The Shrink Factor
When it involves our waistline, “shrink” is a good thing. When it involves our hairline, it’s not.
Then there’s the shrink associated with one’s sunflower crop — the difference between what leaves the field versus what we ultimately get paid on — foreign matter aside — at the elevator. Like a receding hairline, that shrink is seldom a pleasant reality.
Ken Hellevang (whose hairline remains quite stable) is well acquainted with the issue of shrink in sunflower. The North Dakota State University extension ag engineer also believes that a better understanding of “moisture shrink” versus shrink in general could go a long way toward alleviating some growers’ concerns over whether the discount schedule levied on their crop at the elevator is clear and fair.
“Moisture shrink,” Hellevang explains, refers to the weight loss in grain resulting from the drying of that grain down to a particular moisture content. “That is straightforward. It’s a known number,” he points out. “We have an equation that tells us if we remove ‘this much water’ from our grain — be it sunflower, wheat or corn — we’ll have a certain weight loss associated with it. That weight loss is what we call ‘moisture shrink.’ ”
The percentage reduction in weight is a constant value, based upon the final moisture content of the grain. (See Table 1 on page 16). “If we’re working with sunflower, whose market standard is 10 percent moisture, the shrink is going to be 1.111 percent for every percentage point of moisture removal,” Hellevang relates. “If we take off five percentage points of moisture, we know our shrink will be 5.555 percent.” So drying 100 pounds of sunflower at 15 percent moisture down to 10 percent would result in a cumulative moisture shrink loss of 5.56 pounds, for a net weight of 94.44 pounds.
The 94.44 pounds does not, however, take into account other factors — aside from foreign material — affecting the final crop weight upon which the producer is paid. That gap may result in misunderstandings and consternation over what’s a legitimate overall moisture discount and what is not.
“The confusion comes with the items that may be labeled as ‘shrink’ which are actually in addition to ‘moisture shrink,’ ” Hellevang advises. “One of those items would be what we more technically refer to as ‘handling loss.’ Any time grain goes through a facility, we lose a certain amount of weight due to spillage, dust blowing away — those kinds of things.”
The amount of handling loss varies from facility to facility, depending upon equipment, how many times the grain is handled, etc. While he’s not aware of any research documenting handling loss for sunflower, Hellevang says studies with corn suggest that a loss in the neighborhood of 0.25 to 0.5 percent is probably going to occur with ’flowers — “particularly if we have sunflower coming in that’s going into a dryer. It may go through three or four handling steps [before finally ending up in the bin].”
This is a form of what’s often referred to as “invisible shrink,” Hellevang says. It can’t always be accounted for; but it occurs nonetheless.
Another form of “invisible shrink” can take place while the sunflower sits in storage, either on the farm or in a commer-cial facility. “Typically, we’ll see some change in moisture content due to aeration or other reasons,” the NDSU ag engineer relates. “It may go in at 10 percent moisture and come out at 9.7 percent. So you’ll have a 0.3 percent change, which is then a loss in weight since the air is carrying out that moisture. That, too, ends up being called ‘invisible shrink.’
“So there’s the handling loss; then there’s the invisible shrink. And we need to have some way of taking into consideration that weight loss which is going to occur.
“Typically, the grain handler may include 0.5 percent or so as a ‘shrink’ that isn’t a moisture shrink occurring during drying. But just based on his history, he knows there will be fewer pounds leaving the facility than what he measures coming in.” A facility’s overall moisture discount also needs to cover the costs associated with drying and handling, Hellevang adds — employees dumping trucks, collecting samples, running the dryer; plus drying and handling equipment costs and upkeep.
On sunflower coming into an elevator at moistures above 10 percent, the facility applies its standard moisture discount schedule. That can vary, but a common discount would be 2-for-1, i.e., a two percent discount per point of moisture above 10. That 2-for-1 umbrella usually takes into account the drying charge, moisture shrink and handling loss factor. On high-moisture sunflower, the per-point discount may be even greater.
Moisture discount levels are a direct reflection of the market into which the elevator is selling, as well as of that particular elevator’s efficiency or fill status. So a handler may sometimes lower his moisture discount from a 2-for-1 down to a 1.5; or, conversely raise it to a 2.5 or 3 if he wishes to discourage the delivery of exceptionally wet ’flowers.
Hellevang advises producers to understand — in advance of harvest — what their elevator’s shrink and other discount policies are. Talk about moisture shrink as compared to invisible shrink/ handling loss and how it all figures into the general moisture discount schedule. Remember: “moisture discount” can vary from elevator to elevator and also from date to date for the same elevator, but “moisture shrink” is a constant value (Table 1).
The bottom line is this: The farmer has a right to know what he’s being charged for, while the elevator has the right to pay on the same basis on which it sells. Moisture is a market factor, and discounts are usually a reflection of the market. Sound two-way communication, preferably prior to the time of seed delivery, can go a long way toward minimizing misunderstandings and disagreements. — Don Lilleboe
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