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Importantly, those managing grain facilities understand there are few guarantees in 

 the marketplace. For example, several years ago, some Texas elevators received com from 

 farmer-customers before they realized aflatoxin contaminated many lots, making the grain 

 unmarketable. There also have been periods when elevators storing low-test-weight wheat 

 had no commercial buyers for extended periods of time. 



Our members report that the magnitude of storage and market risks associated with 

 the 1993 wheat crop was particularly acute. Early in the wheat harvest, elevator managers 

 confronted considerable marketplace risks associated with the taking delivery of weather- 

 damaged wheat in the absence of reliable information on such factors as: 1) the extent to 

 which the crop contained vomitoxin; 2) how extensive the damage levels were likely to be; 

 3) the low quantities of high-quality stocks; 4) concern over market demand for weather- 

 damaged wheat; 5) the uncertainty surrounding potential changes by FDA to its vomitoxin 

 regulatory policy; 6) questions concerning the accuracy and repeatability of inspection tests 

 for vomitoxin; and 7) the resultant price support policy that USDA's Agricultural 

 Stabilization and Conservation Service would adopt with respect to weather-damaged wheat. 



These uncertainties led many elevator managers to advise their fanners to hold onto 

 their 1993 crop wheat until the situation became clearer. We are fortunate that in the most 

 affected states - North Dakota, South Dakota and Minnesota - ample quantities of on-farm 

 storage space allowed many farmers to exercise this option. 



But some farmers, either by choice or out of necessity, did deliver new-crop wheat 

 for sale during this period of uncertainty and the price was discounted because of the 

 presence of scab and vomitoxin. While our organization is very careful to avoid any 

 discussion of specific pricing strategies with its members because of anti-trust concerns, we 

 did ask our members about the market situation they confronted and their strategies for 

 coping with it. 



