Most Iowa Grain Processed Before Leaving State
November 11th, 2001
AMES, Iowa — Value was added to more than 60 percent of the grain sold by Iowa farmers in the 1999-2000 marketing year, according to an Iowa State University survey.
Iowa farmers and country elevators reported that about 60 percent of corn and 61 percent of the soybeans had value added to them in Iowa. Value-added activities were defined as grain fed to livestock or processed into more valuable products, such as corn starch, ethanol, high fructose corn syrup, soybean oil and soybean meal. The figures included a small portion of Iowa grain that also had value added through the segregated growing, handling and shipping of specialized grain varieties, such as soybeans for tofu and other human foods.
The survey was designed to find where and how Iowa farmers and country elevators shipped corn and soybeans during the grain marketing year extending from Sept. 1, 1999 to Aug. 31, 2000. The project was funded by the Agribusiness Association of Iowa, Iowa Farm Bureau Federation, Iowa Soybean Promotion Board, Iowa Department of Economic Development and Iowa Department of Transportation.
The survey also found that more Iowa producers are taking their crops to market in semi-trailer trucks. The semi trucks are owned by farmers, elevators or for-hire haulers. Semis hauled 48 percent of the corn and 45 percent of the soybeans in 1999-2000, farmers reported. That is up from 37 and 31 percent, respectively, reported in a 1994-95 survey.
"By the year 2005, up to 60 percent of Iowa corn and soybeans is likely to move from farms in semis," said C. Phillip Baumel, Iowa State economist and an author of the survey's analysis. "This shift to these large trucks from wagons and single-axle trucks means that grain farmers have more flexibility to reach alternative markets and to operate combines efficiently."
Semis haul grain longer distances than wagons and small trucks. Some implications of the shift include road maintenance issues arising from grain traffic on county and state highways leading to country elevators, grain processors and feeders. The semi trend also would affect the location of grain transportation and handling facilities over the next decade.
Baumel said the study found that country elevators are still the dominant market for producer-delivered grain, but increasing quantities are being delivered directly from farmers to processors.
He added that country elevators will continue to serve a major function of shipping corn and soybeans to distant markets and also will have major opportunities in segregating and shipping identity-preserved grains. Survey data on feed-truck ownership by country elevators suggest a major restructuring of the feed industry in Iowa.
Nearly 700 Iowa grain producers and more than 100 elevators responded to the survey.
In addition to Baumel, the survey's report was prepared by Harold Hommes, chief of the marketing bureau at the Iowa Deparment of Agriculture and Land Stewardship; Jean-Philippe Gervais, assistant professor at Quebec's University of Lavel; and Marty McVey chief economist at AGRI Industries. A copy of the report is available by sending a $10 check made out to Iowa State University to: Phillip Baumel, 460B Heady Hall, Ames, Iowa 50011-1070.
C. Phillip Baumel, Economics, (515) 294-6263
Ed Adcock, Communications Service, (515) 294-2314