ADM says vomitoxin in US corn "not a big deal"

CHICAGO Thu Nov 19, 2009 5:04pm EST

CHICAGO Nov 19 (Reuters) - U.S. food processor and ethanol producer Archer Daniels Midland (ADM.N) said on Thursday it is aware of some isolated cases of vomitoxin in this year's corn crop but the toxin posed no problems at its facilities.

Vomitoxin, caused by a fungal disease that sprouts up in overly wet conditions, has been found this year in parts of the eastern U.S. Corn Belt. The toxin can sicken livestock if consumed in high concentrations.

"It showed up in only a small part of crop at this point," Dwight Grimestad, ADM's vice president of investor relations, said at the Morgan Stanley Global Consumer and Retail Conference in New York that was also webcast to reporters.

"From our perspective, this is not a big deal. We've not had any problems with our deliveries," he said.

Grimestad added that ADM is in a good position to handle any vomitoxin issues because it sources its corn from a broad geographic area.

Anecdotal accounts of the plant toxin, which rarely occurs in corn, unlike wheat, sent prices of Chicago Board of Trade soymeal and soybean futures higher last week as investors bet feed users would switch from corn to soy-based feed.

The Chicago Mercantile Exchange said it would announce this week limits on the level of vomitoxin in corn delivered to buyers of futures contracts. The exchange currently has limits on vomitoxin for wheat deliveries but not for corn.

A CME spokeswoman said the exchange was uncertain if the new limits on vomitoxin in corn would apply to deliveries against the December contract, which expires on Dec. 14.

The delivery process begins at the end of November.

The U.S. food and Drug Administration allows vomitoxin concentrations of no more than 5 parts per million in feed for swine, and 10 ppm for cattle and poultry feed.

Grain elevators across the Midwest grain belt have randomly been testing corn supplies they received from farmers for vomitoxin, but there have been no confirmed incidents of farmers being paid less for the tainted corn.

Poet LLC, the largest producer of ethanol in the United States, said the company was testing corn supplies it purchases for all toxins, including vomitoxin.

"We have seen it in limited areas near some of POET's plants in the Eastern Corn Belt," the company said in an email reply to Reuters.

"POET will continue to test and monitor local crops as the 2009 harvest moves toward completion," it said.

There has been talk that hog producers have been reluctant to feed their livestock with distillers' dried grain, a byproduct of processing corn into ethanol, due to vomitoxin. (Additional reporting by Julie Ingwersen; Editing by Christian Wiessner)

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