Commentary

Rural Voice November 14, 2018

There is only one topic of conversation in the Ontario grain industry today.  That topic is the vomitoxin issue in much of the corn crop.  The problems that arise from this issue affect producers and all users and exporters of corn in the region.  The frustrations at the farm level are large.  Of paramount concern is the valuation and marketability of the crop.  There are frustrations in what seem inconsistencies in testing between one location and another.  There are uncertainties at the farm level as to what coverage a producer might have through crop insurance and what financial compensation will be if a claim is made.  These same producer concerns and sentiments reverberate throughout the grain handling system – from the grain elevator, to the exporter, to the end user likewise.  There is much conversation about solutions to the issue and many proposals are being brought forth to the industry as a whole from a wide variety of market followers and participants.  Unfortunately there is not an easy solution apparent at this time that is a solution which is satisfactory to all participants in the value chain.  High vom corn has less functionality than higher quality corn.  It is because of this lower functionality that it is discounted through the value chain.

Let’s address some of the concerns stated above. 

The marketability and valuations of the compromised corn is subject to ongoing and changing market factors.  As of this writing much of the corn crop has yet to be harvested but progress in the fields is being made.  What we do know is that there are some regions of the province that have incredibly high vom tests.  There are other areas of the province that, while they do have some high results at times, for the most part have corn running on average below 3-4 ppm and lower.   To address the marketability of the crop we must identify the average vom of the entire crop.  What we will find is the majority of the crop will fall into the center of a typical bell shape curve chart, with extreme outliers to the low and high end of the curve.  Where this average is today is uncertain however it does appear the average quality is merchandisable to many, but not all, of the end users of the province.  Will the high outliers be released by crop insurance and those fields destroyed?  Will producers destroy fields that are in a claim position or will they harvest with hopes of the crop being marketed at some time into the future if market conditions become more certain. 

There is frustration in what appears to be a lack of consistency in the results of tested loads.  Everyone has heard of a truck that has been tested at one location, only to be tested at another location, with both locations having a vastly different result.  The differences can be so severe that on the one hand the load could be deemed as reject able due to extreme test levels, to the next location that tests it and gets a result showing low vom and good quality corn.  This lack of consistency obviously exasperates a producer and causes them to wonder why there is such variability.  It is important to understand in this situation that the vom test, if done correctly (most people using vom test kits are well trained) is very accurate.  So why the variability?  The test is representative of the sample taken, however the sample may not be representative of the load.  Therefore if you take two different samples, understand that you can get two different results, if the samples are not representative of the load.  We see variability throughout fields with Giberella ear rot.  This field variability inevitably ends up in truck variability which unavoidably ends up in test variability. 

There are some livestock species that are more sensitive to vomitoxin than are others.  We do know however that there are no livestock species that are widely farmed in our region that are unaffected by the toxin.  Therefore there is some usage of high vom corn and corn by products into cattle feed yards, but the usage of the extremely high vom is not unlimited.  Each feed yard needs to determine maximum vom levels in feed with their nutritionist to ensure animal health.  Because there is not limited usage of high vom corn and corn by products with toxins we see industrial users being cautious with inbound corn requirements.   Recently there have been ideas brought forth that the ethanol industry should utilize only high vom corn and this will not affect their process in the production of ethanol.  It is reported that one facility is going to try to do a test run of high vom, in order to discover if this is true.  The long term logistics and economics of this do not seem to be easily achievable.  As a result the DDGs will be extremely high in vomitoxin and will likely not be saleable.  From a producer standpoint, it is important for growers to understand that an ethanol plants profitability is less than their DDGs revenues.  Simply put for the plant to continue long term it needs to produce a saleable DDG co-product.