50% of US Grain Handlers Plan to Segregate GE & Non-GE Grains

50% of US Grain Handlers Plan to
Segregate GE & Non-GE Grains

October 23, 2001
IP (Identity Preservation) a must as industry moves to grains developed for
users; identity preserved

By: MichaelL Howie

ROSARIO, ARGENTINA -- For centuries, handling and storing grain has
been a routine and simple process, even though there have been technologies
developed that alter how it is done, according to Jim Voight, vice president
of operations for Archer Daniels Midland Co.

Speaking at a grains conference here last week, Voight said this "routine
and simple" task has changed in just the last few years, that the global
marketplace has changed and "how we market and use grain must change" as
well. Voight said like grain producers, consumers have more choices in where
their food comes from and how that food is produced. Because of this, he
said, more and more buyers are looking for specific qualities in their grain
and not just "bulk grains" anymore. New seed genetics have been developed
for specific end users or for agro-nomic purposes, he said, such as high-oil
corn, hard-endosperm corn, Bt corn and herbicide-resistant corn and
soybeans. These specialty grains have different markets driving their use
and demand, Voight said, and therefore how they are handled must be
different, too.

Voight said no matter where grain is produced -- the U.S., Brazil or
Argentina -- such specialty driven markets require smaller capacity storage
and movement, higher quality grains and more efficient clean-out procedures.
"Grain handlers must understand their place in the marketplace," said

Voight acknowledged that what he planned to speak about a couple of months
ago changed just a few weeks ago when a variety of corn that was not
approved for use in food was found in taco shells. As a result, he said, the
entire industry must find a way to handle the situation. He said genetically
modified (GM) grain is not a bad thing, and that there are advantages for
its use, but that a "defined protocol" must be established to handle certain
grains, to keep their identity preserved (IP) throughout the entire system.
Voight said everyone, from producers to processors, must understand what the
market is for their products -- such as feed, food, processing or exports --
because each market requires different things. "You must know your
customers," he said, because "ultimately it comes down to what the consumer
-- the customer -- wants on the table." That, he said, will "make the
decision for us."

As a result of this, he said, handlers must be able to segregate grains by
specific attributes. Of course this relies on the purity of the seed planted
in the first place, he said, but in order to discuss such a protocol, it
must be assumed this is not an issue.

In addition, Voight said, each step in the protocol is critical for any
program to be a success.

Traditionally, Voight said, you could get away with having some foreign seed
mixed in with the bulk grain. Now, howevever, "just one foreign seed" could
cause an entire load to be rejected and cost thousands of dollars.

IP protocol
An IP protocol begins with the producer, Voight said.
Producers must clean planter boxes thoroughly because crossing seed from
cross pollination could effect the entire marketing chain. In addition, he
said, farmers must be educated by seed suppliers and their local elevator in
an IP system, whether he or she is producing non-GM grain, high-oil corn or
other specialty crops.

Again, at harvest, the producer must completely clean the combine, wagons,
trucks, bins and anything else used for grain movement and/or storage.
Records -- from planting through harvest -- and samples of grain should be
kept, Voight said, adding that communication with the elevator on when to
deliver specialty crops is important because the elevator also must have a
clean space for such grain.

"There is a much greater demand on the producer for specialty crops," Voight
said, "but premiums are there."

In reality, he said, producers must form partnerships with elevators and
suppliers, with agreements -- contracts -- covering what varieties should be
grown, quality of the final product, delivery time and premium and discount

In many cases, he said, grower certification may be needed.
Meanwhile, grain elevators must follow a similar protocol when one elevator
is selling to another.

Elevators will need to be certified and trained, he said, and have the
facility inspected for potential contamination points. In addition, Voight
said, elevators will need to have written instructions on clean-out,
inspection and transportation procedures.

This extra work will take time, he said, but elevators like producers, who
can get a 25-30 cent/bu. premium depending on the grain involved, can get a
premium of approximately 50 cents/bu. to cover additional costs and
procedures and paying a premium to the producer.

Some facilities will be better suited for speciality grains, he said, and
that could influence which facilities participate in various programs.
For example, Voight said, an ideal IP facility would have grain testing
capabilities, multiple places to dump grain and "numerous small bins," but
would also be large enough to handle some bulk commodities as well.
Although some of the design options would add an initial expense, he said,
it can be justified "if you're a food company" that handles significant
amounts of specialty grains.

Elevators must take accurate and representative samples of loads of grain,
he said, and because in some cases there is not a quick and inexpensive test
for the grain, the protocol system must be relied on.

"It's a partnership," Voight said. "The elevator must have a relationship
with the producer and make the commitment to train personnel."
Extra inspection and cleaning time, specific handling equipment and other
investments will need to be made by everyone in the system, said Voight.
Each grain facility must be looked at individually, he said, and be analyzed
for what niche it is going to fit into because every facility and market is

Last year in the U.S., he said, a survey showed 8% of grain elevators
segregated grains. This year, Voight said, 25% said they plan to and next
year, 50%.

"This is a real opportunity for the industry," he said, because each member
of the production chain -- from producer to end user -- can receive a
premium and provide a product that consumers want.

Voight was speaking at the third annual "SAC" conference, a meeting held for
post-harvest grain handlers in South America. Voight is also first vice
president for the Grain Elevator & Processing Society in the U.S.

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