August 31, 2012

 

 

A naturally occurring toxin in corn that could present another challenge to farmers already hit by the worst drought in 56 years has made the grain industry, makers of milk products and crop insurers to be on high alert.

 

Trace amounts of aflatoxin have shown up in some of the corn harvested in the US, with top US dairy company Dean Foods in talks with state officials in Indiana and Iowa about testing milk for the carcinogenic by-product of mould.

 

Any major outbreak has the potential to snarl the grain handling system in the Corn Belt and trigger a scramble -- and price spike -- for untainted corn which will already be in short supply this year due to the drought.

 

"We've actually seen it this bad before, but this year it's just a lot more widespread," said Jeffrey Richter, manager of a Missouri Department of Agriculture grain inspection facility in St. Joseph, Missouri. His office was testing corn samples from Kansas, Nebraska and Iowa and finding some level of aflatoxin in most of them. Richter said most of his site's samples were sent by crop insurance adjusters who suspect a problem with the grain.

 

Aflatoxin is the by-product of a powdery, olive-green mould that has emerged in corn fields from Kansas through Indiana and is harmful or even fatal to livestock. The presence of the mould does not necessarily lead to aflatoxin.

 

With the corn harvest only 6% complete in the US, the world's largest corn producer and exporter, it's too soon to know whether aflatoxin will be a significant problem. Strict regulations and testing of finished foods and feeds should prevent a major health scare, and human exposure to high levels of aflatoxin is rare

 

Aflatoxin contamination prompted a series of pet food and livestock food recalls last December, including products produced at Cargill's Lecompte, Louisiana, plant and Procter & Gamble Co plant in Henderson, North Carolina. Aflatoxin, caused by the Aspergillus fungus, develops on crops stressed by severe heat and drought and is most commonly found in the southern US. Typically, the heart of the Corn Belt, which tends to benefit from cooler summers and ample rains, is spared from aflatoxin. But given the worst Midwest drought in 56 years, this year is different.

 

The USDA's Risk Management Agency, which oversees crop insurance programmes, warns that insured farmers who suspect their fields might have aflatoxin must contact their insurance agents before they harvest the grain in order to receive compensation. Testing grain is a challenge because the mould can appear in highly variable levels within a field.

 

Under guidelines from the US Food and Drug Administration (FDA), certain types of animal feed can contain an aflatoxin concentration of up to 300 parts per billion (ppb). Human foods must contain less than 20 ppb, while the threshold for milk is even lower, at 0.5 ppb.

 

Grain elevators typically discount loads of corn containing more than 20 ppb -- the equivalent of only seven kernels in a railcar full of grain -- while loads containing higher levels risk being rejected. A few grain buyers have begun posting aflatoxin discount schedules.

 

Grain handlers typically respond to corn quality issues by slowly blending off low-grade corn with other supplies, as they did with aflatoxin outbreaks that followed the drought of 1988, and a smaller outbreak in 2005. The FDA generally forbids such blending but has relaxed its policy during years of widespread aflatoxin problems, upon the request of state officials.

 

However, blending requires access to supplies of clean corn -- and the latest aflatoxin threat comes at a time when US corn inventories from the 2011 harvest are almost exhausted, and drought has decimated the 2012 crop. So a major aflatoxin outbreak could cause headaches for corn suppliers. Aflatoxin can spread once the grain is stored.