4% Moisture Canola

[TOM4CWB]

WD9,

A good chunk of this harvest of Canola is around 4%.

I can't help but think the 48% oil it contains, and the shrinkage we have... is worth at least 4% of the value of the Canola... or $12/t

What can we do to retreive this value back?

Mallee; I understand on wheat the Aussie system pays a premium under specific moisture levels... does this apply for the Canola grower as well?

Where is the CGC on this one... why have they not fought for a fair system for growers?

[WRAPper]

Tom
I tried to have a discussion at the CGC around As dry matter basis, A year or so ago I didn't get support from anyone including CWB or any other producer groups.

[WRAPper]

You Might find this interesting Tom.
Its long and I apologize for that.
Consider also the 13.5 malt barley moisture thing without a price adjustment for shrinking VS feed at 14.5. Where can I find someone on the ABC to work on this HMMMM??

The Equivalent Bushel Concept
Lowell Hill
Department of Agricultural and Consumer Economics
University of Illinois, Urbana-Champaign
[This paper includes excerpts from other authors, published in
"Adjusting for Moisture: Proceedings of An Equivalent Bushel Workshop]
Grain handlers and processors cannot pay grain prices for excess water. Consequently they have developed procedures for adjusting the value of high moisture grain, either by calculating the weight of the grain at base moisture, or by adjusting the price of grain that is delivered at moisture levels above the base. Procedures used for making adjustments for different moisture levels in grain include a price discount, a shrink factor, drying charges, and load averaging.

Adjustment in price is accomplished through price discounts in which each excess point of moisture results in a given reduction in the price per bushel. The discount can be uniform for all moisture levels or it may be graduated to approximate the difference in cost of drying from different beginning moisture levels.

Adjusting the value by adjusting the quantity is accomplished through use of a shrink factor which is based on a mathematical formula for calculating the quantity (bushels) remaining at a base moisture content, when grain is dried from a higher moisture level. The formula allows the buyer to calculate the remaining bushels after drying without actually drying the grain. This is sometimes referred to as "pencil shrink", because the shrink is calculated, rather than measuring actual weight loss during drying. Quantity adjustments are usually accompanied by drying charges that reflect the cost of drying. These charges may also be used to cover other costs, as well as to generate income for the firm.

Load averaging consists of averaging the moisture contents of different loads delivered by the same seller. Price, quantity, and discounts are based on the average moisture content. This allows the seller to offset the potential loss from discounts for grain delivered at moisture levels above the base, with the extra dry matter delivered in grain at moisture contents below the base. Payment is made on an average moisture content for all loads delivered. The end result is similar to that achieved by physically blending the grain before delivery.

Use of the price discount as the only adjustment for moisture, requires changing the discount rate whenever the base price changes; otherwise the returns to drying will vary widely. Since prices are continuously changing, the price discount method requires frequent review to keep the costs and returns in balance for farmers and for elevators.

Load averaging provides greater equity among loads delivered by any one producer, but does not address the question of equity among producers. The value of grain below the base moisture can only be realized if the producer has an adequate supply of higher moisture grain to offset the weight loss on grain delivered below base moisture. Load averaging reduces the opportunity for the buyer to generate blending income. In effect it gives the farmer the benefit of blending on paper.

The adjustment of value by calculating the equivalent bushels at a base moisture allows buyers and sellers to separate the effect of differences in quantity from the differences in price that result from different moisture contents. If the shrink factor is used solely to calculate the quantity differences at various moisture levels, then price discounts and premiums can be used to reflect differences in value as a result of quality or cost. The value of the shrink (value of the weight lost during drying) is converted directly into value at the current base price. When price discounts or shrink factors are used to cover both the quantity and price effects of moisture, the implied returns to drying vary with changes in quality and costs of drying. With the equivalent bushel concept, the changes in quantity, quality and cost of drying are each clearly stated as "remaining bushels", "quality discounts", and "drying charges". Drying charges can be set to cover costs of drying without regard to grain price or shrink factor.

Most elevators adjust the quantity of corn when moisture levels are above the base, but seldom adjust the quantity of grain when moisture levels are below the base. One argument for not adjusting quantity for below-base moisture is that moisture influences quality as well as quantity. For example, there is a tendency for increased breakage of corn that has been dried to low moisture levels to create quality problems for some industrial users. These processors use the weight loss in low moisture grain as a proxy penalty for detrimental effects on quality. The increased use by country elevators of shrink plus drying charge to adjust the value of grain containing different moisture contents increases the transparency of the price signals. The Equivalent Bushel Concept takes this strategy one step further to provide additional clarity of market signals and incentives.

The concept of including moisture in the calculation of the quantity of grain, to compensate for differences in moisture content, is not new. E.G. Boerner, in a bulletin published October 17, 1916, suggested that the value of grain should be determined on the basis of its dry matter content. The 1941 edition of the Minary charts used a similar concept, recording the "net bushels remaining" to describe the adjusted quantity. Boerner and Minary both used tables that were calculated by dividing the dry matter content in the wet grain by the dry matter content in the dry grain, and multiplying that ratio times beginning weight or bushels. Shrink due to water loss was calculated by subtracting the remaining quantity from the beginning quantity. The formula is the same for all grains, but a different ending moisture results in a different shrink factor. The base moisture is set by the market and is different for different grains, but it also differs over time and among elevators (Table 1). The use of the shrink factor by grain buyers provides an estimate of the equivalent bushels at any given base moisture, and demonstrates commercial use of the equivalent bushel concept (EBC).

Table 1. Percent of Elevators Using Different Base Moistures when Purchasing Grain

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Moisture Corn Wheat Soybeans Sorghum

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< 13.0% 0.2 6.8 3.8 2.8
13.0% 0.4 20.1 92.8 4.2
13.5% 0.5 69.4 2.1 2.1
14.0% 3.0 3.1 1.3 84.6
14.5% 1.7 0.6 0.0 4.9
15.0% 77.0 0.0 0.0 1.4
15.5% 16.9 0.0 0.0 0.0
16.0% 0.4 0.0 0.0 0.0

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Number Responding 574 517 526 143

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Although EBC is based on the quantity of dry matter in grain, it differs from the concept of "dry matter pricing". The term "dry matter pricing" usually refers to either (1) quoting a price on the basis of the pounds of dry matter in a bushel, or (2) subtracting the weight of water from the total weight to obtain the "transactions weight" to be multiplied by the base price to determine payment. Dry matter pricing, using the first method, would require calculating the pounds of dry matter in a bushel and quoting the price in terms of cents per pound of dry matter. For example, a bushel of corn at 15% moisture contains 47.6 pounds of dry matter (56 x 0.85 = 47.6). At a base price of $3.50 per bushel of corn at 15% moisture, the equivalent price would be $0.074 per pound of dry matter ($3.50 x 47.6 = $0.074). Dry matter pricing, using the second method would require adjusting the base price per bushel to reflect the value of the dry matter. For example, a $3.50 base price for one 56 pound bushel of corn at 15% moisture would have to be adjusted to a $4.12 base price per 56 pound bushel for the 0.85 of a bushel left after subtracting water ($3.50 x 0.85 = $4.12). Either of these pricing methods would require a change in the base for price quotations.

The equivalent bushel concept does not require a change in the base for price quotations, because price would be quoted at the base moisture content currently in use in the market. The quantity at any moisture content would be adjusted to the equivalent quantity at base moisture. Market prices would be unchanged and the adjustment would be made in the quantity, not the price. The equivalent bushel concept makes no judgement about what premiums or discounts for quality the elevator ought to make, if any, in either the wet or the dry grain. In its simplest form, the equivalent bushel concept consists of calculating the remaining bushels at a base moisture content from any beginning moisture level. The procedure used by a buyer of grain when applying the equivalent bushel concept would either be to apply the formula with the use of a constant entered in the computer, or with a simple calculation based on the ratio of dry matter at two moisture levels, or by using a table such as Table 2.

The following example illustrates the principle of the equivalent bushel concept for grain with different moisture contents.

A producer has a field of wheat that will yield 60,000 pounds if harvested at 13% moisture. The producer has the choice of harvesting that field at 16%, 13% or 10% moisture, by early harvest or for the wheat to dry in the field. If we ignore field losses, the producer can deliver 62,143 pounds at 16%, 60,000 pounds at 13%, or 58,000 pounds at 10% (Table 3). The producer has harvested and delivered the same amount of wheat from the same field at all three moisture levels. The bushels recorded by the elevator will be 1035.7 bushels at 16% moisture, 1,000 bushels at 13%, and 966.7 bushels at 10% (Table 3). The dry matter in the wheat is the same at all three moisture levels, but the elevator’s scales will record an extra 35.7 bushels at 16%. However, that extra 35.7 bushels is water. The elevator will not pay the producer wheat prices for the extra water, and will either adjust price or quantity. If the producer brings in 10% wheat, the lower weight of 58,000 pounds is recorded as 966.7 bushels. In most cases that is the number of bushels that will show on the settlement sheet and will be the bushels used to calculate the dollar amount on the farmer’s check.

Table 2. Equivalent Bushels for Selected Moisture Contents (Assumes 1000 bu. beginning weight)

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Beginning
Moisture Base Moisture
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13% 14% 15%

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10% 1034 1047 1059
11% 1023 1035 1047
12% 1011 1023 1035
13% 1000 1012 1024
14% 989 1000 1012
15% 977 988 1000
16% 966 976 988
17% 954 965 976
18% 943 953 965
19% 931 942 953
20% 920 930 941
21% 908 919 929
22% 897 907 918
23% 885 895 906
24% 874 884 894
25% 862 872 882

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Table 3. Effect of Moisture Content on Quantity of Soybeans

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Moisture Content Scale Weight (lbs.) Nominal Bushels Dry Matter (lbs.) Equivalent Bushels

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16% 62,143 1,035.7 52,200 1,000
13% 60,000 1,000.0 52,200 1,000
10% 58,000 966.7 52,200 1,000

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Using adjustments in prices, discounts, or shrink factors to compensate for differences in the value of soybeans delivered at different moisture levels results in confusion in the returns to drying because of the interrelationships between quantity, quality, drying costs, and blending income. The equivalent bushel concept would simplify the calculations required to match total payment with value, by separating the quantity adjustment from quality and cost considerations. The quantity in the above example would be 1000 bushels at all three moisture levels. The buyer could then set discounts and charges to reflect quality and costs of handling and drying.

This example illustrates the basic issue in the debate over EBC — do the current methods of adjusting for differences in moisture allow the market to accurately match payment with true value? This question identifies the issue as one of equity among loads and among sellers with grain of different moisture levels. The issue is not one of allocating income between producers and grain handlers, nor does it have the goal of increasing farm income. Those issues are related to competitive forces in the market, not to moisture content.

The EBC cannot be implemented without a trade off between costs and benefits among market participants. This raises several questions that have been the focus of the debates.

How does moisture content affect the value of grain for different uses and at different stages in the market channel?
What market signals are sent by the different methods of adjusting for various moisture contents?
How will the EBC affect costs and returns in the different segments of the grain producing and marketing industry?
Will grain quality be improved by changing the method of adjusting for different moisture contents?
The following excerpts from papers presented at a workshop on adjusting value for different moisture levels, identify the positions of some producer and industry representatives.




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The Illinois Farm Bureau
Ron Warfield
President of the Illinois Farm Bureau
We support:

The United States Department of Agriculture’s efforts to improve standards for grain which will reflect storability and highest potential use.
Moisture as a measurement of quantity, not quality.
We will:

Maintain close liaison with the USDA to ensure the proposed grade changes are in the best interests of producers with particular attention to the proper role for grade factors such as test weight, foreign material and other quality factors such as breakability.
Encourage an effective grain discount schedule that is determined at time of contract instead of time of delivery.
Work with the USDA, private agencies and the State Department of Agriculture to develop and adopt more accurate equipment and procedures for testing moisture percentage and test weights in grain.
Encourage the State of Illinois and USDA to continue testing, developing grading standards and identifying various qualities of hay and grain.
Support changes in grain grading standards to compensate producers for high quality products.
Support research that identifies the advantages and disadvantages of selling grain on a value-based or component-pricing basis.
Support efforts to maintain grain quality in transit.
Support efforts to market grain by the hundredweight rather than by bushel measure.
Support efforts to standardize and certify local elevators’ aflatoxin testing equipment and operators and accept their test results for multi-peril crop insurance loss payments.
Support changes to have processors and elevators show documented economic justification for all discount rates concerning grain quality degradation, i.e. test weight, off-color, odor, or moisture.
Study the present usage of grain discount schedules with Illinois’ grain dealers, warehousemen, and the Department of Agriculture. The study should outline the usage of discount schedules, how they are determined, and how they are applied at various times by grain elevators. This study is to be completed by June 1, 1996.

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National Corn Growers Association
Ron Swanson
Iowa farmer and member of the Iowa and National Corn Growers Associations
The National Corn Growers Association has had resolutions supporting the concept of dry matter or equivalent bushel pricing for several years. The actual language has varied at different times reflecting the philosophy and understanding of the issue by the delegate body. Early language (1985) stated "Call for studies to determine the practicality of the grain industry’s conversion to the use of an equivalency bushel basis for grain pricing." Later (1991) this was changed to read "Changing grain grading standards to give sellers credit for dry corn on a dry matter basis." The current position was adopted in 1994 and reads "Changing grain merchandising standards to equivalent-bushels at a base moisture of 15.5%."

These various resolutions have not always been accepted unanimously by the delegate body. The wide range of comprehension and background on the issue by the delegates has made it difficult to come to an agreement.

While there has been confusion among producers on the issue, they do understand that the market does not reward them for delivering grain that is below the base moisture and yet are penalized for grain that is above that level. Further they feel the grain handling industry is able to take advantage of this variation in delivery moisture as they commingle the grain into a uniform lot for the end user. Because of this, producers have become frustrated in trying to determine how to deal with it.

This frustration was reiterated again recently during the Iowa Corn Growers Association annual meeting when they adopted a resolution that states "We encourage the grain marketing industry to recognize the economic benefit they receive when producers deliver corn below 15 percent moisture and reward producers with a higher price."

While I support the equivalent bushel concept, it has been my opinion that, in the case of corn, there needs to be a range of moisture limits where it applies. I feel that there is a trade off between lower moisture and the potential for it to break during handling. There needs to be some mechanism to discourage producers from overdrying corn. Perhaps a statement such as "The value of grain should be recognized on an equivalent bushel basis with appropriate penalties for corn delivered above or below a specified moisture range" should be considered.


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A Producer’s Perspective
Lance Leebrick
Grain producer on a 3500 acre farm in Northwest Kansas
I have long been concerned with the inequity that exists when grain moisture content, as related to value is not taken into account for the whole spectrum of possible moisture content. From my perspective, the industry does an adequate job of addressing high moisture grain dockage, but a very poor job of assessing the value of low moisture grain.

It appears that all grains are subject to concerns with very low moisture, but since wheat is the grain I am most familiar with, I would like to emphasize it in my discussion. The high plains wheat producer is hit particularly hard because of the conditions under which the crop is harvested. it is not at all unusual for temperatures to be in the 100 degree range with relative humilities of 10-15% and 20 to 30 mph winds during this time. The result is often extremely dry grains being harvested, 8-9% not being unusual. It would be interesting to know what the equilibrium moisture content would be for grains dried under those conditions, but suffice it to say that the result is extremely dry grain. It is common for producers to attempt to capture higher moisture contents by harvesting early and aggressively, putting in long hours and occasionally to the extreme of harvesting around the clock. This situation obviously has safety concerns that should not be ignored. To be fair, there are some wheat harvests when high moisture grain is a concern throughout the duration. More common is the case of very dry grain being harvested.

When one goes through the calculations involved in determining the value of the extremely dry grain, it is astonishing to realize the potential losses involved with delivering very dry grain to the local elevator. An example is in order: According to the August, 1984 issue of Successful Farming to raise wheat moisture content from 8% to 13.5% requires adding 3.8 pounds of water added per bushel. For a 1,000 bushel truckload this requires the addition of 3,800 pounds of water to bring the load to base moisture content. Converted to bushels, this 3800 pounds is the equivalent of adding 63.3 bushels of grain to the load at almost no cost to the producer. After all, just how expensive can it be to pump 456 gallons of water? Maybe 10 cents from a deep well. The value of this 63.3 bushels of wheat at $4.00 per bushel would be $253.20. As this figure is multiplied by the number of truckloads typically produced by a farmer with 1,000 acres of wheat yielding 40 bu./acre, the gain translates to $10,128. With potential profits of this magnitude and detection of water addition being virtually impossible, it is a given that water will continue to be added to grains. The unfortunate part of this is that those producers who would like not to break the law, are at a great disadvantage to those who do. In order for a ruling to make sense, it must be equitable and enforceable. The ruling against adding water in its current form fits neither category.

It is interesting to note the amount of effort put into insuring the accuracy of scales; periodic checks of most scales by governmental agencies are the norm, from grain elevator scales to grocery store scales. If an elevator scale was off by 100 pounds, the inaccuracy would result in someone losing (or gaining) approximately $6.70 worth of wheat when a truck rolls across the scales. Many would find this unacceptable, but it is a small amount indeed when compared with the $253 per truckload loss that would result from delivering very dry grain, a discrepancy 38 times as large! From the producers’ standpoint, equal pay for equivalent products is the goal.

Those of us involved in production and marketing of grain must ask ourselves this question, Do we wish to continue to labor under a system that promotes this inequity, or do we want to correct it? It seems the solution to this problem is fairly clear -- determine the true value of the product being delivered and pay accordingly. True value is determined by knowing the weight of dry matter delivered, and can easily be calculated after a moisture test. If compensation for grain is calculated based on true value, the motivation for adding water is eliminated. Until such time as the true value, equivalent bushel, or standardized bushel concept is implemented, it is certain that water will continue to be added to grain. The ideal solution to this problem would appear to be industry-wide use of the equivalent bushel concept. Until this approach is widely used, a case could be made for legalizing the addition of water to grain with the following justifications:

Adding water does not affect the safety of the product.
Adding water gives the producer a method of obtaining equitable compensation for his product if other simpler methods are unavailable.
Adding water would allow grain handlers the freedom to blend grains as needed or rewet where profitable without the onus of having taken advantage of producers who have delivered dry grain, i.e. there will be no deception involved since rewetting would be legal.
Seemingly, the most useful approach is the equivalent bushel approach because of its simplicity and efficiency. The additional time and labor required for rewetting make it less than ideal if a better solution is available. Admittedly, additional cost to grain handlers will be incurred because of having to test loads that would have otherwise been labeled "dry", and unloaded without testing for moisture. Producers may have to share this burden in the form of higher discounts for the higher moisture grain or some other market-driven discount. I believe few producers would object to this arrangement, knowing that a more equitable pricing system is in place. If efforts toward this change can be made jointly and cooperatively, the results will be well worth the effort.


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A Flour Miller’s Perspective on Grain Moisture
Tony Flagg
President, Pendleton Flour Mills, Pendleton, Oregon
A flour miller has two concerns when dealing with grain moisture. One concern is functional, and the other is financial.

FUNCTIONAL CONCERNS
In order to achieve a thorough separation of the bran and the endosperm, and in order to achieve the maximum yield on the mill, it is necessary to add 3-4 percentage points of water to the grain shortly before milling. This is called tempering and the resultant weight gain is called temper gain. At the same time in order to insure that the flour will not go bad because of excessive moisture it is necessary that the flour produced not exceed 13.5 to 14.5% moisture. Approximately 2 percentage points of moisture is lost during the milling process. Considering the parameters of temper gain, acceptable flour moisture, and moisture loss during manufacturing, the maximum moisture preferred by millers in their wheat is in the 9 to 10% range. However, within a particular region the nature of the crop and the climatic conditions can be such that millers are often called upon to deal with wheat as high as 12 and even 13% moisture. Conversely, in many regions, wheat dries to 8 or 9% at harvest, resulting in wide ranges of moisture content of wheat delivered to the mill. Through judicious wheat blending and careful milling, millers can meet this challenge and still produce acceptable and even superior flours.

FINANCIAL CONCERNS
Beyond the functional implications of grain moisture, the flour miller is concerned with the financial implications of grain moisture. Water is cheaper than grain, and to the extent that any lot of wheat is low in moisture, that allows the miller to add water to the product. Because of the competitive nature of the flour milling industry, the normal weight gain associated with the tempering process is factored into the average price. However when wheat is low in moisture relative to any particular miller’s experience within a region, the extra financial benefit associated with the low moisture grain in question will typically be thought of as a bonus and the financial benefit will flow to the miller’s bottom line.

GAINS AND LOSSES IN ZERO-BASED PRICING
In a grain trading system based on dry matter, moisture would be treated as dockage and subtracted from the weight. For example if the price of wheat is $4.00 per bushel at 14% moisture, the quantity would be reduced at delivery: 1000 bushels scale weight would be reduced to 860 bushels. Market prices would adjust to retain equivalent value. Average payment for the entire crop would probably not change, but the financial benefits from adopting the dockage concept for moisture would accrue to those farmers who are currently delivering wheat below the base moisture. Those farmers who are currently delivering wheat at moisture levels above the market base, will be net losers. The change would not change the value of the total crop, or the competitive margins of handlers, so there would be no transfer of income between producers and millers.

Since millers operate in a system that normally gives them acceptable grain moisture levels, and since millers operate in a system in which the financial benefits of low moisture grain flow to the miller, it is likely that many of this country’s millers would oppose or at least seriously question the desirability of adopting a zero-based moisture system for gratin settlement purposes. Ironically, despite the fact that a zero-based moisture level for settlement purposes means more money, at least in some farmer’s pockets, it is likely that many farmers as well as millers, would also question the desirability of this contemplated change in grain trading procedures. A loud objection should be anticipated from those farmers in regions that historically raise high moisture grain. In addition, one might expect to hear objections from farmers who question if the net loss in weight resulting from subtracting the weight of water from the scale weight, would be compensated by higher prices. However, it is clear that there would be an adjustment in base prices to maintain the current distribution of profits which has been set by the competitive forces in the market — not by the moisture content of the grain.

Despite these likely objections, I personally feel that, at least for wheat, a fixed moisture level for settlement purpose is highly desirable. In fact, I would take it one step further and say not only should moisture be fixed, but all those elements of grain that do not contribute to making either flour or bran should be eliminated for settlement purposes. Simply put, that means "foreign material", "shrunken and broken", and "‘damaged kernels" should be treated as dockage and not paid for, or, if it is paid for, it should seek a market value as feed. This suggests adjusting quantity to the equivalent quantity of clean, sound, dry wheat not unlike the system used in some other countries where millers are the primary users of wheat.1

While as a miller I am frustrated with having to pay wheat prices for feed, my comments here are largely driven by my experience in the international wheat market. I am growing increasingly concerned with the inability of the US wheat market to meet the demands of our overseas customers and to match or exceed the wheat quality of our major competitors, in particular Canada and Australia. The problem as I see it is that our grain trading and handling system is designed to maximize the producers’ opportunity to access the food value associated with wheat and avoid whenever possible those situations where the value of the wheat in question is feed. We do this by providing financial incentives to the grain trade to blend lower grade wheats with higher grade wheats and in so doing we produce a product that represents the lowest common denominator within any particular grade. Our competition on the other hand, prohibits the blending of dissimilar grades or varieties and consistently provides a cleaner product with more consistent milling and functional baking characteristics at a competitive price. As end users in other countries supplant government or quasi government buying agencies in purchasing their own wheat, the U.S. can expect to be more and more pressed at the point of sale in the area of quality. Millers in the international markets will be more specific and discerning of quality specifications than government purchasing agents.

To maintain market share in the world’s grain markets, the US must resolve it’s grain quality dilemma. To solve the grain quality dilemma we need to alter the financial incentives currently in place in our grain trading and handling structure. If we expanded the definition of dockage to include all those elements that do not contribute to the production of flour, the incentive to the grain trade would be to not degrade our wheats by excessive blending, but rather to clean grain as it moves through the system and sell the by-product as feed. Buyer’s complaints in this area would be answered in that not only would US grain be cleaner, but any dockage that was present in any lot of grain would not represent an economic loss to the buyer.

In conclusion, the flour miller wants the same thing that any other business person wants: value for money paid. In the flour millers’ case, that means good sound wheat; not water and dockage.

1 For example, China’s wheat grades are based on purity, using quantity or quality adjustments if purity is below the base for each grade. In Russia, grade is determined by gluten content. Deviations from base levels of damage, foreign material, etc., are accommodated by subtractions or additions to the scale weight.


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The Inaugural National Wheat Industry Research Forum Proceedings
San Diego, California
January 14 and 15, 1998


.

[silverback]

We had big money deducted last year due to moisture levels of over 14.8%.

I too was wondering how much I should be getting as a premium now that our grain is below 9%?

Let me guess, none.

[wd9]

Silverback, the premium is in customers not as pissed off that we have tough grain to sell. Sometimes we lead the dance, sometimes they do. The Japanese were not impressed with our canola moisture last couple years so to keep relations on par, dry canola for this year is a good thing. A happy customer is a good customer.

Dry matter, good idea in theory, but all grains are traded with moisture in them and function at a particular level. The problem is the farmer gets paid, but so what, the bulk gets sold internationally with moisture included. Either we all do it or none, but not just the farmer. That is the problem.

[grrrr]

Hi; Just returned from a wheat growing area in Australia. Crops were the worst ever.(Western Australia) They get $1.00/t for every 1/2 point of moisture below 12.5. So if you delivered 12.5% moisture wheat you would get the base rate. If your wheat was 10% moisture you would get $5.00 extra/t and so on. The farm I was at averaged 9% moisture last year so he got an additional $7.00/t. Not sure if the same applies to other crops but I know they do get extra for higher oil content and of course less for lower oil in canola.

[rook]

I've heard rumours about spraying water on grain before selling? Is that true?

[grrrr]

I've heard of guys adding water with canola around here but it should't come to that. They dock us when grain is tough but then they should also credit us when grain is axtra dry.

[WRAPper]

50) ConAgra Inc.
Type of Crime: Fraud
Criminal Fine: $4.4 million
11 Corporate Crime Reporter 12(1), March 24, 1997


ConAgra Inc., one of the nation's largest food companies, pled guilty to federal charges of adulteration, misgrading, and misweighing of grain.

The company agreed to pay $8.3 million in penalties, including a criminal fine of $4.4 million.

Federal officials alleged that ConAgra used several schemes to defraud farmers and grain buyers to increase their own grain inventories and profits. Soybeans were purposefully misgraded, allowing ConAgra to pay less to the farmer, yet sell at higher prices. Water was added to grain inventories, thereby adding weight and increasing profits when grain was sold. And ConAgra significantly misweighed grain being sold to end users.

[TOM4CWB]

Rook,

I believe a call to the CGC will result in a finding that it is illegal to add anything to grain... including water.

[ianben]

4% moisture canola is regected here in uk as too dry to slice. Aparenly they slice the seeds before they crush and below 4 it just shatters.
We are paid on 9% with increases down to 5% and deduction up to 10% any higher and again regected
2% admixture is base with payments increases for better and deductions up to 4% then regected.
oil base is 40%again with bonuses up and down

My best bonus to date has been £17.30/tonne.

The only time I had canola below 4% I airated with damp air, when it was raining, and was soon up to 6%.

[rook]

Interesting that it is fraudulent to add water - shady, yes, but I wouldn't have guessed it was fraudulent if one is just bringing grain up to standard specs. I agree with grr, it shouldn't come to that - don't ding me when it's tough if you won't reward me when it's overdry.

[TOM4CWB]

Ianben;

That is an excelent way to solve the problem! Turn on the fan!

[poorboy]

There has been lots of discussion in the US on adding moisture to grains to increase pay weight. This is deemed to be illegal.

However in doing internet searches there are lots of cases (court rulings as well), where the grain has been rewetted to improve its storage, and this has been proven to be LEGAL. The thinking is that very dry, very hot grain has lots of storage issues and running a fan to cool this grain and add moisture to reduce its cracking, peeling, and other things on rehandling is perfectly legal. You are not deliberately adding weight, you are deliberately improving your handability and storage of your product, which is perfectly legal.

I took it that adding moisture by fan is legal, adding by garden hose to your truck is illegal.


On a side note, it you add moisture to a bin of 9% wheat, with a fan, the wheat is going to swell and exert tremendous upward pressure on a grain bin. It might split the bottom of the bin open instead of pushing the whole column of grain upward.

[MBFarmer1]

Surprised to hear that nobody has added water to canola. One producer in my area has sprinklers set up with their loading bin. This setup has always worked well for him., As far as the legality of it, give me a break!!! Who is going to enforce something like that? Cargill calls the CGC on some farmer and gets CGC inspectors to come on to the farm? Likely not. I think this is an example of how farmers play in an industry where the buyers do everything possible, in terms of stretching and sometimes even breaking the rules to maximize profits but we as farmers are not willing to do the same because it may be labelled as "shady". Why is it shady to bring your product right up to teh required specs? Grain companies charge us for cleaning, dock us for dockage, then turn around and add that dockage right back into the grain at port so their shipments barely meet spec. Is this considered shady? No jsut business as usual. If the farmer however does something similar he is shady. Seems a bit of a double standard to me.