Kub's Den

Commercial grain is sold by weight; for example, 220,000 metric tons of soft red winter wheat sold to China. But, as it's gathered in from the fields this time of year, it is purchased by volume; for example, 943 bushels of corn in a semi-truck's load. Over the years, referring to grain in bushels has become so standard, so automatic among Americans in the industry, we almost never stop to think about it.

For those who hear about U.S. grain production for the first time, or who suddenly need to know some crucial number of supply or demand, it can be a great help to spell out exactly what a bushel is, and what happens to all those kernels and bushels and tons of grain being amalgamated into the commodity supply chain.

Technically, a bushel is a unit of volume equal to about 9.3 gallons. But a bushel, practically, in the way it's used by the grain industry today, is some standard amount of weight that each type of grain "should" weigh if it was of a certain quality, moisture and density and poured into a 9.3-gallon container. For soybeans or wheat, that standard test weight is 60 pounds per bushel. For No. 2 yellow corn, that standard test weight is 56 pounds per bushel.

So, when a truck full of harvested grain weighs in at the local grain elevator with 52,808 pounds of corn, the elevator will simply divide the weight by 56 and pay the farmer for 943 bushels of corn, whether that corn actually filled out the volume of exactly 8,769.9 gallons or not. Whether the actual density of the corn is 56.0 pounds per bushel, 56.8 pounds per bushel or 58 pounds per bushel doesn't matter. Effectively, the industry talks in bushels, but pays in pounds.

It gets more complicated if the corn's test weight is less than the standard 56 pounds per bushel, which is a serious concern this year in areas that experienced drought late in the season. The price paid by the elevator might be discounted by $0.02 per bushel for each pound it tests under 56 pounds per bushel. It also gets more complicated if the grain has a high moisture content -- nobody wants to pay for water -- which itself affects the final test weight density of the grain. However, for now, that's not as important as simply picturing each bushel.

Assuming everything about the grain itself is standard and correct, and none of the field equipment has broken down, and all of the team members are healthy and showed up to work that day, and the combine is chugging along through the field at 4 miles per hour, then the ears are flowing into the header, the grain is being threshed and separated within the innards of the machine and it's coming out as a golden flowing substance from the auger spout, pouring into the grain cart. This is the magical moment of the growing season when we finally get an opportunity to get up close and personal with the commodity product that has been so painstakingly produced through the past five months of work and care.

Bushels upon bushels accumulate into piles and truckloads and grain bins, or even just as plain, anonymous numbers on a computer screen, clicking higher and higher through each field. But to give those numbers some meaning, let's think about each individual bushel and where all those kernels are going.

A little experimentation with a kitchen scale (and a lot of counting) shows that there are about 1,394 kernels of corn in each pound, which is to say each kernel of dry corn weighs about 1/3 of a gram. So, let's say there are 78,064 kernels in one 56-pound bushel. Kids these days don't know what a bushel basket is, but maybe they can envision something the size of a 50-pound bag of dog food filled with 78,064 kernels of corn. A 5-gallon bucket would hold about half a bushel, and two less-than-full 5-gallon buckets would add up to a bushel of corn worth about $4.50 in October 2023.

About a third of the U.S. corn crop will end up being processed in an ethanol plant; but by weight, the final products of an ethanol plant are split about 50/50 between liquid ethanol fuel and byproduct distillers grains solids for animal feed, called DDGs. Therefore, from each bushel of corn, only 14.8% of its weight -- or 11,571 kernels -- ends up as fuel in the United States.

Over half the weight of each bushel (61.9%) will eventually get fed to livestock in some form, somewhere, and enter the food supply chain in that manner -- perhaps as direct corn usage here in the United States (one-third of each bushel), or perhaps as DDGs left over from the ethanol production process, or perhaps as either corn or DDGs that get exported to be eaten by some other country's livestock. If we counted out how many kernels of corn from each bushel get exported, proportionally from each bushel of 78,064 kernels, to our various trading partners, then we would have to count out:

China -- 2,723 kernels

Mexico -- 2,545 kernels

Japan -- 1,544 kernels

Canada -- 690 kernels

Colombia -- 507 kernels

South Korea -- 263 kernels

Honduras -- 152 kernels

Guatemala -- 151 kernels

Taiwan -- 139 kernels

Saudi Arabia -- 128 kernels

All other countries -- 791 kernels

Think of that the next time you see a small pile of corn spilling over the top of a combine's hopper or leaked out on the side of the road. If you stopped to count out the individual kernels or pounds or bushels, you could hold a proportionate sample of what we ship to South Korea, for instance, in your cupped hands. You could spend a moment considering how each little piece feeds into the great big symphony of our grain supply chain.

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Elaine Kub, CFA is the author of "Mastering the Grain Markets: How Profits Are Really Made" and can be reached at analysis@elainekub.com.

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