Friday, September 02, 2011
Beware Of Aflatoxin Potential In Droughty Corn
What is the chance that you have some moldy corn, caused by dry and hot weather this year? There may be an increasing concern about the potential level of Aspergillus mold, which can cause aflatoxin. You might have been concerned with low yields, but the presence of aflatoxin is a whole new issue.
The presence of aflatoxin can create significant revenue loss from infected corn, including discounts from insurance indemnity payments. Iowa State University grain quality specialist Charles Hurburgh and plant pathologist Alison Robertson detail the potential for corn ear rots in fields that were hurt by hot dry weather, since that is a pre-cursor of aspergillus. It will create a powdery mold that is an olive green that develops on damaged kernels above 80º F and 85% relative humidity.
If you have aspergillus, it does not mean you also have aflatoxin, but it should be a concern about the potential for developing it prior to delivery of the grain. If you are unsure about its presence, check your field prior to harvesting and alert your crop insurance agent if there are symptoms of aflatoxin. Hurburgh and Robertson say, “Aflatoxins are produced under certain conditions, and are most often a problem when night temperatures remain above 70º F. The U.S. Food and Drug Administration regulates aflatoxin levels in food and livestock feed. An “action level” of 20 parts per billion (ppb) for aflatoxin in corn has been established for interstate commerce.
Aflatoxin impacts the liver of animals that may consume corn that may be contaminated by the fungus, if the mycotoxin is present. Cornell University reports, “While the young of a species are most susceptible, all ages are affected but in different degrees for different species.”
If you have an aflatoxin loss, it is covered by various crop insurance policies, not because of a yield loss, but a quality loss. Subsequently, your agent will arrange for it to be tested before it is stored, because once it is stored, it cannot be covered by crop insurance indemnities. The testing fee will be paid by the producer, and will be conducted by an independent testing laboratory.
University of Illinois ag economist and farm management specialist Gary Schnitkey says any discount is based on the use of a multiplier. “For grain having aflatoxin that is delivered and sold to a commercial source, the discount factor will be based on the reduction-in-value. The reduction-in-value equals the sales value of aflatoxin-free grain minus the value of grain with aflatoxin. For example, take a $6.00 market price for aflatoxin-free grain and a $5.40 price for grain with aflatoxin. The reduction-in-value is $.60 ($6.00 - $5.40).
The discount factor in this case equals .10 ($.60 reduction in value / $6.00 market price). The discount factor is determined by subtracting .1 discount factor and a 170 bushel yield. In this case, the yield to count in guarantee comparisons is 153 bushels (170 yield x (1 - .1 discount factor)). A discount factor of .2 would be .80 multiplied by a 140 bushel yield, or a 112 bushel yield to count.
Discount factors are determined by the level of aflatoxin contamination in the grain on the basis of parts per billion. The action level begins at 20 parts per billion, and ranges to 300 parts per billion. Schnitkey says, “Claims with aflatoxin levels above 300 ppb will not be completed until the corn is sold, fed, used, or destroyed.”
Summary:
Aflatoxin could be a grain contaminant this fall, resulting from moldy corn that was impacted by the hot and dry weather. Because of its toxicity to livestock, the level of contamination reduces the value of the grain. Indemnity payments can be obtained if the grain was covered by crop insurance, but the level of the payment will be reduced with higher levels of contamination.
Posted by Stu Ellis on 09/02 at 12:00 AM | Permalink