MARCH 2007

The Economic Impact of Errors in Moisture Measurements 

Part 2, Grain Moisture Meter Series 

By G. Diane Lee 

Grain is an essential source of the world’s human and animal food supply. According to 

the Agricultural Statistics Board 2006 Crop Values Summary, the production value of 

major grains (corn, wheat and soybeans) in the United States is approximately $61 billion 

(U.S.D.) of the $13.3 trillion U.S. gross domestic product. Inaccurate grain moisture 

measurements can have a large economic impact on the grain market, which means that 

weights and measures inspectors have an important role in the inspection of commercial 

grain moisture meters to ensure these meters are accurate and comply with NIST 

Handbook 44 requirements. Although few in numbers compared to other commercial 

devices, grain moisture meters have a high monetary impact per device. This is the 

second article in a series of articles on grain moisture meters. This article will give 

examples of possible monetary losses due to inaccurate moisture meter measurements. 

For simplicity, this article will include examples based on corn. 

The measurement of moisture in grain is critical because the amount of moisture in grain 

affects its storage and weight. A grain moisture meter measures the percent moisture of 

grain as percent wet basis. When an elevator purchases grain, it measures the moisture 

content to determine if it is higher than the limits for safe storage. If the moisture is 

higher than the set limits, the elevator must dry the grain before storage. Grains must be 

dried because there is an increase in microorganism growth in high moisture grain and 

high moisture grains will spoil. Higher moisture grains also attract more insects and can 

cause chemical and physical property changes in the grain. The grain elevator’s (typically 

the buyer’s) cost for drying the grain is typically a cost passed on to the farmer (typically 

the seller). Also, when grain is dried, moisture is lost and the weight of the grain is 

lowered. Grain is bought and sold based on weight. Therefore, the elevator must recover 

costs for drying the grain and for the reduction in weight. To recover these costs, the 

elevator will reduce the quantity using shrink factors, reduce the price the farmer receives 

using discounts, and assess drying charges or some combination of these approaches. 

Many of these changes and discounts are based on the moisture content of the grain. To 

evaluate possible monetary loss due to moisture, the various charges and discounts for 

grains must be considered. 

 

• Charges and Discounts 

There are a number of charges and discounts assessed by the buyer of grain that reduces 

the price per bushel. These charges and discounts include drying, shrinkage, test weight, 

damage, and foreign material. These charges and discounts may vary depending on the 

grain type and are set by the buyer. The buyer of grain will also set purchasing factors or 

set limits for grain, and grains not meeting these limits or factors may be rejected. 

Descriptions of the various charges and discounts noted above are listed below with 

examples. 

 
• Drying. This is a charge to the seller for drying the grain and may be subject to 

change depending on fuel prices. In reviewing several posted drying charges, drying may 

be charged to the farmer for each percentage of moisture above a set moisture limit or the 

charge can be based on a moisture range and then discounted from a set price per bushel 

the farmer receives for the grain. Consider the example of a drying charge based on 

moisture for corn that is 4 cents for each 1 % moisture over a set moisture limit of 15 % 

and a stated price per bushel of $2.50. If the grain received is at 16 % moisture, the price 

per bushel of grain would be discounted by $0.040 per bushel of grain and the farmer 

would receive only $2.46 per bushel. Examples of a drying charge based on a moisture 

“range” for corn is 4.2 cents for a percent moisture of corn ranging from 15.1 to 15.5 

(i.e., the price per bushel of grain would be discounted by $0.042 per bushel or $2.458 ~ 

$2.46 per bushel); 7.2 cents for percent moisture of corn ranging from 15.6 to 16.0 (i.e., 

the price per bushel of grain would be reduced by $0.072 per bushel or $2.428 ~ $2.43 

per bushel). 

 

• Shrinkage. This is a percentage of the price per bushel charged per increments of 

moisture lost during storage. Grain placed into storage with aeration may shrink. An 

example of a set charge for shrinkage for corn is 1.5 % of the price per bushel for every 

0.5 % of moisture over 15 %. If the corn received is 16 % moisture and the price per 

bushel for corn is $2.50 per bushel, the price per bushel would be discounted by (0.015 x 

$2.50 x 2) or 0.075 cents per bushel. The resulting price is thus, $2.425 ~ $2.42 per 

bushel. 

• Test Weight. A discount for test weight is a reduction in cost for each pound per 

bushel under a target pound per bushel. An example of a discount for test weight is 2 

cents per pound per bushel under 54 pounds per bushel. If the starting price per bushel 

for corn is $2.50 and the corn received is 53 pounds per bushel, then the price per bushel 

would be discounted by $0.02. The resulting price per bushel paid would be $2.48. 

• Damage. This is a charge assessed based on the percentage of damaged kernels 

above a set percentage. The charge for damaged kernels may be 1 cent per percentage of 

damage kernels above 5.0 % (e.g., if corn has 8 % damaged kernels, and the price per 

bushel for corn is $2.50, then the price per bushel is discounted by $0.03 or the price per 

bushel is $2.47). 

• Foreign material. This is a charge assessed based on the amount of foreign material 

above a set percentage. An example of a charge for foreign material is 3 cents per 

percentage of foreign material above 3 percent (e.g., if corn has 7 % foreign material and 

the price per bushel of corn is $2.50, then the price per bushel is 

discounted by $0.12 and the price per bushel paid is reduced to $2.38). 

The Monetary Impact of Errors in Moisture Measurements 

As noted earlier the production value of major grains (corn, wheat and soybeans) in the 

United States is significant at approximately $61 billion. The following examples are 

illustrations of corn, which alone has a production value of approximately $33 billion. 

To appreciate the magnitude of the impact of moisture measurement errors, consider the 
following examples in which an elevator receives 10 truckloads of corn a day. (See table 

on page 4.) In 1996, an NCWM survey reported a total of 8937 commercial grain 

elevators in the United States which buy and sell grain. While the exact number of 

elevators has likely changed since that time, we can use it in our examples to help 

illustrate the potential impact of errors in moisture measurement. Calculations in these 

examples are made using the same methods for discounting described earlier in this 

article. 

 

When examining the possible monetary losses per day and per year of just one grain type 

and the various charges associated with the buying and selling of grain, it is clear to see 

the economic impact of moisture measurement errors in the grain industry. It is also clear 

that weights and measures inspection and evaluation of these meters are extremely 

Examples of Possible Monetary Losses Due to Inaccurate Moisture Measurements for Corn 

Percent 

moisture 

(meter reading) 

Moisture 

error 

(meter error) 

Price per 

bushel 

discounted by 

Discounted 

price per bushel 

Loss per truck 

load 

(547 bushels) 

17 % + 2 % $0.08 

($0.04 x 2) 

$3.12 

($3.20 – $0.08) 

$43.76 

($3.20 - $3.12) x 

547 bushels 

Loss per 

elevator per 

day 

(10 trucks 

 per day)

Loss per 

elevator 

per year 

260 days per 

year 

(5d week)

Loss for all

elevators 

(8, 937) 

per day

Loss for all 

elevators 

(8, 937) 

per year

Example 1 – 

Drying 

Grain: Corn 

Price per 

Bushel: $3.20 

Actual % 

moisture of 

grain: 15 %

Drying 

Charge: 4 

cents for each 

1 % moisture 

over 15 % 

Truck Load:

547 bushels 

$437.60 $113,776.00 

(260 x 

$437.60) 

$3,910,831.20 $1,016,816,112.00 

Percent 

Moisture 

(meter reading) 

Moisture 

error 

(meter error) 

Price per 

bushel 

discounted by

Discounted 

price per bushel

Loss per truck 

load 

(547 bushels)

17 % + 2 % $0.19 

(0.015 x 3.20) x 

4 

$3.01 

($3.20 - $0.19) 

$103.93 

($3.20 - $3.01) x 

547 bushels 

Loss per 

elevator per 

day 

(10 trucks 

 per day)

Loss per 

elevator 

per year 

260 days 

per year 

(5d week)

Loss for all

elevators 

(8, 937) 

per day

Loss for all 

elevators 

(8, 937) 

per year

Example 2 – 

Shrinkage 

Grain: Corn 

Price per 

Bushel: $3.20 

Actual % 

moisture of 

grain: 15 %

Shrinkage 

Charge: 1.5 % 

of the price per 

bushel for every 

0.5 % of 

moisture over 

15 % 

$1039.30 $270,218.00 

(260 x 

$1039.30) 

$9,288,224.10 $2,414,938,266.00 
important to ensure moisture measurement accuracy and compliance with NIST 

Handbook 44. 

The next article, Part 3 of the grain moisture meter series, will address near infrared grain 

moisture meter measurement technology. 

If there are any questions, you may contact Diane Lee of the NIST WMD by e-mail at 

diane.lee@nist.gov, by fax at 301-975-8091 or by phone at 301-975-4405.