

One alternative would be to provide a mechanism (which does not currently exist) in which

varieties can be identified in the market system, as done in other exporting countries. These

consist of affidavit systems, random testing

using electrophoresis, and categorization. Producers would declare the variety at the point

of first sale or loan application. This would provide information to handlers on segregation

based on categories of the grain, or groups of

varieties. Categories would be developed according to end-use similarity, and could become

part of the grain standards.

Alternatively, variety or groups of varieties

could become part of the contract governing

the transaction, as in France. The number of

categories established would vary by grain, depending on the three considerations discussed

earlier, and the end-use specificity. Thus, for

example, if there were only one end use and

the varieties did not vary sufficiently with respect to intrinsic quality, only one category
259

would be necessary. On the other hand, for

wheat with intrinsic differences across varieties

and a multitude of end uses, there would be

a larger number of categories. The intent here

would be to formalize a mechanism not dissimilar from the current system of classification for

wheat. The difference, however, is that the current system relies on visual distinguishability,

and categorization is based on fairly imprecise

criteria.

The implications of such a categorization system include:

●

●

●

●

An increase in information (by category of

varieties), thus increasing the efficiency of

the market in its allocative role. For most

grains, variety is a better indicator of quality than are selected tests for quality. Thus

buyers’ information regarding quality would

be improved.

Improved signals transmitted to producers, breeders, and end-users through a

more efficient market.

A complex administrative program, especially given the large number of varieties

currently grown in the United States.

Administration would be further complicated by the fact that intrinsic quality depends not only on variety, but also on location and climatic factors.

More complex contract specifications. The

informational requirements, particularly

of foreign buyers, for contract specification would increase. Depending on the extent of categorization, however, this complexity could be reduced.

Introduction of a variety identification

scheme would result in incentives and disincentives being readily associated with varieties

having desired/undesired intrinsic characteristics. In addition, it would reduce pressure on

the grain standards to measure intrinsic performance in the marketing system, as categorization of varieties would serve that function.

Variety Licensing.—A more restrictive approach would be to institute a variety licensing scheme. Varieties would be subjected to criteria administered at a national level for release

into the market system. Licensing takes various forms in different exporting countries, from

quite restrictive, as in Canada and Australia,

to fairly neutral, such as the system in France.

The intent of each though is to provide some

mechanism that assures certain intrinsic characteristics (given that they cannot be easily detected in the market system) and to apply uniform criteria throughout the country, i.e., to

reduce uncertainty of intrinsic characteristics

through uniform application of release criteria.

The program would require procedures similar to those of the variety identification system

just described above. In addition, some criteria

would have to be established for categorization

(i.e., to license varieties by end use), and for

administration.

Five effects of such a system can be identified:

1.

2.

3.

4.

5.

increased uniformity, and an increase in

the ability to control intrinsic quality;

a formal mechanism for categorization

relative to a simple variety identification

scheme;

depending on administration, a feeling of

restrictions on productivity growth, although this is not necessarily the case, e.g.,

in France;

difficulty in administration, with complex

enforcement, bureaucracy, and cumbersome implementation; and

licenses by location, due to differences in

quality, and by end use.

A stricter variety licensing system would have

similar impacts on interdependence discussed

under the preceding alternative policy. In particular, licenses could act as surrogate grain

standards for intrinsic characteristics.

Market Intervention

Marketing Board.—Central to the U.S. system is the market in which prices are established. Embedded in this market, and all prices,

are premiums and discounts for measurable

characteristics that serve to allocate grain

across different users. In addition, these quality characteristics provide the incentives and

disincentives for participants throughout the

marketing system. Several other countries accomplish this by some form of board control.
260

Thus, one alternative in the United States would

be to establish a marketing board system to resolve quality problems. The emphasis of the discussion here is on the implications of such a

system for quality and the coordination of policies on quality. Other effects of a marketing

board are more far-reaching (e.g., bargaining

power, resource allocation, impacts on nonboard grains, and impacts on physical coordination) and are not discussed. The major implications of a board with respect to quality are:

● Coordination of the many aspects of the

production and marketing system that have

an impact on quality.

● Improved quality to the extent that only

two transactions—one between producer

and board, and another between board and

buyer–would take place in the marketing

system. This is in contrast to the multitude

of current transactions, all requiring measurement of quality.

• More subjective and judgmental administration of price differentials, since transactions would take place without an active

market. Market determination of price

differentials is an important advantage of

the current U.S. system.

● High cost, given the complexity and

breadth of the U.S. marketing system.

Countries that already have boards operate in relatively simple logistical systems,

and cover few grains. As either of these

increase, as they do in the United States,

the problems associated with bureaucratic

allocation of decisions intensifies.

● Loss of the highly efficient U.S. grain handling and distribution system that stems,

in part, from the competitive environment.

A board system could reduce the emphasis

on grain standards at the point of export, and

for that matter throughout the system, if sufficient controls were imposed early in the system to resolve grain quality problems, thereby

reducing the importance of quality measurement at the point of export. In addition, variety release procedures could be easily administered in a board system. Incentives could be

administered rather than relying on market determination.

Overall, however, the costs of introducing a

board system in the United States would likely

outweigh the benefits of quality improvements.

Export Bonus.—An alternative policy would

be to establish a bonus payable to exporters who

deliver quality superior to contract specifications. This policy is discussed as being applied

at the point of export, but it could be applied

elsewhere in the marketing system. The major

implications of this approach are:

●

●

●

●

●

Immediate results, especially if the program were tied to a physical or sanitary

quality characteristic. However, longevity

should be a concern, in that if terminated,

the effects would not likely last.

Administrative questions. First, which

quality characteristic(s) should be tied to

the bonus—physical, sanitary, or intrinsic?

Quality would improve on whatever characteristic the bonus were applied to. Depending on the length of the program, however, the bonus would likely not influence

intrinsic quality. Second, should the bonus

be applied at the point of export, or the

point of origin?

The cost of administration, and/or a direct

outlay, to finance the program.

A risk that importers may manipulate the

system by specifying a lower grade, in order to receive the same grade they traditionally purchase, but at a lower price.

An increase in perception of quality, or of

attention to the issue.

An export bonus program, by definition,

would be oriented to the merchants and handlers in the system. It would provide incentives

for them to improve the quality of particular

attributes or particular shipments to which the

bonus were applied. Due to competition within

the industry, any benefits would be distributed

to appropriate decisionmakers so as to provide

incentives. Given that more information would

not be provided to the market, and that information uncertainty would not be reduced, the

efficiency of the market would not be improved.

Breeders’ objectives and release criteria would

be affected only to the extent that the bonuses

were applied to intrinsic characteristics, and
261

to the extent they were applied over very extended time periods.

No Change in Loan Policy.—The current

administration of the policy on loan forfeitures

and Commodity Credit Corporation (CCC) grain

storage policies could remain the same (see ch.

9). The fundamental problem is that price differentials for loan forfeitures and transactions

on CCC-owned grain are substantially less than

those in the market. Implications of no change

from the current status are:

● A distorted market for quality characteristics. The loan and CCC storage practices

would continue to support the price of

lower quality grains. In addition, the intrinsic, physical, and sanitary quality of

U.S. grain would be unchanged.

● Grain under extended storage, which

would potentially deteriorate more than if

grain of superior physical and sanitary

quality were stored.

● Growers isolated from the market, which

masks the incentives for improving quality.

In general, the market today is distorted in

the allocation between storage and commercial

sales, with superior-quality grain going to the

latter. Since the program does not effectively

distinguish intrinsic quality, loan rate disincentives do not transmit signals to producers. Thus,

a major impact of not changing the policy

would be to increase the role and function of

grain standards in measuring quality.

natively, farm policy could take the lead by

providing price differentials at least equal to

market differentials, to provide incentives

throughout the system.

As discussed in chapter 9, CCC administers

programs for handling and storing CCC-owned

grain. Different rules are applied to country and

terminal elevators. CCC requires that terminal

elevators deliver the quality that is represented

by the warehouse receipts, and it discounts individual railcars. CCC does not pay terminal

elevators for overdeliveries in quality. This is

not the case for country elevators, which are

not subject to the same rejection rules if the

quality delivered is inferior to the warehouse

receipts and which receive payment for overdeliveries.

One of the few ways to legislate incentives

into the system, particularly for intrinsic quality, is via the price differentials for loan forfeitures and transactions involving CCC-owned

grain. This alternative consists of loan-associated price differentials greater than or, alternatively, equal to the market. They could be applied as currently done, on grades, or could use

specific physical and sanitary quality criteria.

A simple example would be a 4 cents/bushel

price differential for clean wheat (i.e., less than

0.5 percent dockage). In addition, measures of

intrinsic quality (e.g., falling number in wheat,

oil content in soybeans, protein content in corn)

could be incorporated, as they are in other

countries.

Increased Differentials in Government Policies.—In a number of other countries quality The implications would be as follows:

problems are addressed as a matter of agricul- ●

tural policy. These take the form of incentives

by using regulations and substantial premiums

and discounts for quality deviations. Realigning the incentive system via farm policy addresses one component of the system, i.e., the

market for quality characteristics. That market already exists and develops premiums and ●

discounts. But it is distorted somewhat by

administration of the farm program. Thus, this

policy alternative could be seen as merely eliminating a distortion, which would allow the

market to function more efficiently. Alter- ●

A greater impact on wheat than other

grains, because the relationship between

market prices and loan values varies across

grains and because participation rates

vary. In addition, the impact itself would

vary, due to the loan being effective only

periodically.

Grain of lower value being forced onto the

market, as opposed to going into the loan

program, as it currently does. This implies

also that the loan program would support

prices of higher quality grains.

An increase in the amount of grain going
262

●

●

●

●

into alternative uses, with lower end value.

The most vivid example is wheat feeding.

Incentives for intrinsic quality relatively

easily incorporated into the loan program

(more easily, that is, than measuring them

in the marketing system).

The development of a mechanism for

measuring quality of grain going under

loan, perhaps through samples submitted

by farmers.

Difficult administration of optimum price

differentials. This is especially true given

the large number of markets in the United

States, and given that—at least in the past—

loans have to be announced long before

crop quality is realized.

Country elevators forced to become more

concerned with maintaining quality. Also,

CCC would be guaranteed that the quality

of grain received into the country elevator

would be delivered out of the elevator. This

change in policy would relieve the pressure of maintaining discount schedules

that reflect the market in that CCC would

not accept quality below that called for by

warehouse receipts.

This particular alternative addresses the market for quality characteristics and provides incentives in an important market for some

grains. Such a change could have a number of

systemwide benefits. First, to the extent that

intrinsic characteristics are used, variety development would be favorably affected. Signals

from this important market would be directly

transmitted to breeders and would affect their

objectives and release criteria. Thus it would

provide somewhat of a surrogate for variety

control. Second, there would be somewhat reduced pressure to measure intrinsic quality in

grain standards. In the extreme of a proactive

farm policy, together with variety identification/licensing, the role and function of grain

standards could to some extent become one of

measuring only physical and sanitary quality

characteristics.

Minimum Quality Specifications for Loans. —

Many countries have minimal receival standards on grain entering the marketing system.

Normally grain marketing is integrally related

to prices and policies (e.g., initial payments) and

therefore it is difficult to isolate physical marketing from pricing. As developed here, minimum quality specifications would be applied

to grain entering the loan program as opposed

to when it entered the marketing system. The

global application of minimum quality specifications to the U.S. marketing system would

be next to impossible to implement since a

majority of grain under loan is stored on farms.

The concept of setting minimum quality specifications for loans is similar to the option just

discussed except that a constraint, rather than

a price incentive, is being used for entry into

the loan program. Minimum quality specifications could be applied to physical characteristics (e.g., minimal dockage) or intrinsic characteristics (e.g., variety, protein, falling number,

oil, or meal protein).

Under this policy alternative, the potential

exists that grain not meeting specifications

would be diverted to the export market or a

lower valued market. One way to help minimize diversion to the export market would be

to use whatever quality specification has been

established for government programs as a basis for rejecting grain going into an export elevator. This would have the added benefit of reducing the spread of qualities available for

blending within the export elevator; however,

blending of wide ranges in quality would still

occur in country/terminal facilities. As discussed in the next section of this chapter, mandatory inbound inspection into export elevators could serve as the basis for rejecting or

accepting grain.

The first five implications of increased differentials in government policies would also

apply to this alternative. Other implications are:

●

●

Minimum quality specifications, which

would be difficult to establish and maintain in the current political environment.

Desirable quality characteristics incorporated in the loan program. These could also

be characteristics not easily measured in

the marketing system.
263

● Depending on the minimum quality specifications (physical, sanitary, intrinsic, or

variety), a requirement for farmers to certify the variety planted or take samples of

stored grain for testing as directed by the

U.S. Department of Agriculture (USDA).

Use of minimum quality specifications could

also solve or contribute to the resolution of problems elsewhere in the system. Desirable varieties or intrinsic characteristics, if used, would

transmit signals to breeders, influencing their

objectives and release criteria. In addition, to

some extent, the role and function of grain

standards in measuring intrinsic quality in the

marketing system could be reduced.

Grain Standards

The United States Grain Standards Act

(USGSA), states that it is Congress’ intent to

promote the marketing of high-quality grain to

both domestic and foreign buyers and that the

primary objective for grain standards is to certify grain quality as accurately as practicable.

Embedded in this policy are four basic objectives for grain standards:

1. to define uniform and accepted descriptive terms to facilitate trade,

2. to provide information to aid in determining grain storability,

3. to offer users of such standards the best

possible information from which to determine end-product yield and quality, and

4. to provide the framework necessary for

markets to establish grain quality improvement incentives.

Chapter 8 assessed the ability of the grain

standards to meet these objectives. In several

areas the current standards fall short. However,

an ideal grain standard that encompasses all

four objectives may be difficult to achieve, and

trade-offs between objectives may be necessary.

The criteria for standards laid out in chapter

8 in terms of the number of grades and what

should constitute grade-determining, nongrade-determining, and official criteria provide

a framework for incorporating the four objectives into grain standards.

The grain standards, if modified along these

lines, would facilitate trade by providing a

limited number of grades and grade-determining factors. Incorporating some factors as nongrade-determining or even official criteria allows the market to set values for these factors

that will send signals throughout the system for

quality improvement, if warranted. To a limited

degree, this structure will provide information

important to end-users, who will establish the

limits that best suit their needs. Until new technology is developed for measuring intrinsic

quality and several sanitary quality attributes,

however, the standards cannot begin to reflect

many of the objectives.

To comply with the objective of certifying

grain quality as accurately as practicable, the

USGSA provided several legislated mandates.

First, it authorizes the Federal Grain Inspection Service (FGIS) Administrator to establish,

amend, or revoke standards whenever their

usage by the trade may warrant or permit. Second, whenever standards are in effect, the

standard must be used to describe the grain being sold in interstate or foreign commerce.

Third, the FGIS Administrator is authorized to

provide for a national inspection system. Finally, whenever standards are in effect, the

grain must be inspected by FGIS as it is being

exported from the United States. As pointed

out in chapter 8, even though the standards

must be used to describe grain being sold overseas, no requirement exists for inspecting grain

moving in domestic markets. Therefore grain

can move domestically without inspection and,

when inspected, can be checked by FGIS or a

FGIS-licensed inspector, private inspection

companies, individuals employed by a grainhandling facility, or individuals licensed by the

Warehouse Division of USDA’s Agricultural

Stabilization and Conservation Service.

Several important ramifications for grain

quality result from this policy. Since no single

agency is responsible for testing grain according to the standards or any other set of specifications, no agency is responsible for developing the equipment and procedures used to

sample and measure these factors or for over-
264

seeing the equipment, methods, and accuracy

of results. For the market to properly assess

premiums and discounts for quality characteristics, testing results for these attributes must

be measured as accurately and consistently as

measurement technology will allow. End-users

rely on accurate measurement of important

quality characteristics in purchasing and production decisions, and inaccurate results can

lead to quality complaints and product yield

and quality below expectations. (Ch. 8 describes

the integral components for developing, maintaining, and standardizing testing procedures,

and discusses testing accuracy and sources for

testing errors.)

Since the grain standards serve as the basis

for marketing grain and providing information

on important quality characteristics to all users,

the factors selected for measurement by the

standards are important. Even more important

is the way they are measured and the consistency of measurement. As new tests are added

to the standards, there is no requirement that

the testing technology developed and approved

by FGIS as the basis for the standard must be

used to measure the attribute.

In other instances, no requirement exists for

how samples will be obtained, who will perform the tests, or even whether any test contained in the standard will be performed. Chapter 8 identifies problems associated with obtaining samples and the impact on accuracy

of the type of equipment and amounts obtained.

With regard to obtaining inspection, the recent

inclusion in the wheat standard of the Food and

Drug Administration (FDA) defect action limit

of 32 insect-damaged kernels per 100 grams of

wheat restricts the amount of insect-damaged

kernels in the various grades to a level that coincides with the FDA limits. This change has

caused a decrease in the number of requests

for inspection under the USGSA because many

shipments exceed the FDA defect action limit

and FGIS must report any such cases to FDA.

Therefore, the change has not provided FDA

with the information it requires to act on such

shipments, and wheat that exceeds the limits

is still handled to some degree as it was before

the change.

In addition, the USGSA allows FGIS to use

delegated and designated agencies to perform

inspections on its behalf. Designated agencies

are independent businesses that rely on fees

generated by performing inspections. Since

designated agencies perform inspection services on request, the potential exists for these

agencies to perform less than accurate inspections because of the need to keep their customers satisfied. This places USDA-approved agencies in the same position as independent,

nongovernment businesses whose sole aim is

to satisfy the paying customer.

Other potential conflicts arise from not specifying how the standards will be implemented.

Since inspections on domestic grain shipments

are performed on request, they can also be dismissed. The potential impact on grain quality

is that a request can be dismissed and the grain

shipped if it is discovered during the course

of the inspection that the quality is not up to

specification. For example, if sour grain is

found and reported to the elevator manager during the sampling of a barge being loaded, the

elevator manager can dismiss the inspection

request. If the sales contract calls for an “official grade, ” the manager can call for the barge

to be sampled at rest. In this instance, the portion of sour grain that was previously discovered during loading will be commingled in the

barge and probably not found during sampling.

Several policy alternatives exist for developing a program to reduce the potential for testing inaccuracies and provide consistently accurate results—mandatory USGSA inspection

on domestic grain moving in interstate commerce, the creation of a single agency to approve and oversee testing equipment and procedures, or a combination of these two

approaches.

Mandatory USGSA Inspection.—As noted,

FGIS establishes standards, which includes developing technology to measure the factors contained in the standard. The agency also develops and publishes sampling and inspection

procedures, evaluates and approves equipment

for use during inspection, monitors inspection

accuracy of its employees and licensed inspec-
265

tors, and periodically tests sampling and inspection equipment for accuracy. Therefore, a basic

structure is in place for approving and overseeing all equipment and procedures used for

measuring grain quality characteristics.

. . At one time mandatory inspection was required on all grain moving in interstate

commerce. This provision was deleted from the

USGSA by Congress in the late 1960s because

of the difficulties in enforcing it on truck shipments. It was at that time that the provision

requiring the use of the standards for merchandising grain was included in the USGSA.

The implications of requiring mandatory inspection on interstate grain shipments, including adoption of the best possible sampling technology, are as follows:

●

●

●

●

●

●

a reinforcement of the policy that standards must be used to describe grain being

bought and sold and that the factors covered by standards are tested using approved equipment and procedures as the

basis for the test;

consistency in test results in that identical

procedures are used for each inspection

in the marketplace and are performed by

independent government-sponsored

agencies;

primary responsibility for grain quality

measurement focused on one government

agency;

use of the existing basic framework

through the delegated and designated agencies who already own approved equipment

and have trained employees that use FGISpublished procedures;

applicability to railcar and barge shipments

only, as the ability of delegated and designated agencies to cover the wide areas required to meet the needs of country elevators receiving trucks is severely limited;

and

increased costs associated with obtaining

inspection on grain that would otherwise

not need to be inspected (i.e., grain moving from one facility to another owned by

the same company).

Single Agency to Approve Testing.—As discussed in chapter 8, the National Bureau of

Standards (renamed the National Institute of

Standards and Technology* (NIST)), through

the National Conference of Weights and Measures, standardizes weights and measures by developing specifications for instrument precision and accuracy along with scale tolerances,

and maintains national standards. Currently,

NIST addresses neither grain measures other

than weights nor sampling equipment. In some

instances, individual States have taken it upon

themselves to develop criteria for approving inspection equipment and monitor the equipment

accuracy. (Moisture meters and mechanical

truck probes are prime examples.) In addition,

the grain-industry-sponsored Grain Quality

Workshops recommended that NIST take the

lead in developing and overseeing moisture meter calibrations.

NIST, in consultation with FGIS, could take

the lead in developing and maintaining equipment specifications and maintenance tolerances. These actions could be in conjunction

with FGIS developing new tests to be included

in the standards. NIST approval could be the

basis for approving equipment (including sampling equipment) for use by FGIS when performing inspections and could be administered

by the individual States for testing not performed under the USGSA. Many States currently have agencies responsible for grainhandling facilities (country as well as terminal

elevators) within their jurisdiction. And several

States have already established procedures for

approving and testing moisture meters and

sampling devices. The basic framework is in

place for establishing a central body to approve

and oversee the equipment used in conjunction

with grain quality testing.

The need for standardized testing procedures

for sampling devices, moisture meters, and near

infrared reflectance (NIR) equipment is apparent. As more uses for NIR and other sophisticated tests are found to provide important qual-

*The National Bureau of Standards was recently renamed the

National Institute of Standards and Technology (NIST) with the

passage of the Omnibus Trade and Competitiveness Act of 1988

(Public Law 100-418) as of August 1988.

88-378 - 89 - 10
266

ity information to buyers and sellers, the need

for standardized testing will become more critical, especially on farmer-owned grain at the

country elevator level.

The implications of giving NIST responsibility for approving and overseeing inspection

equipment are:

●

●

●

●

●

●

●

●

Standardized equipment to measure grain

quality attributes that could be traced back

to national standards. Variations in testing results introduced by a wide range of

equipment accuracies is reduced.

Use of only approved equipment to provide testing results, with NIST oversight

to ensure accurate testing.

Use of the existing basic framework. NIST

already has established approval procedures, publishes user requirements, and enforces its provisions through State organizations.

Placing responsibility for approving grain

testing equipment in an agency that does

not have a vested interest in the equipment’s use.

An inability to cover tests that are subjective in nature, such as odor, wheat classing, and determination of damaged kernels.

A lack of experience in basing a national

standardization program on reference methods that are defined rather than proven.

Increased costs for those that have to dispose of unapproved testing equipment and

purchase approved equipment.

Avoidance of the issues of who will use the

equipment and when it will be used.

Mandatory USGSA Inspection in Conjunction

With NIST Equipment Approval.--A policy that

requires mandatory USGSA inspection on

grain moving in interstate commerce and a

broadening of NIST involvement into grain

sampling and testing equipment captures the

advantages of the last two options while minimizing many of the disadvantages.

The advantages of mandatory inspection on

railcars and barges moving in interstate

commerce ensures that consistent sampling

and testing is performed on both subjective as

well as objective factors and that one agency

is responsible for grain testing as well as standards development. The inability to perform

USGSA testing on trucks and at country elevators can be compensated for to some extent by

involving NIST and its related support systems

in the grain-testing area. Even though USGSA

inspection would not be performed, those

groups that do perform testing would be required to use approved equipment and to follow the user requirements spelled out in the

NIST approval. This would be the same requirements that USGSA inspectors follow, since

FGIS would also be using NIST-approved

equipment and user guidelines.

This policy alternative allows country elevators to continue to perform their own tests on

grain received from the farmer, thus reducing

the potential increase in costs associated with

mandatory USGSA inspection. But it would

create more uniform testing since anyone performing grain quality testing will be required

to use NIST-approved equipment and follow

published user requirements. Coupled with the

NIST State support systems already in place

to oversee equipment accuracy and ensure that

user requirements are followed, NIST involvement would provide oversight in areas not previously subjected to it.

Interactions Between Standards,

Variety Control, and Market

Intervention

The policy alternatives outlined in the variety control section address intrinsic quality

characteristics, since physical and sanitary

quality cannot be addressed through such programs. The policy choices discussed in the market intervention section can address the easily

measurable factors for physical and sanitary

quality, and can be expanded to deal with intrinsic quality attributes once technology is developed to measure them in the marketplace.

Each section cited examples of the expected

impacts on grain quality and standards.

In both the variety control and market intervention sections, an option for no change in

present policies has been provided. Such an approach places the responsibility for physical,
267

sanitary, and intrinsic quality solely on grain

standards. For the physical and many of the

sanitary quality concerns, relying on the grain

standards is a relatively simple matter that does

not involve the adoption of new technology. It

involves taking existing factors and applying

the criteria developed in chapter 8. Several factors could be combined (as is the case of foreign material and dockage in wheat, as many

have suggested, as either grade-determining or

non-grade-determining) or factors could be separated (as is the case with broken kernels and

foreign material in corn) to describe quality

more accurately. In addition to rearranging

existing factors into grade-determining, nongrade-determining, or official criteria, fixed percentages could be established for certain factors that transcend all grades (e.g., maximum

level of dockage in wheat or maximum moisture levels in corn and soybeans). Limits for

current factors (e.g., live insects or stones) could

also be tightened.

Making no change to variety control systems

or market intervention has a dramatic impact

on the grain standards, however, in that they

must be able to address the buyer’s desire for

information on important intrinsic characteristics and take the lead in establishing the signals regarding quality for the entire system.

Presently, technology to easily measure intrinsic attributes in the marketplace is not available. If the standards are to be the vehicle for

providing information on intrinsic and many

new sanitary quality characteristics (e.g., pesticide residue), resources must be provided to

develop the technologies needed to accurately

and easily measure them before the market can

respond. It will take years to research and develop new tests that could be put on-line before signals begin to be transmitted back

through the system.

In addition to identifying what factors the

standards should measure and whether factors

are grade-determining, non-grade-determining,

or official criteria, the way the standards are

implemented can also have a dramatic impact

on grain quality. One of the major problems facing the United States in terms of grain quality—

whether physical, sanitary, or intrinsic—is that

all grain, no matter the quality, is accepted into

the system and marketed. This places enormous

strain on the system’s handling and inspection

capabilities and is the cause for most of the

blending controversies. Adding new tests to the

standards or applying the criteria developed

in chapter 8, including limiting the number of

grades, will not resolve the problems associated with blending extremely high-quality with

extremely low-quality grain.

As discussed in chapter 8, limiting the spread

between grades will reduce the opportunity for

blending. On the surface this appears to be a

viable option. But the expected impacts from

such a change assume that the grades being

traded will remain the same. If the spread between grades is reduced and the trading grades

are lowered, the opportunity for blending will

remain the same. Even removing factors from

being considered grade-determining does not

in and of itself remove the incentive for blending. An example of this is provided by the recent change whereby moisture was removed

as a grade-determining factor, forcing limits to

be established in contracts. The change has not

removed the incentive for blending wet and dry

grain in order to meet contract specifications.

SUMMARY AND CONCLUSIONS

The U.S. production and marketing system

is a highly interdependent system of activities.

Any policy designed to enhance grain quality

(physical, sanitary, or intrinsic) must address

this interdependence. Traditional policy discussions, however, have focused on only one

component—grain standards. But a properly

functioning market can solve many of the grain

quality problems. Therefore, a fundamental policy alternative would be one that creates an

environment that would improve market efficiency. In addition, appropriate quality infor-
268

mation must be provided so that relevant incentives and disincentives can be established

to improve market efficiency.

Just as there is system interdependence, there

is interdependence of policy alternatives. Controlling variety release, for example, could improve market efficiency and act as a surrogate

for intrinsic quality measurement. This reduces

the impact of forcing grain standards to measure intrinsic quality characteristics in order to

provide incentives. Market incentives can regulate physical, sanitary, and easily measurable

intrinsic quality characteristics. The market can

provide incentives in variety development

while policies applied to grain standards affect

both the market and variety development.

Given the interdependence of the system, policy could be focused on any one component.

However, if grain quality is truly a result of the

total system, then the success of policy changes

to any one component must be assessed in

terms of this interdependence. If existing policies for variety control and/or market intervention remain unchanged, the entire responsibility for improving quality will be placed on

grain standards. For contrast, policy changes

to variety control will improve the information

for intrinsic quality characteristics needed by

the market and reduce the need for grain standards to shoulder the entire burden.

Policy alternatives for enhancing grain quality have been divided into three general categories for the purpose of this assessment—

variety controls, market intervention, and grain

standards. One possible policy path that maximizes the strengths of the various options as

well as minimizes their weaknesses is to adopt

variety identification/categorization, increase

the differentials in loan policy and specify minimum quality for farm loans, and introduce

mandatory USGSA inspection in conjunction

with NIST equipment approval.

Introducing a variety identification scheme

would improve information on intrinsic quality characteristics, thus reducing the pressure

on grain standards to measure intrinsic performance in the market. For most grains, variety is a better indicator of quality than are

selected tests. The increased information resulting from variety identification would raise

the efficiency of the market, resulting in incentives/disincentives being transmitted to producers, breeders, handlers, and end-users. Variety

identification alone, however, does not address

physical or sanitary quality concerns, so these

concerns must be addressed by other areas.

Removing the distortion created by the current administration of premiums and discounts

for loan forfeitures and applying the same rules

to country and terminal elevators storing government grain would allow the market—which

has already established premiums and discounts—to function properly. Grain of lower

value would be forced onto the market as opposed to entering government programs. To the

extent that intrinsic quality characteristics are

included, variety development would be affected. Signals from government programs,

directly transmitted to farmers, would affect

their decisions on varieties planted, thus influencing breeders’ objectives and release criteria.

Setting minimum quality specifications for

loans places an additional constraint on entry

into the loan program. These could easily be

applied to physical and sanitary quality characteristics as well as measurable intrinsic characteristics and, along with the variety identification scheme, would reinforce signals being

transmitted throughout the system. Farmers

would be required to obtain testing of grain that

was in the loan program and being stored on

farm, rather than self-certifying quality as is

presently the case.

Implementing such policies on government

programs and minimum quality specifications

will force lower quality grain into the export

market. Therefore, minimum quality specifications established for entry into government programs could be applied to grain entering export elevators. This would transmit signals for

improved quality throughout the system and

would reduce the spread of qualities available

for blending at export locations.

The need for accurate measurement of important characteristics—whether physical, sanitary, or intrinsic—is crucial to providing infor-
269

mation for the market to function properly. The

vehicle by which quality information is transmitted throughout the system is grain standards. Incentives and disincentives cannot be

established unless accurate, consistent, and

timely information is provided in the market.

This can be accomplished by continued efforts

to incorporate the four objectives of grain standards, by implementing mandatory inspection,

and by increasing NIST involvement in approving grain sampling and testing equipment.

Mandatory inspection of railcars and barges

would ensure that consistent sampling and testing is performed. Used in conjunction with

minimum quality specifications on grain entering export elevators, this would ensure that

one government agency is responsible for quality testing. The increased presence of NIST in

approving grain sampling and testing equipment would ensure that all parties testing grain

quality use approved equipment and follow

basic user requirements.

As discussed throughout this chapter, the interdependence between variety control, market intervention, and grain standards is complex. Grain quality is a function of the variety

planted, farmer practices, environment and

geographic location, handling practices, enduser preferences, marketing, government policies, and the ability of grain standards to provide information on important quality characteristics, Policy changes, therefore, must create

an integrated policy for enhancing grain quality. Potential conflicts, overlapping benefits,

and limitations of certain policy options must

be recognized and addressed.

Appendix A

Glossary of Acronyms

AMA —Agricultural Marketing Act

ASCS —Agricultural Stabilization and Conservation Service (USDA)

ASW —Australian Standard White wheat

BCFM —broken corn and foreign material

CCC —Commodity Credit Corporation

CIF —cost, insurance, and freight

CSRS —Cooperative State Research Service

CWRS —Canadian Western Red Spring wheat

cwt –hundredweight

DNA –deoxyribonucleic acid

D/T –diverter-type

EC —European Community

ELISA —enzyme-linked immunosorbent assay

ESCOP —Experiment Station Committee on

Policy

FAQ –fair average quality

FDA –Food and Drug Administration (PHS,

DHHS)

FDCA —Food, Drug and Cosmetic Act

FGIS —Federal Grain Inspection Service

(USDA)

FOB —free on board

GAFTA —Grain and Feed Trade Association

(UK)

HRS —Hard Red Spring wheat

HRW —Hard Red Winter wheat

NAEGA—North American Export Grain Association Inc.

NIRS —near-infrared reflectance spectroscopy

NIST —National Institute of Standards and

Technology (Department of

Commerce)

OSHA –Occupational Safety and Health Administration (Department of Labor)

OTA —Office of Technology Assessment

(U.S. Congress)

PVRC —Plant Variety Review Committee

(University of Illinois)

SAES —State Agricultural Experiment Station

SMV —soybean mosaic virus

SRW —Soft Red Winter wheat

SWQAC—Spring Wheat Quality Advisory Committee

UGSA —Uniform Grain Storage Agreement

USDA —U.S. Department of Agriculture

USGSA —U.S. Grain Standards Act

U.S.S.R.—Union of Soviet Socialist Republics

VRC —Variety Release Committee

273
Appendix B

Glossary of Terms

Adulterated grain: According to the Food, Drug and

Cosmetic Act, grain is deemed to be adulterated

if it contains an added or naturally occurring poisonous or deleterious substance that may render

it injurious to health (e.g., aflatoxin-contaminated

corn).

Aeration: The passage of air over or through grain

to control the adverse effects of excessive moisture, temperature, and humidity. This is usually

done by moving air with fans or through ducts.

Aflatoxins: Any of several mycotoxins that are

produced, especially in corn or oil seeds, by molds

(e.g. aspergillus flavus).

Agronomy: A branch of agriculture dealing with

field crop production and soil management.

Allele: One of several possible alternate forms of

a given gene.

Amino acid: A group of 20 molecules that bind together to form proteins. Each type of protein is

made up of a specific sequence of amino acids

coded for in the DNA.

Amylase: Any of the enzymes that accelerate the

hydrolysis of starch and glycogen.

Amylopectin: A component of starch characterized

by its heavy molecular weight, its branched structure of glucose units, and its tendency not to gel

in aqueous solutions. The starch of normal corn

is made up of amylopectin and amylose.

Amylose: A component of starch characterized by

its straight chains of glucose units and the tendency of its aqueous solutions to set to a stiff gel,

The starch of normal corn is made up of

amylopectin and amylose.

Backcross: The crossing of a first-generation hybrid

with either parent.

Bin-dryers: On-farm dryers that are generally lowcapacity, low-temperature systems, capable of

producing excellent quality grain.

Biochemistry: A branch of chemistry that deals with

the chemical compounds and processes occurring in living organisms,

Biotechnology: Techniques that use living organisms or substances to make or modify a product.

See genetic engineering and recombinant DNA.

Blending: For purposes of this assessment, blending refers to the mixing of two or more grain lots

to establish an overall quality that may or may

not be different from any one individual lot.

Blending is done for economic reasons, to achieve

uniformity for improved handling, or to meet a

particular quality specification.

274

Broken corn and foreign material (BCFM): Any material passing through a 12/64 inch sieve, plus

non-corn material remaining on top,

Bromus Secalinus (cheat): Any of several grasses,

especially the common chess. This weed is a major problem for winter wheat producers in the

central Plains.

Callus: Unorganized tissue formed from organized

plant tissue.

Carbohydrate: Any of various neutral compounds

of carbon, hydrogen, and oxygen (such as sugars,

starches, and cellulose) most of which are formed

by green plants.

Chromosome: A thread-like structure contained in

the nucleus of a cell that carries the genes that

convey hereditary characteristics.

Cleaning: For purposes of this assessment, cleaning is the removal of dockage, insects, and to a

degree shrunken and broken kernels from grain

by means of mechanical screening and scalping

devices, Cleaning practices vary from country to

country. See precleaning.

Combination dryers: On-farm dryers, mainly used

for corn, that combine the best characteristics of

bin and non-bin systems (i.e., high quality and

high capacity), but are more complicated and expensive.

Combine: A machine that harvests grain. The first

combine was patented in 1836, since then selfpropelled combines of either conventional or

rotary design have evolved and come into use

throughout the United States and in other

countries.

Concurrent-flow dryers: Off-farm commercial

dryers in which grain and air flow vertically. The

gentle drying and cooling methods used in these

dryers results in grain of superior quality, Their

main disadvantage is their high initial cost.

Corn: The seed of a cereal grass and the only important cereal plant indigenous to America. Corn

is used mainly for animal feed, but it is also used

for oils, starches, and syrups for human consumption, and in some industrial products. It is grown

extensively in the United States, the six Corn Belt

States are Iowa, Illinois, Indiana, Nebraska, Minnesota, and Ohio.

Cotyledon: The seed leaf of an embryo plant that

serves as nourishment for the elementary plant.

Crossflow dryers: The most prevalent type of offfarm commercial grain dryers in the United

States, in which grain and air flow in a perpen-
275

dicular direction. This type of dryer tends to dry

the grain non-uniformly, causing stress-cracking

of the kernels.

Cross-pollination: The transfer of pollen from one

plant to another plant.

Cultivar: An international term denoting certain

cultivated plants that are clearly distinguishable

from others by one or more characteristics, and

that when reproduced retain those distinguishing characteristics. In the United States “variety”

is considered to be synonymous with cultivar (derived from cultivated variety). See variety,

Cytoplasm: The protoplasm of a cell outside the nucleus consisting of an aqueous solution, which

is the site of most of the chemical activity of the

cell.

Deficiency payments: Payments to farmers based

on actual planted acres, which makeup the difference between a politically acceptable target price,

and the average market price or loan rate, whichever is higher.

Determination: The process whereby the corn kernel is broken apart into endosperm, germ, and

pericarp.

Deoxyribonucleic acid (DNA): The nucleic acid in

chromosomes that codes for genetic information.

The molecule is double stranded, with an external “backbone” formed by a chain of alternating

phosphate and sugar (deoxyribose) units and an

internal ladder-like structure formed by nucleotide base-pairs held together by hydrogen bonds.

Dockage: The foreign material in market grain (such

as stems, weeds, and dirt), which is readily removable by ordinary cleaning devices.

Drying: For purposes of this assessment, drying is

the removal of moisture from grain by various

methods in both commercial and on-farm dryers.

Air temperature, grain velocity, and airflow rate

during the drying process have a greater influence on grain quality than all the other grain handling operations combined.

Dry milling: The basic process used to mill wheat

and corn, involving the cleaning, conditioning,

grinding, and sifting of the grain.

Electrophoresis: A technique used to separate

molecules (such as DNA fragments or proteins)

from a mixture of similar molecules. By passing

an electric current through a medium containing the mixture each type of molecule travels

through the medium at a rate corresponding to

its electric charge and size. Separation is based

on differences in net electrical charge and in size

or arrangement of the molecule. This technique

can be used to identify grain varieties.

Elevator leg: Part of the belt-bucket system used in

commercial grain facilities. It consists of an endless vertical belt with buckets spaced evenly along

it. The buckets scoop up the grain at the bottom

(boot) of the leg and discharge it at the top.

Endosperm: A nutritive tissue in seed plants contained in the inner bulk of the kernel that consists primarily of complex carbohydrates. It also

contains protein, riboflavin, and B vitamins. In

corn, the quantity of vitreous or horny endosperm

relative to floury endosperm in the kernel determines the hardness of the grain.

Environment: The complex of climatic, edaphic,

and biotic factors that act upon an organism or

an ecological community and determine its form

and survival. The environment in which it grows

greatly influences the productivity and quality of

grain.

Enzyme: Any of a group of catalytic proteins that

are produced by living cells and that mediate and

provide the chemical processes of life without

themselves being destroyed or altered.

Enzyme-linked immunosorbent assay (ELISA): A

test that is used to identify proteins and plant

pathogens by using antibodies to identify proteins

rapidly. A protein-antibody complex is incubated

with an enzyme-coupled antibody that recognizes

and binds to the protein, The reaction is measured spectrophotometrically to identify the presence of the specific protein that is attached to the

antibodies.

European Economic Community (EC): A group of

twelve European nations, consisting of Belgium,

the Federal Republic of Germany (West Germany), France, Italy, Luxembourg, the Netherlands, the United Kingdom (UK), Ireland, Denmark, Greece, Spain, and Portugal that have

banded together for economic and political

reasons.

Federal Grain Inspection Service (FGIS): A branch

of the U.S. Department of Agriculture that establishes grain standards and develops the technology to measure the factors contained in such

standards. This agency also develops and publishes sampling and inspection procedures, evaluates and approves equipment, monitors inspection accuracy, and oversees mandatory export

inspection of grain by FGIS or FGIS-licensed inspectors.

Feed grains: Grains, especially corn, characterized

as high-energy grains due to their relatively high

levels of nitrogen-free extract and low levels of

crude fiber.

Flaking grits: A product of dry-milled hard corn.
276

Low-fat, large flaking grits are used primarily in

the manufacture of breakfast food, and coarse and

regular grits are used in the brewing industry.

Flour: Finely-ground meal derived from wheat.

There are four major flour types, hard wheat

flour, whole wheat flour, soft wheat flour, and

semolina. Flour is classified according to

strength. Strong flours, derived from hard wheat

and used mainly for bread-baking, are high in protein and elastic gluten (these include semolina,

which is made from Durum wheat and used to

manufacture pasta). Weak flours, derived from

soft wheat, are used for biscuits and pastries and

are low in protein and gluten.

Flour stream: Flour resulting from each separate

process of dry milling. Flour from each point of

the process has different characteristics and baking properties. In large flour mills 30 or more

separate flour streams of varying composition

and purity may be collected, grouped, and merchandised.

Fumigation: For purposes of this assessment, fumigation is the destruction of pests infesting grain

by professional personnel, trained in the application of fumigants, i.e., chemicals that at required temperature and pressure can exist in a

gaseous state in sufficient strength and quantities to be lethal to a given pest organism. Fumigants are some of the most toxic and unique pesticides, methyl bromide and hydrogen phosphide

are the fumigants most commonly used on grain.

Fungus: Any of a major group (fungi) of parasitic

lower plants that lack chlorophyll. Fungi include

molds, rusts, mildews, and mushrooms. Aspergillus flavus is a fungus that grows on corn.

Gene: The portion of a DNA molecule that is made

up of an ordered sequence of nucleotide bases

and constitutes the basic functional unit of

heredity.

Genetic engineering: Technologies (including recombinant DNA methods) used by scientists to

isolate genes from one organism, manipulate

them in the laboratory, and then insert them stably in another organism. See biotechnology and

recombinant DNA.

Genome: A term used to refer to all the genetic material carried by a single germ cell.

Genotype: The hereditary makeup of an individual

plant or animal, which, with the environment,

controls the individual’s characteristics.

Genotypic variability: The range of expression for

a specific trait (e.g., the protein percentage in

wheat, which can range from 7 to 30 percent).

Germplasm: The living stuff of the cell nucleus that

determines the hereditary properties of organisms and that transmits these properties from parents to progeny. The expression is also used in

a broad sense to refer to the total hereditary

makeup of organisms.

Gliadin: Simple proteins obtained from alcoholic

extraction of gluten from wheat or rye.

Glume: Hull or husk.

Gluten: A tenacious, elastic protein substance,

found especially in wheat flour, that gives cohesiveness to dough.

Grade-determining factors: Factors selected as indicators of value and quality that help set the numerical grade of grain.

Grading: The numerical grading of grain (e.g., Number 2 Hard Red Winter wheat) according to gradedetermining factors.

Grain: The seeds or fruits of various food plants,

including the cereal grasses (e.g., wheat, corn,

barley, oats, and rye) and other plants in commercial and statutory use (e.g., soybeans). Grain is

a living organism, and as such is a perishable

commodity that can be adversely affected by improper harvesting, handling, storage, and transportation.

Grain breakage: Mechanical damage to grain that

results in broken grain and fine material. This is

caused by the harvesting of grain that is too dry

and the cumulative damage inflicted on grain during repeated handling. Grain breakage causes decreased quality, greater storage problems, and increased rates of mold and insect infestation.

Grain quality: There is no single definition of grain

quality. For purposes of this assessment grain

quality is defined in terms of the physical, sanitary, and intrinsic characteristics of grain. See

intrinsic quality, physical quality, and sanitary

quality.

Grain standards: Legislation (the Grain Standards

Act) was passed in 1916 in an attempt to establish official standards for wheat, corn, and soybeans that would describe a level of quality and

provide a basis for marketing grain. This Act remained intact until the passage of the Grain Quality Improvement Act in 1986, which provided

new criteria as a basis for grain standards. Measuring grain quality is difficult to standardize and

there is a lack of clear objectives, goals, and criteria concerning the form and function of such

standards.

Grain storage: Grain is stored in three basic ways.

Vertically, in upright metal bins or concrete silos;

horizontally, in flat warehouses; and in on-ground

piles. See vertical storage, horizontal storage, and

on-ground pile storage.

Handling technologies: Technologies and equip-
277

ment that are used in the receiving, drying, cleaning, storage, conveying, and transportation of

grain.

Hard wheat: Wheat varieties that are high in protein (especially hard spring and winter wheats

and Durum wheat),

Harvesting: The process whereby grains and oil

seeds are removed from a plant, gathered, and

physically removed from a field.

Hexaploid: Having six times the monoploid chromosome number. Wheat is a hexaploid plant

species.

Homozygous: True breeding for a specific hereditary characteristic. A plant that breeds true for

a specific characteristic (such as flower color) is

called homozygous for this characteristic.

Horizontal storage: Grain storage in buildings constructed of metal, wood, or concrete, which have

flat floors and are filled by means of a portable

incline belt or conveyors in the roof. These storage facilities are more difficult to load, unload,

aerate, and fumigate than vertical storage facilities.

Hybrid: An offspring of a cross between two genetically unlike individual plants or animals. Hybrid

corn varieties have produced increased yields in

some parts of the United States, and progress is

being made in developing techniques for the commercial production of hybrid wheat,

Incline belt: An endless belt, used to convey grain,

which is supported by rollers and driven by a

shaft-mounted speed reducer motor.

Insecticides: Chemicals used to destroy insect pests,

The insecticides most commonly used on grain

are pyrethrins, malathion, and the more recently

introduced pirimphos-methyl, chlorpyrifos-methyl,

and bacillus thuringiensis (BT).

Insects: Insects create numerous problems causing

loss and damage in stored grain. Grain is lost

when consumed by the insects, insect wastes are

left behind in the grain, and insect fragments are

found in finished grain products, increased heat

and moisture resulting from insect metabolic

processes can lead to mold growth, and the use

of insecticides can leave pesticide residues in the

grain.

Intrinsic quality: Characteristics critical to the end

use of grain. These are nonvisual and can only

be determined by analytical tests. For example,

the intrinsic quality of wheat is determined by

characteristics such as protein, ash, and gluten

content; the intrinsic quality of corn by its starch,

protein, and oil content; and the intrinsic quality

of soybeans by their protein and oil content,

Isoglucose: A sweetener and sugar substitute derived from wheat starch.

Micro-organisms: Minute, microscopic, or submicroscopic living organisms Examples are bacteria, mycoplasma, and viruses, They are parasites that gain their sustenance from the material that they grow on, such as grain.

Millfeed: The material remaining after all the usable flour is extracted from grain. The material is

used by the feed industry to make animal feed

and feed supplements.

Milling: A process by which grain kernel components are separated either physically or chemically, and grain is ground into flour or meal.

Mixed-flow dryers: The most prevalent type of large,

continuous-flow, off-farm dryer used in countries

outside the United States. In these dryers, grain

is dried by a mixture of crossflow, concurrent

flow, and counterflow drying processes, which

dry grain more uniformly and produce a higher

quality grain. These dryers are expensive to manufacture and require extensive air-pollution

equipment,

Moisture: Moisture content and uniformity is a critical factor in grain quality. If grain is too wet or

too dry at harvest damage occurs. Moisture also

interacts with temperature and relative humidity in grain storage centers and during shipping,

when too much moisture can spur mold growth,

increase insect activity, and cause other quality

losses.

Mold: A superficial growth produced on damp or

decaying matter. Molds draw their sustenance

from the material they grow on. Mold growth on

grain creates damaged kernels, deposits toxic substances in the grain, and results in a loss of dry

matter. As they grow, molds produce heat and

moisture, which encourages their further proliferation.

Monogastric: An animal that has one digestive

cavity (for example, swine, poultry, humans).

Near-infrared reflectance spectroscopy (NIRS): A

new analytical technique that can determine the

structure of compounds and the composition of

substances by examining them with a spectroscope that is designed to operate in the infra-red

region of the spectrum, One application of this

technique is the measurement of moisture and

protein percentages in wheat. See spectrophotometer.

Non-bin dryers: The most popular on-farm dryers,

these are generally high-capacity, high-temperature systems, that frequently overheat and overdry the grain, causing serious deterioration in

grain quality.

Non-grade-determining factors: Factors that influence the quality of grain, but which are not taken

into account in the grading of grain, and which
278

must be reported as information whenever an

official inspection is made.

Off-farm dryers: High-capacity, high-temperature,

commercial grain dryers that are used away from

the farm. These fall into three categories, crossflow, concurrent-flow, and mixed-flow dryers.

On-farm dryers: Grain dryers used by farmers to

dry grain. At least 80 percent of the United States

corn crop is dried on-farm. On-farm dryers fall

into three categories, bin-dryers, non-bin dryers,

and combination dryers.

On-ground pile storage: Storage of grain placed in

piles directly on the ground or on pads, either

covered by a tarp or left uncovered. Piles can be

contained by fixed or movable sloping walls or

circular rings. Grain stored by this method is difficult to load, unload, aerate, and fumigate.

Pericarp: The covering of a seed that is derived from

the ovary wall.

Physical quality: Grain characteristics associated

with the outward appearance of the grain kernel,

including kernel size, shape, color, moisture,

damage, and density.

Plant breeding: The development of plants with certain desirable characteristics. Grain breeding programs generally aim to improve yield and harvestability, increase disease resistance, and

satisfy apparently desirable intrinsic quality

goals.

Precleaning: The removal of foreign material such

as weeds, seeds, dirt, stems, and cobs from the

grain before it is dried. This results in a more uniform moisture content in the dried grain and eliminates the drying of material that detracts from

grain quality. Precleaning is not generally practiced by dryer operators in the United States. See

cleaning.

Protein: The total nitrogenous material in plant or

animal substances. Proteins occur naturally and

are complex combinations of amino acids.

Recombinant DNA: Techniques involving the incorporation of DNA fragments, generated with the

use of restriction enzymes, into a suitable host

organism. The host is then grown in a culture to

produce clones with multiple copies of the incorporated DNA fragment. This and other genetic

engineering techniques hold future promise for

altering the genetic makeup of plants to enhance

various desirable characteristics, but they are not

yet widely used. See biotechnology and genetic

engineering.

Rheology: The study of the flow of materials, particularly the plastic flow of solids.

Sanitary quality: Grain characteristics associated

with cleanliness. They include the presence of

foreign material that detracts from the overall

value and appearance of the grain, including the

presence of dust, broken grain, rodent excreta,

insects, residues, fungal infection, and nonmillable matter.

Screw augur conveyor: A round tube with a continuous screw on a spiral inside. The principal

means of moving grain on farms where inexpensive portable equipment is needed.

Sedimentation test: A test that measures the quality of protein content in wheat. Ground wheat is

suspended in water and treated with lactic acid.

The portion that settles to the bottom of a graduated cylinder within 5 minutes is the sedimentary value.

Shrink: The loss of weight in grain due to the

removal of water.

Single-cross hybrid: A first generation hybrid between two selected and usually inbred lines.

Soft wheat: Varieties of wheat that contain low

amounts of protein.

Sorghum: A cultivated plant derived from a genus

of Old World tropical grasses, similar to Indian

corn.

Soybeans: A hairy annual Asiatic legume, widely

grown for its oil rich proteinaceous seeds and for

forage and soil improvement. Soybeans are used

mainly for oil and for high-protein meal for animal feed. The principal soybean-producing states

are Illinois, Indiana, Iowa, Missouri, Mississippi,

and Ohio. The United States produces 60 percent

of the world supply of soybeans.

Spectrophotometer: An instrument that measures

the relative intensities of light in different parts

of the spectrum. See near-infrared spectroscopy.

Steepwater: Water used to soak corn during the wet

milling process.

Stress-cracks: Cracks in the horny endosperm of

corn caused by the rapid drying of kernels with

heated air. Stress-cracking causes increased

breakage during handling and reduces flaking grit

yields.

Tempering: The addition of moisture to wheat and

corn during the dry milling process to aid the

removal of bran from the endosperm.

Tissue culture: A technique in which portions of

a plant or an animal are grown on artificial culture medium in an organized state (e.g., as plantlets) or in an unorganized state (e.g., as callus).

Triticale: A hybrid between wheat and rye that has

a high yield and a rich protein content.

Unit trains: A train of 50 or more railcars departing from the same point for the same destination

with one bill of lading. This is an efficient way

of transporting grain.
279

U.S. Grain Standards Act: This Act, administered

by the FGIS, requires that uniform standards be

developed and used when marketing grain. Testing is provided for, but no requirement exists as

to what tests should be performed on grain moving domestically within the United States. Mandatory testing of grain for export is required.

Variety: Any of various groups of plants of less than

specific rank. See cultivar.

Vertical Storage: The storage of grain in upright concrete silos or metal bins that can range in size

from as little as 3,000 bushel farm bins to 500,000

bushel commercial bins, They are easy to load,

unload, aerate, and fumigate.

Vital wheat gluten: A wheat product containing 75

to 80 percent protein, used as a flour fortifier, the

product of new advances in wheat processing

technologies.

Wet milling: Processes using water in which corn

is tempered and steeped and converted into

starches. More than half of these starches are converted into corn syrups and corn sugars. Corn

oil is also extracted during starch recovery.

Wheat: Any of various grasses high in gluten that

are cultivated in various temperate areas for the

grain that they yield, which is used in a vast array of products. In the United States the main

wheat-producing states are Kansas, Oklahoma,

Texas, Nebraska, and Colorado. Hard Red Winter wheat is the main wheat variety grown in the

United States,

Wheat starch: The portion of the wheat kernel remaining after the gluten has been extracted.
Appendix c

Commissioned Papers and Authors

This report was possible in part because of the valuable information and analyses contained in the

background reports commissioned by OTA. These papers were reviewed and critiqued by the advisory

panel, workgroups, and outside reviewers. The papers are available through the National Technical Information Service. *

The Genetics of Grain Quality Technologies Affecting Quality

Editor/Compiler

Jack F. Carter

Marvin R. Paulsen

University of Illinois

‘North Dakota State University

Hard Red Winter Wheat

Rollin G. Sears Mark D. Schrock

Kansas State University Kansas State University

Paul J. Mattern

University of Nebraska

Hard Red Spring Wheat

Bert L. D’Appolonia

North Dakota State University

Hard Red Spring Wheat

Richard C. Frohberg

North Dakota State University

Durum Wheat

Roy G. Cantrell

North Dakota State University

David B. Sauer

Harry H. Converse

U.S. Department of Agriculture

Manhattan, KS

Charles R. Hurburgh

Iowa State University

Durum Wheat

Joel W. Dick Charles R. Hurburgh

North Dakota State University Iowa State University

Soft Red Wheat and White Wheat

Patrick L. Finney

U.S. Department of Agriculture

Wooster, OH

Fred W. Bakker-Arkema

Michigan State University

Howard L. Lafever

Ohio State University

Molecular Biology Hagen B. Gillenwater

Karl A. Lucken Robert Davis

North Dakota State University U.S. Department of Agriculture

Stephen P. Baenziger Savannah, GA

University of Nebraska

Joe W. Burton

U.S. Department of Agriculture C. Phillip Baumel

Raleigh, NC Iowa State University

A. Forrest Troyer Marvin R. Paulsen

DeKalb-Pfizer Genetics University of Illinois

280
281

Tilden W. Perry

Purdue University

Charles R. Hurburgh

Iowa State University

Economic and Institutional Analysis

Quality 

William W. Wilson

Jean Riepe

North Dakota State University

Paul Gallagher

Kansas State University

William W. Wilson

Craig Anderson

North Dakota State University

Paul Gallagher

Kansas State University

Rhond Rudolph Roth

Washington, DC

Lowell D. Hill

University of Illinois

Major U.S. Grain Competitors

A 

Lowell D. Hill

University of Illinois

Thomas E. Weidner

Consultant

Robert A. Zortman

U.S. Department of Agriculture

Michael J. Phillips

Office of Technology Assessment

James G. McGrann

Texas A&M University

Lowell D. Hill

University of Illinois

Thomas E. Weidner

Consultant

Robert A. Zortman

U.S. Department of Agriculture

Mary J. Schultz

Michigan State University

William W. Wilson

North Dakota State University

Lowell D. Hill

University of Illinois

Robert A. Zortman

U.S. Department of Agriculture

Michael J. Phillips

Office of Technology Assessment

E. Wesley Peterson

Texas A&M University

Colin A. Carter

University of California-Davis

Andrew Schmitz

University of California-Berkeley

David M. Orr

Office of Technology Assessment

Robert A. Zortman

U.S. Department of Agriculture

William W. Wilson

North Dakota State University

David M. Orr

Office of Technology Assessment

Robert A. Zortman

U.S. Department of Agriculture

Michael J. Phillips

Office of Technology Assessment

*These commissioned papers will be available in spring of 1989 from the National Technical Information Service, Springfield, VA 22161, telephone (703) 487-4650.

Volume 2: Commissioned Papers

Part A: The Genetics of Grain Quality

Part B: Technologies Affecting Quality

Part C: Economic and Institutional Factors of Grain Quality

Part D: Major U.S. Grain Competitors
Appendix D

Acknowledgments

OTA would like to thank the members of the advisory panel who helped guide the direction of this

study and who reviewed drafts of this report. OTA also acknowledges the cooperation of the Federal Grain

Inspection Service of the U.S. Department of Agriculture in providing staff support and data for this study.

In addition, OTA thanks the following individuals for reviewing background papers, reviewing individual

report chapters, or providing information to the project staff:

James Allen

Research Products Company

Jim Bair

U.S. Department of Agriculture

Fred Bakker-Arkema

Michigan State University

Roy Barrett

U.S. Department of Agriculture

Ted Bownik

ADM Milling

Lee Boyd

American Feed Manufacturers

Dean Brown

American Farm Bureau Federation

William Bullard

National Council of Farmer Cooperatives

Colin Carter

University of California-Davis

Jim Frahm

U.S. Wheat Associates

David Fulton

National Council of Farmer Cooperatives

David Galliart

U.S. Department of Agriculture

Kenneth Gilles

U.S. Department of Agriculture

Kerry Goforth

National Grain and Feed Association

James Guinn

American Soybean Association

R.J. Gustafson

Ohio State University

Larry W. Gutekunst

Deutz-Allis Corporation

Phil Harein

University of Minnesota

Marion Hartman

National Corn Growers Association

Arvid Hawk

Cargill, Inc.

Doris Hoener

Moorman Manufacturing Company

James Houck

University of Minnesota

Harold Hudgins

Alabama State Docks Department

T.L. “Sam” Irmen

The Andersons

Gail Jackson

U.S. Department of Agriculture

Jack Johnston

Cargill, Inc.

Kendall Keith

National Grain and Feed Association

Allen Kirleis

Purdue University

Tom Klevay

Millers National Federation

Rodman Kober

Continental Grain Company

George Kornstad

Pestcon Systems, Inc.

David Krejci

Grain Elevator and Processing Society

Gerry Krueger

North American Export Grain Association

John Marshall

U.S. Department of Agriculture

Wilda Martinez

U.S. Department of Agriculture

Steve McCoy

North American Exporters Grain Association

Gary W. McKinney

National Grain Trade Council

Richard McWard

Bunge Corporation

282
283

Kirk Miller Larry Schultz

U.S. Department of Agriculture Peavey Grain Companies

John Barrington

Continental, Inc.

Robert Petersen

National Grain Trade Council

Dale Phillips

Union Equity

John Pitchford

U.S. Department of Agriculture

Adrian J. Polansky

U.S. Wheat Associates

Wilson Pond

U.S. Department of Agriculture

M.A. Pothoven

Moorman Manufacturing Company

Dan Ragsdale

National Corn Growers Association

Cletus E. Schertz

University of Minnesota

Willard Severns

American Farm Bureau Federation

Henry Shands

U.S. Department

Beltsville, MD

of Agriculture

of Agriculture

David Shipman

U.S. Department

Virgil Smail

National Association of Wheat Growers

James Snitzler

U.S. Department of Agriculture

Max R. Spencer

Continental, Inc.

Lyle Stephens

Deere & Company Technical Center

Winston Wilson

U.S. Wheat Associates

Index

Aflatoxin, testing technologies for, 194, 195-196

Africa

U.S. wheat exports to, 35

wheat consumption and import trends in, 93

wheat preference shifts in, 95, 98

see also Middle East, individual countries in

Agricultural Market Act (AMA), 197

Agricultural Research Service (ARS)–USDA, 119, 127

Agricultural Stabilization and Conservation Service

(ASCS)–USDA, 43

Allowable Storage Time Table for corn, 180, 183

American Association of Cereal Chemists, 191

American Feed Manufacturers Association, 62

American Oil Chemists’ Society, 191

American Seed Trade Association, 127

Archway Cookies, Inc., 90

Argentina

dominant class of wheat exported by, 91

drying practices in, 239, 241

export standards used in, 207

grain storage practices in, 239, 241

pricing policy of, 244

seed variety control in, 244

Asgrow Seed Co., 119

Asia

end-product preferences of consumers in, 91

wheat preference shifts in, 95, 98

wheat types preferred by countries in, 92-93

see also Far East; individual countries in

Association Nacional dos Exportadores de Cereais

(Brazil), 244

Association of American Feed Control Officials, 48

Australia

dominant type of wheat exported by, 91

drying practices in, 239, 241

FAQ standard use in, 207

grain market regulation in, 5, 19, 246

grain storage practices in, 239, 241

marketing by variety in, 244

pricing policy of, 244-245

seed variety control in, 241, 247, 259

uniformity in grain quality between shipments

from, 15, 89

Australian Wheat Board (AWB), 239

Barges. See Transportation

Bean degermer, 54

Biochemical selection, in wheat breeding, 113

Biotechnology, use in grain breeding of, 111-112, 113,

122, 123, 129-130

Blending

major grain exporting competitors’ use of, 241

necessity in the United States caused by lack of

uniformity in marketing process, 189, 248

reasons for, 175

technology types and performance for, 175-179

wheats for various end uses, 15, 68-69, 70, 93, 176

Brazil

cleaning practices in, 239

domestic wheat production’s relationship to income

in, 94

drying practices in, 239

export standards used in, 207

grain inspection authority and grade standards of,

244

grain storage practices in, 239, 241

pricing policy of, 244-245

seed variety control in, 244

Breakage, interaction between moisture and, 7, 8, 11,

141, 144, 146, 154, 179-183

Breeders, role of public and private grain, 106-108,

118-122, 127-128

Breeding. See Genetic selection

Broken corn and foreign material (BCFM), 203, 204,

205, 211, 213

Canada

cleaning practices in, 239, 241, 247

dominant type of wheat exported by, 91

FAQ standard use in, 207

grain market regulation in, 5, 19

grain transport to, 36, 38, 165, 191

pricing policy of, 94, 244-245

seed variety control in, 241, 259

soybean cultivars release in, 120

storage incentives in, 246

uniformity in grain quality between shipments

from, 15, 89

Chicago Board of Trade, hedging grain purchases

and sales through, 41

China, People’s Republic of, corn grades in, 206

Clark, Paul, 90

Cleaning, grain

technologies of major grain exporting competitors,

239, 241, 247

technology types and performance for, 9-10,

171-175

use in grain processing, 51, 54, 57

Colorado, wheat production in, 32, 105

Columbia River, 167

Combines. See Harvesting, Technologies

Commodity Credit Corporation (CCC)–USDA

grain storage agreements made by, 228, 261-262

inspection policies of, 228-232

loan program workings and objectives of, 14, 42,

221-224, 254

pilot project on premiums and discounts of, 234

policy options regarding loans made by and grains

owned by, 21-22, 254, 261

Competition

comparison of U.S. grain quality affecting

institutions and regulations to major grain

exporting, 241-244, 246-247

287
—. .

grain quality attributes important in processing, 13,

14-15, 63, 66, 67-68, 80-82, 84

marketing system principles and characteristics of

U.S. grain, 4, 40-41

production characteristics and trends in U.S. grain,

29, 31-33

quality control standards and methods for U.S.

grain, 42-43

soybean processing, 50

storage and handling practices by U.S. grain, 38-39

technologies used in grain processing, 50-57

utilization of grains produced by U.S. grain, 33-35,

92-94

Insect management, technology types and

performance for, 10, 11, 158-165

Inspection. See Regulation; Technologies; Testing

International U.S. Wheat End Use Quality

Conference (1986), 79, 82

Interrelationship

between grain handling and storage technologies,

39

between standards, variety, and market, 16, 23,

256-257, 266-267

between technologies as related to grain quality, 3,

14, 15, 43, 61, 71-72, 84, 90, 182-183

between technologies regarding moisture and

breakage, 7, 10, 12, 141, 144, 146, 154, 179-182

between yield and protein, 232-234

of environment and genetic variation in grain

breeding, 105-106, 116-118, 126

of field performance criteria for corn, 129

of quality, disease resistance, and yield in grain

breeding, 104-105, 116

of yield, protein, and oil content in soybean

breeding, 114, 116

Iowa

corn production by, 32

hybrid seed sales in, 127

soybean production in, 33, 114

Israel, U.S. soybean exports to, 35

Japan

grain transportation to, 170

U.S. grain exports to, 35, 115

wheat consumption and import trends in, 93

wheat type preference shift in, 95, 98

Kansas

farm programs’ impact on grain marketing in,

227, 233

wheat production in, 32, 105

Karl Fisher titration method, 193

Laguio, Emma B., 79, 82

Latin America

wheat type preference shifts in, 98

see also individual countries in

Legislation

evaluation of recent grain quality, 212-213

see also individual statutes

Licensing. See Regulation

Livestock, production of feed for, 33, 34, 49-50, 94-95

Loan rate program, premiums and discounts used in

U.S. farm, 14, 42, 221-224

Marketplace

importance of supplying quality attributes in, 89-90

importance of uniform quality between grain

shipments in, 14, 15, 79-81, 84

incentives in the grain, 203-204

quality attributes desired by purchasers of U.S.

grain in, 14, 15-16, 67-84, 91-98

trends for wheat quality characteristics in the

international, 93-98

Merchants Exchange of St. Louis, 168

Mexico

export inspection exception for, 191

U.S. grain transport to, 38, 165

Michigan, performance trial requirement in, 128-129

Middle East

end product preference of consumers in, 91, 98

grain attributes considered important by countries

in, 72

U.S. grain exports to, 35

wheat consumption and import trends in, 93

see also individual countries in

Milling, grain, 33, 34, 47-49, 50-51, 54-57

Minnesota, grain production in, 32, 33

Mississippi, 115

Mississippi River System, grain transport on, 167

Missouri, soybean production in, 33

Moisture

interaction between breakage and, 7, 8, 11, 141,

144, 146, 154, 179-183

levels in grain processing, 51, 54-55, 57

see also Drying; Grain

Montana, wheat production in, 32

Nagao, Seiichi, 79

National Association of State Universities and Land

Grant Colleges, 128

National Bureau of Standards. See National Institute

of Standards and Technology

National Conference of Weights and Measures, 191

National Corn Growers Association, 151

National Grain and Feed Association, 43, 154, 209

National Grain and Feed Dealers Association, 200

National Institute of Standards and Technology

(NIST)–Department of Commerce

policy options involving testing responsibility of,

23-24, 26, 265-266

weights and measures program coordination by,

191-192

National Seed Storage Laboratory, Germplasm Bank,

107

National Soybean Processor Association, 62

Near-infrared-reflectance analyzers (NIR), 109, 192,

193, 196, 265

Nebraska

corn production in, 32
289

Federal Food, Drug, and Cosmetic Act (FDCA), grain

guidelines of, 197

Federal Grain Inspection Service (FGIS)

grain standards developed by, 42

inspection and related regulation duties of, 13, 43,

189, 190-191, 192, 193, 196-197, 199, 201-202,

203, 204, 209, 212, 228

policy options involving standards set by, 23-24,

263, 264, 265

Federal Seed Act (1939), 121, 127

Feed, animal, grain used for, 33, 34, 49-50, 94-95

Flour

production in grain milling, 33, 47-48, 51-53, 68-69

quality and baking technologies, 14, 15, 61, 71-72,

90

Food and Drug Administration (FDA)

aflatoxin guidelines set by, 194, 197-199

defect action limit for wheat of, 264

Food Security Act (1985], 3, 43, 220

France

cleaning practices in, 239

dominant type of wheat exported by, 91

drying practices in, 239

grain inspection authority and grade standards of,

244

grain market regulation in, 5, 19, 241, 244-245, 247,

259

grain storage practices in, 239, 241

marketing by variety in, 244

pricing policy of, 244-245

seed variety control in, 241, 247, 259

wheat productivity growth in, 4

Fumigation. See Pesticides

Funding. See Economics

Genetic engineering, See Biotechnology

Genetic selection

influence on grain quality characteristics of,

104-106, 115-118, 125-127, 130

objectives for grain, 103-104, 114-115, 123-125, 130

variability of grain trait expression using, 105-106,

116-118, 125-127, 130

see also Technologies

Genotypes. See Environment; Genetic selection

Gluten

content of wheat, 33, 61, 71

production in grain processing, 47, 48, 53-54, 55, 57

Grading. See Standards; Testing; Variety

Grain

applying economic criteria to standards for U. S.,

209-211

blending technologies, 175-179

case study in wheat illustrating changing nature of

markets for, 91-98

cleaning technologies, 9-10, 171-175

drying technologies, 8, 143-151, 239, 241

evaluation of standards for U. S., 200-209

export trends and markets for the United States,

30-31, 35

farm policy programs and objectives for U. S.,

14, 42, 219, 221, 228, 244, 246, 253-254

flow system in the United States, 36-38

harvesting technologies, 9-10, 137-143

insect management technologies, 10, 158-165

inspection and testing procedures in the United

States, 189-199

marketing system principles and characteristics in

the United States, 4, 40-41

production characteristics and trends in the United

States, 29, 31-33

quality measurement and standards for, 12-13,

42-43, 62-67, 84

storage and handling technologies, 9-10, 11, 38-39,

151-158, 239, 241, 247-248

transportation techniques, 165-171

utilization of U.S.-produced, 33-35, 92-94

see also Corn; Soybeans; Wheat

Grain and Feed Trade Association (GAFTA), 207

Grain Quality Improvement Act (1986), 30, 137, 171

evaluation of, 212-213

objectives of grain standards specified by, 202,

209-210, 212

Grain Trade Rules, 43

Greece, 94

Guidelines. See Standards

Handling, grain

technologies of major grain exporting competitors,

239, 241, 247-248

U.S. technology types and techniques for,

9-10, 151-152

Harvesting, grain, technology types and performance

for, 9-10, 137-143

Hatch Act, 119

Hedging, use by U.S. grain trade players, 41

Hybrids, development and performance of grain,

110-111, 123-126, 129

Illinois, grain production in, 32, 33

Illinois, University of, 128

Imports. See Trade

Incentives

grain standards provision of market, 203-204

for on-farm storage, 246

provided by the Common Agricultural Policy of the

EC, 237

for quality characteristics in U.S. grain marketing

system, 5, 40

V. prohibitions as solution to grain standards

problems, 212-213

India, U.S. wheat exports to, 35

Indiana

corn production in, 32

soybean production in, 33, 114

Industry

animal feed manufacturing, 49-50, 94-95

export trends and markets of U.S. grain, 30-31, 35

farm policy programs and objectives for U.S. grain,

14, 42, 219, 221, 228, 244, 246, 253-254

flow system of U.S. grain, 36-38

grain milling, 47-49
290

grain quality attributes important in processing, 13,

14-15, 63, 66, 67-68, 80-82, 84

marketing system principles and characteristics of

U.S. grain, 4, 40-41

production characteristics and trends in U.S. grain,

29, 31-33

quality control standards and methods for U.S.

grain, 42-43

soybean processing, 50

storage and handling practices by U.S. grain, 38-39

technologies used in grain processing, 50-57

utilization of grains produced by U.S. grain, 33-35,

92-94

Insect management, technology types and

performance for, 10, 11, 158-165

Inspection. See Regulation; Technologies; Testing

International U.S. Wheat End Use Quality

Conference (1986), 79, 82

Interrelationship

between grain handling and storage technologies,

39

between standards, variety, and market, 16, 23,

256-257, 266-267

between technologies as related to grain quality, 3,

14, 15, 43, 61, 71-72, 84, 90, 182-183

between technologies regarding moisture and

breakage, 7, 10, 12, 141, 144, 146, 154, 179-182

between yield and protein, 232-234

of environment and genetic variation in grain

breeding, 105-106, 116-118, 126

of field performance criteria for corn, 129

of quality, disease resistance, and yield in grain

breeding, 104-105, 116

of yield, protein, and oil content in soybean

breeding, 114, 116

Iowa

corn production by, 32

hybrid seed sales in, 127

soybean production in, 33, 114

Israel, U.S. soybean exports to, 35

Japan

grain transportation to, 170

U.S. grain exports to, 35, 115

wheat consumption and import trends in, 93

wheat type preference shift in, 95, 98

Kansas

farm programs’ impact on grain marketing in,

227, 233

wheat production in, 32, 105

Karl Fisher titration method, 193

Laguio, Emma B., 79, 82

Latin America

wheat type preference shifts in, 98

see also individual countries in

Legislation

evaluation of recent grain quality, 212-213

see also individual statutes

Licensing. See Regulation

Livestock, production of feed for, 33, 34, 49-50, 94-95

Loan rate program, premiums and discounts used in

U.S. farm, 14, 42, 221-224

Marketplace

importance of supplying quality attributes in, 89-90

importance of uniform quality between grain

shipments in, 14, 15, 79-81, 84

incentives in the grain, 203-204

quality attributes desired by purchasers of U.S.

grain in, 14, 15-16, 67-84, 91-98

trends for wheat quality characteristics in the

international, 93-98

Merchants Exchange of St. Louis, 168

Mexico

export inspection exception for, 191

U.S. grain transport to, 38, 165

Michigan, performance trial requirement in, 128-129

Middle East

end product preference of consumers in, 91, 98

grain attributes considered important by countries

in, 72

U.S. grain exports to, 35

wheat consumption and import trends in, 93

see also individual countries in

Milling, grain, 33, 34, 47-49, 50-51, 54-57

Minnesota, grain production in, 32, 33

Mississippi, 115

Mississippi River System, grain transport on, 167

Missouri, soybean production in, 33

Moisture

interaction between breakage and, 7, 8, 11, 141,

144, 146, 154, 179-183

levels in grain processing, 51, 54-55, 57

see also Drying; Grain

Montana, wheat production in, 32

Nagao, Seiichi, 79

National Association of State Universities and Land

Grant Colleges, 128

National Bureau of Standards. See National Institute

of Standards and Technology

National Conference of Weights and Measures, 191

National Corn Growers Association, 151

National Grain and Feed Association, 43, 154, 209

National Grain and Feed Dealers Association, 200

National Institute of Standards and Technology

(NIST)–Department of Commerce

policy options involving testing responsibility of,

23-24, 26, 265-266

weights and measures program coordination by,

191-192

National Seed Storage Laboratory, Germplasm Bank,

107

National Soybean Processor Association, 62

Near-infrared-reflectance analyzers (NIR), 109, 192,

193, 196, 265

Nebraska

corn production in, 32
291

soybean research funding in, 120

wheat production in, 32

New York State, corn production in, 33

North America, See individual countries in

North American Export Grain Association, Inc.

(NAEGA), 41, 201

North Carolina

soybean cultivars in, 115

variety release in, 120, 121

North Dakota

corn production in, 33

farm programs’ impact on grain marketing in, 223,

227, 233

wheat breeding in, 104, 110

wheat production in, 32

North Dakota State University, 174

Occupational Safety and Health Administration

(OSHA), 197

Official United States Standards for Grain, 61, 172,

173

Ohio

corn production in, 33

soybean breeding research budget in, 120

soybean production in, 33

Oklahoma, wheat production in, 32, 105

Paddock, Senator, 200

Pakistan, 94

Pesticides

used as grain protestants, 159-160

used for fumigation, 159, 160-162

Pioneer Hi-Bred International, Inc., Plant Breeding

Research Forum sponsored by, 118-119

Plant Variety Protection Act (1970)

breeding stimulus of, 106, 118, 120

cultivar release procedures and, 121

Policy

comparison of U.S. and competitor grain exporters’

grain quality affecting, 244-246

government grain storage, 228-232

grain quality affected by U.S. Government farm,

219-233

impacts on quality of U.S. farm, 14, 219-234,

253-254

of major U.S. competitors, 5, 241-246, 254

options for Congress to enhance U.S. grain quality,

14-25, 254-267

programs and objectives of U.S. Government farm,

14, 42, 219, 221, 228, 244, 246, 253-254

U.S. grain inspection, 4-5, 43, 189-190

variety release, 121-122, 128-129

Premiums. See Deficiency payment/target price

program; Economics; Incentives; Loan rate

program

Pricing. See Economics

Productivity. See Yield

Protein

as ultimate test for wheat quality, 68

demand shift to wheats with lower content of, 93,

95-98

increase in implicit value of wheat’s content of, 94

production trade-off between yield and, 232-234

quantity and quality importance in wheat’s end-use

suitability, 15, 91, 92, 93

Quality attributes

congressional policy options to enhance grain,

16-26, 254-267

debate over U.S. grain, 3, 43

factors influencing the demand for differing wheat,

93-98

grain processing industries’ perception of decrease

in, 81-82

grain processing technologies’ relationship to, 13,

14-15, 61, 71-72, 84, 90, 182-183

harvesting technologies’ effects on, 141-143

impacts of markets, farm programs, and technology

on, 232-233, 234

inverse relationship between yield and, 104-105,

116, 126-127, 130

marketing decisions based on the market for, 5, 40

required by end users of corn, 13, 16, 72-78

required by end users of soybeans, 13, 14, 78

required by end users of wheat, 13, 15, 68-72

storage technologies’ effects on, 153-158

types of grain, 3, 44

uniformity of, between shipments of grain, 14, 15,

79-81, 84

U.S. awareness of various industries’ requirements

regarding, 13, 14, 89, 90

U.S. farm policies’ impacts on, 14, 219-234, 253-254

Railroads. See Transportation

Regulation

comparison of U.S. and competitor grain exporters’

grain quality affecting institutions and, 5,

241-244, 246-247

congressional policy options related to market,

19-22, 254-256, 259-263

see also Policy; Standards; Testing

Research

on differing wheat consumption patterns in

developing and industrial countries, 93

on factors determining grain storability, 202-203

on grain breakage, 10, 182

grain breeding, 109-110, 111-112, 113, 118-119, 120,

126-128

Ships. See Transportation

Snake River, 167

South Africa, export standards used in, 207

South America

grain attributes considered important by countries

in, 72

see also individual countries in

South Dakota, wheat production in, 32

South Korea

grain transport and, 170

U.S. grain exports to, 35

Soybeans

adequacy of standards for, 66-67
292

breeders’ influence on development of, 118-122

genetic influences on quality characteristics of,

115-118

genetic selection objectives for, 114-115, 130

historical development of, 114

processing of, 50, 57

production areas and trends for the United States,

33

quality attributes required by end users for, 13, 14,

78

technologies used in breeding, 122-123

variety release procedures and development time

for, 120-122, 130

see also Grain

Spring Wheat Quality Advisory Committee (SWQAC),

107

Standards

adequacy of U.S. grain, 3, 43, 63-67

alternatives to present system of U.S. grain, 205-209

congressional policy options related to grain, 21-23,

263-266

economic criteria applied to U.S. grain, 209-211

economic solutions to problems with U.S. grain,

212-213

establishing U.S. grain, 196-199

evaluating U.S. grain, 200-209

FDA grain quality, 194, 197-199

FGIS grain, 42

history of U.S. grain, 200-201

integrating objectives of U.S. grain, 204-205

major grain exporting competitors’ inspection

authority and grade, 244

major grain exporting competitors’ use of grain

receival, 244, 247

objectives of U.S. grain, 201-204

Official U.S. Grain, 61, 62, 172, 173

see also Quality attributes; Testing

State Agricultural Experimental Stations (SAES)

grain breeding by, 110, 120

grain breeding programs funding by, 106, 127

variety release procedures by, 7, 121

Storage

factors determining quality maintenance for grain

in, 202-203

government policies for grain, 228-232

technologies of major grain exporting competitors,

239, 241, 247-248

U.S. technology types and techniques for, 9-10, 11,

38-39, 151, 152-158

Subsidies. See Incentives

Sweden, 94

Taiwan

grain transportation, 170

U.S. soybean exports to, 35

Target price/deficiency payment program, effects on

grain quality of, 42, 219, 220, 225, 228, 232-233,

234

Technologies

comparison of U.S. and competitor grain exporters’

handling practices and, 239-241, 247

flour quality and baking, 14-15, 61, 71-72, 90

grain breeding, 108-113, 122-123, 129-130

grain quality attributes and processing, 13, 14-15,

61, 84, 90, 182-183

grain storage, 38-39

grain testing, 191-196

industry acceptance of traditional quality

measuring, 15, 89-90

interaction between moisture and breakage relating

to, 179-183

types and performance of blending, 171, 175-179

types and performance of cleaning, 9-10, 171-175

types and performance of drying, 8, 143-151

types and performance of harvesting, 9-10, 137-143

types and performance of insect management, 10,

11, 158-165

types and performance of transportation, 165-171

types and techniques of storage and handling, 9-10,

11, 38-39, 151-158, 239, 241, 247-248

used by grain processing industries, 50-57

Tempering, 51, 54

Testing

gene identification, 112-113

importance to grain processing industries of

various types of quality, 13, 15, 63, 66, 69, 72,

76-78, 80-82

industry acceptance of traditional quality

measuring, 15, 89-90

and inspection of U.S. grain, 189-199

technologies, 191-196

see also Quality attributes; Standards

Texas

soybean breeding in, 114

wheat production in, 32

Trade

consumer end-product preferences effect on grain,

91-93

economics of grain, 41

grain inspection in export, 190-191

grain standards’ facilitation of, 202

importance of uniform quality between shipments

in grain, 14, 15, 79-81, 84

quality attributes desired by buyers in U.S. grain,

14, 15, 67-84

standards and quality factors specified in contracts

in U.S. grain, 16, 64, 65, 66, 67, 72, 78, 84

trends in and dependence on U.S. grain export,

30-31, 33, 34, 35

see also Marketplace

Traits. See Breeders; Genetic selection

Transportation

insect management and, 163

modes of major grain exporting competitors,

239-241

U.S. technology techniques and performance for,

36-38, 165-171, 191

Trucks. See Transportation

Uniform Grain Storage Agreement (UGSA), 43, 228,

230

Union of Soviet Socialist Republics (U.S.S.R.), U.S.

grain exports to, 35

United Kingdom (U. K.)
293

Variable Import Levy on dockage imposed in, 255

wheat types imported by, 93

United States (U. S.)

aspiration cleaning equipment in, 175

awareness of quality requirements of various

processing industries by, 13, 14, 89, 90

corn dry mills in, 49

corn yield, trend in, 124, 129

economic criteria applied to grain standards of,

209-211

evaluating grain standards of, 200-209

export trends and markets, 30-31, 35

farm policies’ impact on grain quality, 14, 42,

219-234, 253-254

fundamental advantages in grain system of, 4-5,

251-252

government grain storage policies in, 228-232

grain export capability of, 165

grain flow system in, 36-38

grain inspection and testing in, 189-199

grain quality affecting institutions and regulations

of competitors compared to, 241-244, 246-247

grain quality affecting policies of competitors

compared to, 244-246

grain quality control standards and methods of,

42-43

handling technologies and practices of competitors

compared to, 239-241, 247

marketing system principles and characteristics in,

4, 40-41

problem areas in grain system of, 5-14, 252-254

production characteristics and trends, 29, 31-33

soybean cultivars release and lifetime in, 119, 120

storage and handling practices in, 38-39

utilization of grain produced in, 33-35, 94

variety of wheats grown and exported by, 91, 93

United States Grain Standards Act (USGSA)–1916

amendment to, 234

grain regulation standards and responsibility

established by, 13, 42, 189, 190, 191, 196-197,

200, 201, 210

policy options involving inspection under, 24, 25,

263, 264-266, 268

United States warehouse Act, 43

U.S. Wheat Associates, 62

Utilization

quality attributes and local consumer wheat, 89,

91-93

of U.S.-grown corn, 33-34

of U.S.-grown soybeans, 34-35

of U.S.-grown wheat, 33, 92-94

Variety

control in major grain exporting competitors, 241,

247

development time for release of new grain, 109-110,

122, 130

farm programs’ impact on selection of, 225-228

major grain exporting competitors’ marketing by,

244, 247

of U.S.-produced wheat, 32, 64

Variety Release Committee (VRC), 107

Variety release procedures

congressional policy options related to, 17-19,

258-259

for grain, 106-108, 120-122, 128-129, 130

Virginia, 115

Western Europe

U.S. grain exports to, 35

wheat consumption and import trends in, 93

wheat preference shifts in, 95, 98

see also Europe; European Community; individual

countries in

Western Hemisphere

U.S. grain exports to countries in, 35

see also individual countries

Wheat

adequacy of standards for, 63-64

breeders’ influence on development of, 106-108

case study illustrating the changing nature of grain

markets, 91-98

factors causing variations in characteristics of, 91

genetic influences on quality characteristics of,

104-106

genetic selection objectives for, 103-104, 130

historical development of, 103

milling processes, 33, 50, 51-54

production areas and trends for U. S., 31-32

quality attributes required by end users for, 13, 15,

68-72

technologies used in breeding, 108-113

trends and shifts in preferences for classes of,

95-98

variety release procedures for, 106-108, 130

see also Grain

Yield

influence on wheat class imports of domestic

wheat, 93, 95

interactions in grain breeding of quality, disease

resistance and, 104-105, 116, 126-127, 130

as number one criteria in corn field performance,

129

production trade-off between protein and, 232-234

U.S. corn, 124, 129
Other Related OTA Reports

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Grain Quality in International Trade: A Comparison of Major U.S. Competitors. Assesses the grain systems of Argentina, Brazil, Canada, France,

and Australia includes: overview of each country’s production and markets,

technologies for producing and handling grain, quality control programs and

incentives, and government policy. OTA-F-402, 2/89; 168 p.

GPO stock #052-003-01140-9; $7.50 per copy

Pesticide Residues in Food: Technologies for Detection. Examines existing and emerging techniques for residue analysis of pesticides and their breakdown products in food; addresses Federal research and programmatic issues

relevant to the development and adoption of the technologies. OTA-F-398,

10/88; 244 p.

GPO stock #052-003-01132-8;$10 .00 per copy

NTIS order #PB 89-136 444/AS

Technology, Public Policy, and the Changing Structure of American

Agriculture. Focuses on future and emerging technologies in animal, plant,

chemical, mechanization, and information areas and their implications for

agricultural structure. Also explores linkages between policy and structure

for a clearer understanding of the factors that influence the evolution of the

agricultural sector. OTA-F-285, 3/86; 380 p.

GPO stock #052-003-01018-6; $13.00 per copy

NTIS order #PB 86-184 637/AS

Contractor documents are also available from NTIS

Technology, Public Policy, and the Changing Structure of American

Agriculture: A Special Report for the 1985 Farm Bill. Special report

focusing on three main policy areas of the reauthorization of the

Agriculture and Food Act of 1981: commodity, credit, and research and

extension. OTA-F-272, 3/85; 100 p.

NTIS order #PB 86-184 637/AS

NOTE: Reports are available through the U.S. Government Printing Office, Superintendent of Documents, Washington, DC 20401-9325, (202) 783-3238; and/or the National Technical Information Service, 5285 Port Royal Road, Springfield, VA 22161-0001, (703) 487-4650.

U . S . GOVERNMENT PRINTING OFFICE : 1989 - 88-378 : QL 3