In recent years, sharp downturns in global corn and wheat prices have forced farmers to re-evaluate their grain marketing strategy. While hundreds of factors have impacted grain prices over the last decade, the ones that generate headlines typically center on broader macroeconomic issues. Two primary factors include: 1) the surge in corn production from Brazil and Argentina, which has increased competitiveness for American farmers, and 2) the rise of wheat production and exports along the Black Sea, which has created new price challenges for producers in the U.S. and Canada.
Explore this issueFebruary/March 2018
Naturally, shifting dynamics have driven conversations on grain quality at the local level. High-quality grains that meet rigid buyer specifications can capture a higher price. Most farmers know that higher protein content and less crop damage provides the opportunity to fetch a better price. For farmers to get ahead in the midst of continued grain pricing fluctuations, they need to address buyer concerns and incorporate several small, measurable steps into their best practices.
Global Reputations Start at Home
Most farmers already know where their crops are heading, who their buyer is, and what products will be developed from their harvest. But to understand the food quality challenges, they need to look at the broadest possible supply chain to recognize the impact that a few small mistakes can have on end products around the world.
The U.S. Grain Council (USGC) is responsible for marketing U.S. grain to countries all around the globe. Price and quality remain the two primary factors on which deals are based. In a low-price world, the organization has heard more and more about the importance of grain quality.
Tom Sleight, president and CEO of USGC, recently penned an editorial in which he explained how more buyers have increased their complaints about grains arriving on their soil. The list of complaints ranges from broken kernels and dust, to a diverse roster of foreign materials. This might seem like a standard concern, until you dig deeper and learn that the foreign materials include anything from stainless steel bolts and dead animals, to the “occasional” cell phone. These foreign materials did not magically appear at the final destination, and buyers have grown increasingly frustrated by the problem enough to seek alternative sources of grain.
“These concerns can affect our competitive position,” Sleight wrote on the impact of these concerns. “In this marketplace, many customers look at all options—from South America and the Black Sea region.”
Not all of these quality concerns are the direct result of farming operations, many are the result of multiple transfers into different vessels across a dozen time zones. However, it is important to know that whether you are 10 miles from a mill or the first stop of a trip into another hemisphere, food quality control starts at the farm level.
As the USGC explains, farmers can take a few steps to preserve grain quality. These factors can also play a major role in securing a higher price when they bring their grain to market.
Protecting and Preserving Grain Quality
Ensuring grain quality does not need to be a grueling task. Once harvest is complete, four simple steps can protect and preserve grain for when it is time to bring it to market.
1. Understand speed of harvest. In a conversation with Kurt Shultz, director of global strategies, USGC, he says that farmers don’t have a lot of control over events ahead of the harvest. Weather and other key factors can alter the pace and success of the harvest on a year-to-year basis.
However, the speed of the harvest can certainly affect the quality of the grain as it is gathered. Farmers rushing to gather their grain can increase the accumulation of foreign materials. Shultz says that this begins a chain reaction that leads to the accumulation of foreign materials downstream like dust.