The Canadian Grain Commission (CGC) is ending the 1.1 per cent “rebound factor” licensed primary elevators are now allowed to use to calculate the moisture shrinkage deducted from farmers on grain the elevators have dried.
The CGC will continue to regulate how moisture shrinkage is calculated. The 1.1 per cent will be replaced with a reference to a moisture level of 0.1 per cent below the fixed minimum tough moisture level specified for that grain, according to a CGC consultation paper.
Currently elevators that dry grain cannot charge for drying to less than 1.1 per cent below the fixed minimum tough moisture level specified for that grain.
For example, with wheat with a fixed minimum tough moisture of 14.6 per cent, the lowest value an elevator can use to calculate shrinkage allowance is 13.5 per cent (14.6 per cent less 1.1 per cent).
This 1.1 per cent below the fixed minimum tough moisture level was introduced for two reasons, the CGC’s consultation document says. The first it was to compensate elevators for moisture rebound. It occurs because artificially drying grain causes the outside of the kernel to dry, leaving the centre with a higher moisture content. After a period of time, the moisture from the centre migrates outward.
It is impossible to determine the actual moisture content of grain for up to 24 hours after artificially drying it. The moisture immediately after drying will be lower than the result after rebound. Regardless, the actual moisture and weight of the kernel remain fixed during the rebound process.
The second was to ensure that elevators did not excessively charge farmer for moisture rebound and ensure that elevators did not over-dry grain to take advantage of the weight reduction from the producer and then use the extra-dry grain to naturally dry or blend a separate lot of tough grain.
Although farmers can negotiate a drying deduction of less than 1.1 per cent before their grain is dried it has become common for primary elevators to apply the 1.1 per cent factor, the CGC says.