CHICAGO Nov 19 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
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