Economic and Marketing Information
FOR INDIANA  FARMERS
Prepared by the Agricultural Staff of Purdue University, Lafayette, Indiana    
July 31, 1968
Economic Considerations in Marketing High-moisture Corn
J. William Vhrig, Agricultural Economics
Marketing field-shelled corn as cash grain presents
you with several alternatives. You can choose
between:
(1) Marketing wet corn out of the field, accepting a moisture discount, or
(2) Drying the corn for sale at harvest or at a
later date.
If corn is not sold out of the field, then you must
make other choices. Should you have your corn
dried commercially? Or should you invest in a dryer
of your own? And if you dry the corn, should you
store before selling? If you store, when should you
sell?
Marketing Strategy
The decision to market corn directly from the
field or to condition and store for sale later in the
season is affected by:
(1) The availability of storage and drying facilities already on your farm,
(2) Cost of new storage and drying equipment,
(3) Availability and cost of commercial storage
and conditioning facilities,
(4) Market discounts for excess moisture corn,
and
(5) Price of corn at harvest and the anticipated
price during the marketing season.
The most profitable choice depends upon many
things. The purpose of this article is to give you information on price discounts, shrink, storage costs,
and price increases needed to cover drying and
storage costs.
Purposes of Moisture  Discounts
Market discounts for high-moisture grain are designed to:
(1) Equalize the value of the dry matter in a
bushel of wet grain with that in a bushel of dry
grain on which the market price is based,
(2) Obtain payment for the extra costs of conditioning and handling wet grain—the costs of dry
ing, the value of the shrinkage, and the risk of high-
moisture grain going out of condition, and
(3) Discourage the marketing of more high-
moisture grain than can be safely handled by the
grain trade.
What Does a  Bushel of Corn Weigh?
Because of the extra weight in the form of water
that it contains, corn with high moisture is worth
less per pound and per bushel than No. 2 corn. A
bushel of No. 2 corn contains 15.5 percent moisture
and weighs 56 pounds. It contains 47.32 pounds of
dry matter and 8.68 pounds of water. Shelled corn
is sold at 56 pounds per bushel regardless of the
moisture content. You sell more water and less dry
matter when corn is sold at moisture contents above
the 15.5 percent standard for No. 2 corn.
When corn is purchased by an elevator, the usual
practice is to buy corn at the standard weight of 56
pounds per bushel and discount the basic bid for No.
2 corn to compensate for the excess moisture. A
common discount scale used in Indiana during the
past year was IV2 cents for each Yz percent moisture
(or 3 cents per point) above the standard 15 Yz percent moisture for No. 2 corn. However, there are
other variations in the discount scale used in the
state.
Shrinkage
Shrinkage is the main cost incurred in drying
corn. When high-moisture corn is artifically dried or
dries later in the season, there is a moisture loss and
a dry matter loss. The amount of shrinkage caused
by the removal of excess moisture can be determined mathematically.
The dry matter loss consists of the removal of
chaff, bee's wings, tips of corn, fine parts of cracked
kernels, dust, and the respiration that occurs in the
grain. This is often referred to as an invisible shrink
or a handling shrink. The amount of the dry matter
shrink varies between Ya and 1 percent with different lots of grain and different storage and climatic
conditions. Usually, Yz of 1 percent is allowed for
the dry matter shrink.