Revealing the benefits of I.P.

by Emily Wilson
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Consistency, quality and the ability to capture the inherent value of a crop are typical reasons cited for implementing identity preservation (IP) programs. In order to best understand what is being done in IP, one must first be able to differentiate the IP process from two related, but very distinct, processes: segregation and genetic modification.

Segregation refers to a system in which grains, both genetically altered and non-genetically altered, are kept separate to avoid comingling during harvesting, loading and unloading, storing and transporting.

Genetic modification involves splicing a single gene from one organism to another. Companies such as Monsanto Co. and Aventis CropScience, through advancements in technology, have created grain varieties that are less susceptible to disease and pesticide, while at the same time providing good yields.

More recently, the U.S. grain industry has stepped up efforts in IP, a trace-back procedure that begins with an agreement between a farmer and a contracting agent under which a contract is reached that specifies how much land will be planted, the seeding rate and sometimes even the crop history of that acreage.

Then, throughout the growing season, the farmer relays the progress of the crop, any problems that might have arisen and the estimate of the yield. Once harvest begins, the farmer takes precautions to prevent any intermingling of the identity-preserved crop with regular crop. This includes extensive cleaning of trucks, bins, etc.

From a transportation standpoint, designated cars and trucks are analyzed at all transfer points to ensure that the identity-preserved product has not come in contact with non-identity-preserved product. IP typically requires containerized shipping be maintained at all times.

DYNAMIC CHANGES. Last fall, Illinois Cereal Mills, a subsidiary of Cargill, Inc., launched an IP corn brand that combines, among other things, a rigorous selection of corn hybrids, contract-grown corn, close relationships with seed suppliers and growers, ownership of elevators that handle only IP grain, extensive testing of product and "rigorous document trailing."

InnovaSure, Illinois Cereal’s brand name for both the IP corn products and the system for producing them, comprises a full line of identity-preserved whole corn, yellow goods and masa products grown to customer specifications.

According to Rex Winter, president of Illinois Cereal, based in Paris, Illinois, U.S., "InnovaSure did not happen overnight. Illinois Cereal has a long history in IP." In fact, leading up to last fall’s launch of InnovaSure were several years of development in Illinois Cereal’s corn program and IP.

In the early 1980s, Illinois Cereal began working with premier seed companies on hybrid genetics and development of consistent hard starch varieties for food use. In the 1990s, the company started testing certain corn hybrid characteristics with specific customers. By the mid-1990s, Illinois Cereal was actually contract growing identity-preserved corn.

"The InnovaSure brand identity is what is new," Winter said.

At the company’s web site,, Illinois Cereal points to the "dynamic changes" that are redefining the food industry and consumers’ increased awareness of what’s inside of foods as key reasons behind the introduction of InnovaSure.

The company’s efforts to market InnovaSure products include a detailed web site as well as a CD-ROM that interested parties may receive free of charge.

A key benefit of the InnovaSure system is eliminating the guess work involved in determining what attributes a customer might get from any given grain. The goal is to deliver consistent product that will be of superior value to customers and consumers.

Winter stated that it is "extremely important" to evaluate the hybrids in order to recognize attributes and make recommendations to customers. Although Illinois Cereal samples more than 1,000 hybrid varieties each year, only a handful are selected into the InnovaSure list of approved hybrids. For the 2001-02 crop year, 11 hybrids are on this list.

"The InnovaSure process is all about understanding attributes that customers are looking for," Winter explained. "One attribute is in understanding what is in those products. Another issue might involve the characteristics that make up the product.

"InnovaSure products allow us to deliver and respond to defined customer traits. They allow us to deliver consistency in starch make-up, as well as ensure food safety around mycotoxins in products. All of our products have a benefit, depending on the specific market you are servicing."

The InnovaSure system also relies on contract-grown corn from its own network of professional growers. InnovaSure products, which are made exclusively from the list of approved hybrids, are tracked according to strict IP protocols for growing and handling.

According to Winter, education is key to ensuring that information is passed correctly and efficiently from the grower to the customer. As part of the InnovaSure system, meetings are organized where growers and handlers discuss the proper ways to produce and distribute grains according to InnovaSure standards.

Prior to loading of the corn, cars and trailers are cleaned to eliminate any residue. As further assurance, the product is again tested after loading into the trailer to ensure that no co-mingling of grains has occurred.

Documentation also takes on a greater role in the InnovaSure system. Customers must be assured that the product they are receiving has not come into contact with contaminated grain at any point of the process. This system of "rigorous document trailing," as Winter explained, provides this assurance to customers.

"Our process is not based on cost; it is built around value," Winter said. "We are offering incentives for growers to participate. As a result, we pay a premium for InnovaSure corn. We do that so we can deliver unique product to our customers. It is a value-delivery process, not a cost-reduction process."

STRIVING FOR 100%. In an effort to strengthen its position and provide more consistent products, General Mills, Inc., Minneapolis, Minnesota, U.S., the No. 2 cereal manufacturer in the U.S. in terms of dollar sales, has engaged in a program that it hopes will bring 100% IP to its products by 2007.

According to Ronald D. Olson, vice-president, Grain Operations, General Mills, consistency and quality are the two greatest benefits of an IP program. The extent of the benefits would not have been possible in the past, but the incredible growth of technology has created opportunities unthinkable just five years ago, he said.

"Technology is allowing us to understand grains more," Olson said. "We now are able to connect grain to final food products. In the past, we would work down to the product level — it wasn’t done on the grain level. So if you can get rid of differing varieties in grains, then you can get better quality."

Another reason IP programs have taken off is the evolution of breeding, he said. Breeding, which is the improvement of a plant through selection, is better understood today than it was 20 years ago, particularly when considering breeding for output traits, Olson said.

As part of the wheat breeding process, researchers are able to create a new variety that combines the superior attributes of two different varieties. In the case of an IP program, this may include combining a wheat variety with superior yield and stress tolerance with another variety that has better bread-making quality.

As a result, the evolution of breeding has allowed end users to identity-preserve a product with the characteristics it desires.

"Once you get to the output trait side, you wake up the food side," Olson explained. "The tools to be able to use it did not exist prior to several years ago." As a result, he said, people are making the connection between grain and food.

For General Mills, the goal is to economically deliver to consumers a consistent and healthful product, Olson said. By shifting to identity-preserved ingredients, companies such as General Mills have been able to procure grain with more consistent quality, which has led to better operations at cereal plants, he said. He added that by being more specific in varieties, cereal plants have been able to improve output by up to 10% or 15%.

General Mills for several years has segregated kernels by size and has applied IP techniques to its flour milling operations. According to Olson, this strategy has allowed the company to raise extraction rates at some flour mills by up to 8 percentage points.

Olson noted that General Mills now makes it a practice to inform farmers about exactly what type of wheat needs to be grown in order for it to be used in the company’s cereals, as well as what chemicals can be used and what method of shipping is acceptable.

The cereal manufacturer, which has 100 million bus at its country elevators, uses identity-preserved grains in more than 35% of its products. Olson indicated that while 100% IP may be a lofty goal, it is a benchmark the company would like to achieve.

"We will get a high percentage of IP at General Mills within seven years," Olson said. "By setting the 100% mark, we were laying out parameters and then trying to see if it works. One hundred per cent is probably impossible because grain has issues beyond our control. I don’t know if you can get to 100%. Basically, you need to raise the quality of the whole crop — that is where you can get some value."

IP TAKES HOLD. At its Toledo, Ohio, flour mill, the largest mill in the United States, Nabisco Brands, Inc., has been involved in identity preserved programs since 1999. According to Derrick Shook, manager of the IP program at Nabisco, the move toward identity-preserved wheat was initiated in response to wheat consistency problems that emerged suddenly at the mill in the summer of 1999 during the wheat quality control process.

"Some of our soft red winter wheat intermittently resembled what could be expected from a blend with a higher percentage of hard red winter, i.e. the gluten strength was above what it should have been," Shook explained. "We use a small percentage of hard red winter, but that wasn’t the explanation for what we were seeing. With consistency being very important to our high-speed bakeries, the wide variations we saw in the receipts could produce flour that was not within our specifications and could cause significant problems for our bakeries."

The company discovered that a specific soft red variety in the blend was creating the stronger gluten phenomenon and needed to be segregated. Rather than excluding the variety (Pioneer 25R26) from the blend, Nabisco has used it to replace a percentage of the hard winter that it uses.

"After extensive analysis of our inbound wheat receipts we found that 25R26, which is grown in our drawing area, provided the desired gluten strength of hard red wheat without the negative impact of starch damage from hard red wheat," Shook explained. "Unsegregated, this wheat was causing problems. If segregated, we could control the consistency of our flour and replace some or all of the hard red winter in the blend."

Nabisco researched the possibility of implementing an IP program for the wheat. The flour mill, in coordination with supplying elevators, Pioneer Hi-Bred International, and Ohio Wheat Growers Association, followed up by facilitating an IP program for the 2000-01 crop year.

As part of the program, Nabisco purchases directly from participating elevator suppliers who then contract with growers. In 2000-01, Nabisco paid a 20c a bu premium directly to the elevators, which in turn compensated the producers.

According to Shook, Nabisco again worked closely with Pioneer on the program for the 2001-02 crop. The only major change, he said, was the requirement that only bushels from certified seed be accepted. This resulted in an additional 5c a bu being added to the premium to offset some of the higher production cost associated with certified seed.

While Nabisco will save money through this program by purchasing less hard red winter (which must be shipped a considerable distance), Shook emphasized that the IP effort was being driven by other considerations.

"Right now, pinpointing the cost savings from this program is difficult," he explained. "First of all, we don’t know precisely what ratio the hard winter will be replaced by 25R26. In addition, freight rates change and the relative price of hard winter and soft red also fluctuate. And we are paying the premium for the 25R26. The important point is that the decision to pursue this program is driven principally by the quality benefits we will gain."

With assistance from the operations, commodities and quality control divisions at the Nabisco Toledo mill, Nabisco has 30 elevators participating in its IP program, with the expectation that the total will grow to approximately 45 in the next year. Shook said that Nabisco has made it a priority to try and make the program as simple as possible and make the transition more fluid for elevators to fully utilize such a process.

"Some elevators are really in tune to identity-preserved grains and the goals of an IP program," he said. "This program is oriented to elevators and is fairly easy to manage."

The Nabisco IP program involved 1.5 million bus in 2000-01, a figure that will double in 2001-02. While pleased by the progress, Shook stressed that the company said the program is still viewed as being in a preliminary phase, with a considerable focus on exploration, learning and adjustment. He noted that the company procurement of generic soft red wheat and Pioneer 25R26 was limited to specific geographic regions.

Cooperatively with seed wheat breeders and the U.S.D.A. Soft Wheat Quality Laboratory, Nabisco continues to explore to find higher gluten soft red wheat varieties that are agrinomically viable for these regions. At the same time, Nabisco is committed to the IP concept and is looking for ways to expand its program, Shook said.

EVERY FIELD ‘UNIQUE.’ "Every field of crop on every farm in every county in every state is unique." This statement, expressed by Randy Englund of the South Dakota Wheat Commission at the 2001 Wheat Quality Council meeting, is the premise behind Pierre, South Dakota-based Americas Quality Crop Network, or AmeriCrop, as it is commonly called.

AmeriCrop is a farmer controlled non-profit organization that was founded by South Dakota wheat producers with the cooperation and support of South Dakota Wheat Inc., which is a consortium of more than 500 growers, and a financial grant commitment from the South Dakota Wheat Commission through wheat check-off dollars.

The organization, which was created to enable producers, consumers, handlers and processors to benefit from the vast array of crop traits, maintains a web site database of crop characteristics where interested buyers can scan the database with their own quality specifications. Once a buyer has located the desired crop characteristics, he or she can send an e-mail to one or many producers, processors, handlers or other intermediaries to obtain an identity-preserved crop.

"We assume that by having everybody able to view the crops, they will individually find their best value opportunity and will match themselves to capture that value and be more profitable," said Bill Ferguson, president of AmeriCrop and a member of the South Dakota Wheat Commission.

AmeriCrop has no beneficial interest in any of the resulting transactions and serves only as a communication facilitator.

According to Ferguson, interest in the AmeriCrop program has grown in recent months. The demonstration phase started with 20 South Dakota farmers testing their wheat, Ferguson said. This wheat, through the Internet, was made available to individuals worldwide who may view the test results and buy based on value. Ferguson explained that Internet communication is important because it allows producers, handlers, etc. to communicate on a global basis at zero cost.

Even as interest has grown, though, he indicated that AmeriCrop has had difficulty overcoming obstacles presented by companies operating their own IP efforts.

While most people have responded favorably to the benefits provided by an Internet-based IP tool, Ferguson indicated that some see AmeriCrop as a threat to their own private IP programs, while others have needed some hand-holding to better understand the expansive AmeriCrop database.

"The reaction that surprised me was that ‘information that you are making available is too valuable to make free of charge,’" Ferguson said. "There are some companies or groups that are trying to gather information on their own and take to select customers. So to an extent, they have invested in information. AmeriCrop is not investing in information. Individual farmers and participants are investing in it.

"It really is a question of whether you want valuable crop quality information available to the world or whether you want to protect it for a select audience base. Our general philosophy is that the more people you can get to see what you’ve got, the more likely you are to get someone to put the product to its highest use."

Ferguson noted that some of the "fear" in the industry stems from the fact that people are nervous about change. "Our industry — milling and baking — has developed methods and buying strengths over the past 100 years," he said. "And when you come forward with something that they haven’t been able to do before, there is a tendency to be uncertain of it or know how to deal with it."

In an effort to build trust and provide assurance — both of which are critical aspects of a successful IP program — companies must develop a reliable system of testing each wheat shipment that travels through the IP chain, something that Ferguson said AmeriCrop has gone to great lengths to provide.

"Quality tests that are done for AmeriCrop have been duplicated by millers’ own laboratory tests," Ferguson said. "This is a crucial element in making the process work. That is one of the reasons for having a single system.

"That is, if you have these tests done at different labs you’ll get different numbers. Our philosophy is, when we designate any test, it is going to be done at one laboratory with a small number of processors doing the test."

He noted that all of AmeriCrop’s tests are conducted at CII Laboratory Services. To date, the lab tests done for the AmeriCrop program at CII have correlated well with tests undertaken by scientists at private labs, Ferguson said.

In laying out objectives for the organization, he mentioned that the organization hopes to increase the amount of wheat available through AmeriCrop’s database. While the organization currently has enough quantity for pilot production, the goal is to have commercial quantities for the coming harvest.

"Most every buyer I’ve talked to has identified within a few minutes an opportunity within the AmeriCrop system that is of benefit to their own value line," he said. "At the same time, they tell me that unless there is enough grain to ensure that it will always be available, they can’t consider pursuing that opportunity."

Despite the challenges presented by bringing the AmeriCrop system to a global scale, Ferguson remains optimistic that growers, handlers and consumers will find the value presented in such a network. "I’m confident that we will find the companies that will see the competitive advantage," he said. "Competition will drive people to IP — to know the quality of wheat before they get it. There is no bad crop out there, just a matter of getting it out to the right person at the right time."