IP grain

Ag industry finds a way to accommodate both biotech and organic crops Names in the News
In many respects, identity-preserved (IP) grain is a new concept for the grain industry. But in many other ways it isn't.

After all, growers and grain elevators already routinely preserve grain identity by storing and handling one type of grain separate from another — for example, malt quality barley in one bin and feed barley in another.

Grain buyers already "spec" certain quality parameters in their purchase contracts. And there are producers out there who have been selling specialty crops and grain with specific traits, under contract or in the open market, directly to processors and end users for decades.

So why is IP being lauded today as a new or novel trend in the grain industry? Chalk it up to a more sophisticated marketplace. Buyers, particularly in the export market, in response to their consumer base, are much more selective about the traits and characteristics they want — and don't want — in the grains they procure. And sellers — most notably producers themselves — are becoming more savvy in delivering what buyers want.

To be sure, most grain producers' involvement in the marketing of their grain ends when they take it to the local elevator, where their grain is placed in storage with other grain of the same type and quality and then transported out by the elevator to terminal markets.

But there is a growing segment of producers marketing at a different level, "IP-ing" grain directly from their farms or through their local elevators, segregating and shipping specialty grain to domestic and overseas buyers for a market premium, enabled by new tools, processes, and know-how to do so.

New companies and associations are being formed to facilitate IP grain, including the Midwest Shippers Association. Originally called Minnesota Shippers Association, the Midwest Shippers Association was created several years ago through an appropriation by the Minnesota Legislature.

Organized as a membership cooperative, the MSA promotes and facilitates direct sales of farm commodities from producers to end users, both domestic and international. Producers, grain elevators and other links in the grain industry are members.

The group's website (www.mn shippers.org) includes IP grain market information and links, a searchable database of producers and handlers of ag products and buyer profiles with a searchable database of current high-profile customers interested in purchasing identity-preserved crops and an overview of target country markets.

Managed by the Minnesota Grain and Feed Association, the MSA's services are particularly geared toward assisting the IP efforts of small and medium sized grain producers and handlers. The fact that the organization that represents Minnesota's nearly 400 grain elevators has been involved with developing the MSA should not be lost. It signals the fact that the old-school bulk grain handling mentality is evolving. And in this day and age, when major railroads are placing more emphasis on shuttle trains, the MSA represents hope for some smaller grain elevators that may develop a niche in moving IP grain.

This fall, the Midwest Shippers Association hosted a conference and trade show in the Twin Cities specifically targeted at "building relationships in the IP World." About 300 people attended from 27 states and eight countries. It was so successful that plans are already under way to hold the event again next year, August 23-24, in Bloomington.

The trade show featured about two dozen exhibitors with various products and services relating to IP grain, including companies that offer IP handling equipment as well as quality assurance and traceability services. There were two diagnostic services companies exhibiting at the trade show that offer quick tests for determining the presence of GMO and mycotoxins in grain, including DON (deoxynivalenol or vomitoxin), the by-product of Fusarium head blight or scab. Both tests use the "QuickStix" strips, similar to pregnancy tests.

The MSA's IP conference culminated with tours to specialty grain producers, handlers and processors in outstate Minnesota and North Dakota, particularly valuable for the buyers and end users who participated, including representatives from Japan and Taiwan.

Currently, most of the IP grain opportunities exist with corn and soybeans with various traits, as well as organic and non-GMO. In fact, it is organic and non-GMO markets that are providing the most fuel for IP grain handling. Whether you grow and handle biotech crops or organic crops, the evolution of IP grain handling is making it possible for the coexistence of market opportunities for both.

This point is validated by a comprehensive study in May 2004 by British ag economists Graham Brookes and Peter Barfoot, which pointed out that biotech and organic crops can indeed coexist without significant economic or commercial problems. "The market has effectively facilitated this without government intervention since GM arable crops were first introduced in 1995," the British ag economists say.

What's more, they point out that states with the most acreage devoted to organic crops were also often the states with above average adoption of biotech crops. The leading organic-growing states of Iowa and Minnesota, for example, also had above average biotech corn plantings compared to the U.S. average.

Coexistence studies by the two economists in Spain and the United Kingdom found similar results. Brookes and Barfoot point out that biotech management practices (including planting part of a field to non-biotech varieties to help prevent pest resistance and buffer zones to reduce pollen flow) — as well as following IP practices — are keys to coexistence.

The signs are pointing to IP grain evolving from trendy buzzword to a way of life in the grain industry.