December 5, 2018

Are there too many barriers for grain traceability to get some traction?

By Barney Bernstein, Senior Associate

Tracing food from farm to table is a hot topic—the fact that consumers want to know everything possible about what they’re feeding their families keeps it on the front burner, but situations like the romaine lettuce crisis really turn up the heat.

We may be able to trace the apples in your fruit basket back to the tree they grew on, but we sure can’t reach that level of detail in pinpointing where the corn in your tortilla chips came from. When it comes to grain, though, is knowing the complete story that big of a deal?

Maybe it’s less critical—after all, we don’t see the same food contamination issues with grains as we do with produce. But with demand for this level of transparency growing and digital technologies making it less of a far-fetched idea, maybe such changes are more within reach than we think.

Make no mistake, achieving the same level of traceability with grain that exists with produce will be difficult, if not impossible, in our current commodity grain system. Before traceability can improve for row crops, we have huge mountains to conquer—not the least of which are storage issues unique to the grain industry and growers’ hesitancy to intensify their use of digital technology and then to share that data transparently down the value chain.

Gaps in the Grain Information Chain

Speaking of mountains to conquer, one of the biggest obstacles relates to the mountains of harvested grain dropped on the ground for storage when bins and elevators reach capacity. When we’re talking 1- to 2-million bushels of corn on a ground storage site, once those loads are piled onto each other we lose the ability to track from grower to end user.

Whether it’s on the ground or in the grain elevator, the co-mingling of “interchangeable” crops creates a significant gap in the chain when it comes to transparency. At the farm level, tractors collect yield and GPS information, so we know what bushel came from which part of the field. Sensors then track it from the grain cart to a tractor-trailer that takes it to storage. Once you throw 1,000 bushels into a 100,000-bushel storage bin and mix it with 100 other truckloads of grain, that’s when the trail goes cold. The way grain flows in and out of storage makes it impossible to isolate a truckload.

This is where capital becomes the most limiting factor. Maybe grain bin design could change that, or on-farm storage. But who would pay for it?

Lesser Sense of Urgency

The technology for improved digitization at the farm level is there and certainly would improve traceability if universally adopted; but getting growers on board with investing the dollars and time required is something we have yet to accomplish across all crop segments. It’s hard to convince growers to take on the burden of additional record-keeping when they already keep extensive records. And so far, no one is really asking for it.

As a result, growers aren’t necessarily feeling a great sense of urgency to invest in more advanced systems and tools to improve transparency. Is it even that important? Do we need to make the investments to improve this system? Is having this level of detail necessary for grain when our safety regulations are so stringent already?

Well of course the world would love that minutia of detail, and it makes economic sense in the event of a food contamination crisis where having more detail lessens the financial impact. In food contamination crises with produce, for example, there is great value in being able to trace the source of the problem to a specific field rather than condemn an entire region. And, in the meat industry, having the ability to trace products from the grocery shelf all the way back to the sow, cow, or hatchery would be immensely valuable to meat producers.

Rarely, however, do we have food safety issues with grain. Quality checks along the value chain thwart most such issues from coming to a head. Plus, 60% of grain produced goes into animal feed. And if you have a meat contamination issue, it’s not because of the grain fed to the pig; it’s more likely to originate at the packing plant.

Buyers of grain for feed care less about where the grain was grown and more about it being of high quality, free from contaminants and originated at a reasonable price. Grain goes through testing when the farmer drops it off, then is probed again on the train and again when dropped off at the buyer.

Better Tracing with Blockchain?

Traceability, to a degree, brings in a blockchain discussion—blockchain can help increase transparency; but for grain the primary benefit is transactional efficiency, whereas fruits, produce and vegetables, and arguably meat products, see improved transparency with more information tagged onto transactions from one end of the chain to the other.

Better tracing would make threats less ambiguous if a widespread problem did occur … the closer you get to the root problem, the less of a guessing game it is, and the economic impact is reduced. If there were no gaps in transparency along the chain, it could mean the difference between putting a complete halt to the romaine lettuce market vs. shutting down one small region in a single state.

There’s more to discuss on this topic of traceability, and in the next issue we’ll delve deeper into the role of blockchain in food traceability—a topic that’s rapidly growing in prominence with produce but moving more slowly with grain. Some industry heavyweights have announced significant investments in the technology, so stay tuned for our review on what might be on the horizon for blockchain.

If you want to discuss traceability issues in the ag food industry and how they impact your business, contact Barney Bernstein at bbernstein@entira.net or 919.830.6527.