From drought, to excessive rainfall—Mother Nature took her toll this season on crop quality.
When farmers roll up to the elevator it’s important to remember that if grain quality was impacted they might face discounts that bring down their bottom line. While each elevator’s discount schedule might vary, what causes discounts is fairly consistent.
According to Michigan State University Extension, there are six major considerations that lead to discounts at most elevators:
- Test weight: the density of each bushel. Standard test weight is 60 lb. per bu. (soybeans) and elevators often discount when loads fall below 54 lb. per bu.
- Moisture: because farmers are paid on gross weight elevators have to account for shrink when loads are above 13% moisture. Many buyers use a shrink factor of .7% or .8% for each half percent of moisture above 13% to convert gross weight to dry weight. In Michigan drying charges are commonly $0.025 per bu. for each half point of moisture.
- Foreign material: buyers reduce gross weight of the load based on actual foreign materials found in their sample. Foreign material discounts range from $0.01 to $0.05 per bu. for each 1% found above the buyer’s threshold.
- Damage (total): includes heat damage, frost damage, immature seed, mold, insect and sprout damage. Farmers are commonly allowed up to 2% damage for soybeans before discounts apply at $0.02 to $0.05 per bu. for each 1% over.
- Heat damage: black or dark browns, that occur when wet soybeans are dried at too high of a temperature or when soybeans are put in storage at too high of moisture levels. Heat damage is included in the damage (total) category.
- Splits: soybeans are considered splits when at least one-quarter of the seed is missing. Generally speaking, buyers allow 20% splits before discounting—but they have discretion to start discounting at a lower percent. Discounts range from $0.01 to $0.05 per bu. for each 5% increase in split beans.