Consumers demanding identity preservation in U.S. grain markets.Modified-starch corn is one of the fiber-rich grains developed in response to consumer demand for low-carbohydrate food. This development and others like it have led to a growing number of specialty crops requiring either segregation or full-scale identity preservation (IP) to differentiate them from conventional commodities, These IP, or differentiated, crops include products with specific traits, like waxy corn Waxy corn (maize) was found in China in 1909. As this plant showed many peculiar traits, the American breeders long used it as a genetic marker to tag the existence of hidden genes in other maize breeding programs. , nongenetically engineered, organic, or pharmaceutical crops. Many other factors have also favored the expansion of differentiated grains, Biotechnology has led to innovations such as low-phytate corn, which is high in digestible digestible having the quality of being able to be digested. digestible energy the proportion of the potential energy in a feed which is in fact digested. digestible protein see digestible protein. phosphorus phosphorus (fŏs`fərəs) [Gr.,=light-bearing], nonmetallic chemical element; symbol P; at. no. 15; at. wt. 30.97376; m.p. 44.1°C;; b.p. about 280°C;; sp. gr. 1.82 at 20°C;; valence −3, +3, or +5. . When fed to hogs, it contributes to lower phosphorous phos·pho·rous adj. Of, relating to, or containing phosphorus, especially with a valence of 3 or a valence lower than that of a comparable phosphoric compound. pollution from manure. Advances in industrial processing and enzymes also play a role, The corn wet-milling industry is increasingly able to process starches starch n. 1. A naturally abundant nutrient carbohydrate, (C6H10O5)n, found chiefly in the seeds, fruits, tubers, roots, and stem pith of plants, notably in corn, potatoes, wheat, and rice, and tailored to specific industrial and food uses, creating demand for specialty crops, such as waxy waxy (wak´se) 1. composed of or covered by wax. 2. resembling wax, especially denoting some combination of pliability, paleness, and smoothness and luster. and high-amylose corn. Cereal makers contract for variety-specific wheat and oats oats, cereal plants of the genus Avena of the family Gramineae (grass family). Most species are annuals of moist temperate regions. The early history of oats is obscure, but domestication is considered to be recent compared to that of the other with exacting milling and baking attributes, The current expansion of ethanol production is spurring research into new energy crops capable of more efficient cellulose-to-ethanol conversion, Meeting these demands requires producers not only to change production practices but also to work with buyers, certifiers, and others to ensure identity preservation. [ILLUSTRATION OMITTED] Differentiated crops often have higher costs than generic crops to meet segregation and transactions costs Transactions costs The time, effort, and money necessary, including such things as commission fees and the cost of physically moving the asset from seller to buyer. Transcations costs should also include the bid/ask spread as well as price impact costs (for example a large sell for contract compliance, such as testing and/or third-party certification. The cost of segregating specialty crops from conventional commodities can be influenced by the volume shipped, shipping method, tolerance levels for foreign materials, testing, and documentation requirements. IP-specific risks also contribute to higher costs. These risks vary depending on the purity level required, and include price discounts or rejections depending on the type and level of foreign material in the crop. Nongenetically engineered crops (including organic) can be subjected to testing and run the risk of being rejected if they were accidentally contaminated contaminated, v 1. made radioactive by the addition of small quantities of radioactive material. 2. made contaminated by adding infective or radiographic materials. 3. an infective surface or object. . Pharmaceutical crops are not licensed for food or feed use, so isolating them from the food supply can make handling them far more costly. Differentiated grains also command price premiums that are affected by such factors as the proximity of suppliers to buyers and the cost and availability of substitutes. Price premiums also rise or fall depending on supply conditions for the generic commodity. The trait-specific quality attributes of IP grains require more coordination between growers and handlers/processors and more sharing of information, often through contracts. Purchasers often demand assurance of product quality and authentication (1) Verifying the integrity of a transmitted message. See message integrity, e-mail authentication and MAC. (2) Verifying the identity of a user logging into a network. of process/product claims. Suppliers of farm products (for example, seeds) must demonstrate that product attributes are verifiable and show supporting documentation, Thus, a key to IP grain markets is the growing role of third-party services for auditing, verification, and quality assurance. Aziz Elbehri, aelbehri@ers.usda.gov This finding is drawn from ... The Changing Face of the U.S. Grain System: Differentiation and Identity Preservation Trends, by Aziz Elbehri, ERR-35, USDA, Economic Research Service, February 2007, available at: www.ers.usda.gov/publications/err35/ |
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