CHICAGO Nov 8 Tate & Lyle, a British
maker of sweeteners and starches, on Thursday said quality
problems with the U.S. corn harvest, primarily due to aflatoxin,
the byproduct of a grain fungus, were raising costs and forcing
changes to the firm's buying program.
Aflatoxin is associated with a mold that thrives in hot and
dry conditions, and it emerged in unusually high levels in the
heart of the U.S. Corn Belt this autumn after the worst drought
in half a century decimated the corn harvest.
Aflatoxin can cause liver disease and is considered
carcinogenic. Processing contaminated corn can raise the
concentration level of the toxin, threatening livestock that
feed on the by-product.
Under U.S. Food and Drug Administration guidelines, 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.
To avoid problems, corn processors and ethanol producers in
heavyweight corn states including Illinois and Indiana have been
"importing" clean grain from states like North Dakota and
Mississippi, which are typically minor players in corn
"While the presence of aflatoxin resulted in the sale of a
greater proportion of our CGM (corn gluten meal) and CGF (corn
gluten feed) in lower value markets in the first few weeks
following the harvest, we have taken steps to adjust our corn
sourcing programme," Tate & Lyle said in a semiannual earnings
"Although significant efforts are under way to mitigate the
impact of aflatoxin, and we continue to monitor the situation
closely, based on what we know today we believe it will result
in a small increase in net corn costs for the remainder of the
financial year and through to the next harvest," the company
The company posted adjusted pretax profit for its first half
of 179 million pounds ($286 million), up 2 percent. First-half
sales rose 7 percent to 1.63 billion pounds, despite uncertainty
around the wider economy and corn quality and pricing.