U.S. Grains Council uses quality assessment program to keep tabs on grain quality
Jan Shepel
Associate Editor
WISCONSIN DELLS
The crop and harvest of 2009 created a set of challenges for farmers and for livestock operators who are now feeding that corn. It is also creating a set of challenges for grain exporters and for the U.S. Grain Council, a body supported by checkoff dollars that helps build grain demand around the world.
Tom Dorr, the new president and chief executive officer of the council, talked with growers and farm reporters last week at the Corn/Soy Expo about the challenges of selling grain and building markets in foreign countries.
“It’s rearranging the deck chairs,” Dorr said, as some countries opt to import grain from other sources. The council noted early on the emerging issues of mold and potential toxins in the corn crop and shared that information with market managers as well as things they needed to do. They intensified their quality assessment program and decided it was best to get as much information as quickly as possible about the quality of the grain.
With improving information technology, Dorr said he’s hoping they will be able to do that even more quickly and put more information out.
In many countries the concern level isn’t elevated, he said, by worries about toxins. “Right now the dangers are very minimal, but we will have to monitor that day after day after day.”
One way they’re dealing with it is to be open and honest with their foreign contacts. “When we have a problem we’ll tell you about it and when we have a great crop we expect to get paid for it,” he said.
“That’s the thing with Mother Nature,” he said. “Somebody else will have a problem and we’ll have a great crop. Sometimes it’s the other way around.”
Dorr sees Vietnam and China as places where the grain market can be grown. Although, he added, the Chinese are clever people who always surprise him with their inventiveness. China has doubled its corn production. “We’ve had an office there for 20 years and haven’t sold any corn there,” Dorr said.
Latin America and the Caribbean nations are all places where he sees growth potential for U.S. grains. “There are 300 million people in the Caribbean basin,” he said, and the grains council is exploring the idea of shipping complete feeds to some of those areas.
One way the grain council is building markets is to sell differentiated products. Grains from the ethanol distilling process can be very different in composition and there are ways to find better markets for those products. One thing the council is looking at is whether or not they have the right product lineup for various export markets.
It may also be a question of providing grain in the right sized loads. Maybe a foreign customer can’t use a boatload, but can use a smaller amount delivered more often, he said. Packaging and identifying the markets’ needs are two ways he hopes to grow exports.
Dorr said the greatest potential market by far is still livestock feed. Countries where the standard of living is rising and the middle class is growing will see increased demand for meat, milk and eggs and the grain crops are vital to producing those commodities.
“There is a huge market growth potential from poverty reduction,” he said. When a family of four moves beyond an annual income of $1,000 they typically move from subsistence to a situation where they demand more protein in their diets – meat, milk and eggs – he said.
Even with ethanol use up, we still have more than 3 billion bushels of corn available for export, he said. “We have the supply.”
In some countries, he said, the challenges are internal – corruption and lack of domestic security prevent grain deals. Russia and Ukraine are examples where the rule of law is lacking and conducting business is difficult. One exporter told him that for every load of corn he sells, he has to spend as much for security.
In some countries a lack of infrastructure prevents grain trade from growing.
Since it is the 50th anniversary of the council, Dorr explained how it began. In 1959, Tokyo and the rural regions near it suffered a serious typhoon and an Army officer from Iowa was there to see how devastated the region was.
Along with the Foreign Agriculture Service, Iowa farmers organized to send 60,000 bushels of corn in bags to Japan. An Iowa farmer also donated 36 breeding hogs that were flown in the belly of a cargo plane from Des Moines to Tokyo. The farmer flew with them to make sure they did alright, said Dorr.
The gestures created a strong bond between Japan and the state of Iowa and resulted in the formation of the U.S. Feed Grains Council. Government money along with producer money from checkoffs got the council started.
While many counties are looking to livestock to help their people have better diets and better health there are different challenges here. Livestock producers face growing attacks from animal welfare and animal rights groups. “This battle’s not going to be easy,” he said, and groups like the Humane Society of the United States are spending huge sums of money to target livestock production.
The industry needs to be aggressive in countering their message, but it’s hard for producers. “We can’t acclimate ourselves to the fact that people are coming at us with a baseball bat. We are not accustomed to dealing with people who don’t value the same things we do.”
