The Process of Corn by cuiliqing


									      The Process of Corn

         Produced Into

Canned Corn at the Grocery store
      Written By: Jeff Walker

            AGEC 314
                                  Table of Contents
Assignments Submitted to Date…………………………………………………………………………………………………1

Project Details……………………………………………………………………………………………………………………………2

Areas of Production and Economic Contribution……………………………………………………………………….3

First Assembly……………………………………………………………………………………………………………………………4

History of Commodity Price…………………………………………………………………………………………………..5-6

Imports and Exports of the Commodity……………………………………………………………………………………..7


Risk Management…………………………………………………………………………………………………………….…10-11

Marketing Groups……………………………………………………………………………………………………………………12


Four Processors of Commodity Corn………………………………………………………………………………………..14

Distribution Channels………………………………………………………………………………………………………………15

Retail Marketing Channels……………………………………………………………………………………………………….16

Reference Page………………………………………………………………………………………………………………….17-20
                       Assignments Submitted to Date
1. Assignment #1 submitted on January 28, 2008
2. Assignment #2 submitted on January 28, 2008
3. Assignment #3 submitted on February 4, 2008
4. Assignment #4 submitted on February 10, 2008
5. Assignment #5 submitted on February 18, 2008
6. Assignment #6 submitted on February 23, 2008
7. Assignment #7 submitted on March 3, 2008
8. Assignment #8 submitted on March 17, 2008
9. Assignment #9 submitted on March 24, 2008
10. Assignment #10 submitted on March 31, 2008
11. Assignment #11 submitted on April 6, 2008
12. Assignment #12 submitted on April 14, 2008
                                        Project Details
        Corn is a commodity that is grown in just about all states in the United States. I have
selected this commodity simply because of everything that is going on with this crop in the
marketplace. Also, I worked with this crop for a summer detasselling corn in Nebraska. The
National Agriculture Statistics service (N.A.S.S.) has made it possible to view the planting and
harvesting dates for all the corn producing states in the U.S. I have chosen states of every
region of the U.S. to show the difference in planting and harvesting dates. In the southeast, the
N.A.S.S. has recommended the planting dates to start roughly around March 5 and to end all
plantings on May 18. The harvesting dates for Alabama are claimed to be July 21 through
November 2. The northeast region of the U.S. in New Jersey, N.A.S.S. assures that the optimal
planting time be around May 7 and continue until June 28. New Jersey’s harvesting time is
anywhere between October 1 through November 28. The state in the Central region and with
the most corn production in 1996 would be Iowa. The N.A.S.S. suggests Iowa to have their
planting time period to be around April 22 through June 3 and to be harvested around
September 17 through November 17. Oregon is in the Northwest and is recommended by the
N.A.S.S. to plant their corn crops from April 20 through June 15 and to harvest that crop from
October 10 through December 15. California lies in the southwest corner of the U.S. and is
insisted by the N.A.S.S. to plant corn from March 15 through July 15. Harvesting times in
California should roughly be anywhere from September 1 through Dec 1. Last but certainly not
least Texas is located in the south-central region of the U.S. N.A.S.S. informs Texans to plant
their corn crop from February 28 through May 15 and to have the harvesting dates be around
July 16 to November 1. As one could tell, throughout the overall U.S. the planting times are
dependent on the climate and should be planted in late early to late spring and harvested in
early to late fall and even early winter.

        There are many different uses for corn as a commodity, many products are starting to
pop up that are produced by corn. Some of these different types of corn related products
include: the use of butanol in brake fluids, food extraction, and plasticizers; the corn syrup used
to create Dr. Pepper; stoves and furnaces heated by corn; the integration of ethanol to our
widely needed automotive fuel problem; canned corn that is found at the grocery store. Even
though there are many different products to choose from, I have chosen the production of
canned corn that is found in a grocery store. A can of corn can be found in my pantry any day of
the week. Canned Corn is easy to make, cheap, and lasts for a long time. Even though my
reasoning can be applied to any vegetable (i.e. beans, carrots, etc.) I have mainly chosen
canned corn because of my experience with the crop and my interest in the ever-expanding use
of this product.
               Areas of Production and Economic Contribution

          Corn has the capability to be grown just about anywhere in the world. It is currently
grown all over Texas, the U.S. and the world. The abbreviated states is where corn is grown: AL,
NC, ND, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WA, WV, WI, WY (National Agriculture Statistics
Service 2007). However, the U.S. has what is known as the “corn belt” which consists of Iowa,
Illinois, Minnesota, South Dakota, Nebraska, Kansas, Missouri, Indiana, and Ohio. These states
have shown in numerous studies to produce the most corn.

        The average cost of corn per bushel in the U.S. is currently $3.20 - $3.80 and was $3.04
in 2006 (Perry 2007). Also, the average cost of operations for a corn crop is $22,961 with
allocated costs reaching $21,273 summing it up at $44,234. In Texas, the corn producers sees
$467,632,000 (Traub and Strickland 2008) making the U.S. economy $21,716,106,000 from corn
production. In addition, Texas harvested two million acres of corn last year (Coppedge 2006).
This information can be viewed as corn becoming a fast growing crop in the U.S. marketplace.
                                      First Assembly
         When corn reaches a certain point in the growing phase and becomes ready for
processing, the stocks of corn are cut using a large combine. This combine will also separate the
stock from the ear as well. Once the eared corn is collected it must be stored until delivery to
the processing plant. Then the crop will be transported to the desired processing plant for the
first assembly.

        In 1997, there were 824 canned food and vegetable processing plants in the United
States (U.S. Food Marketing System 2002). The large number of canned food processors is most
likely due to the fact that corn is grown as a field crop in every state of the U.S.

         The process that corn goes through at the first level of assembly is actually quite easy to
understand. The workers of the plant begin the process by sorting the corn into different areas
based on their quality, size, etc. The corn is then sent to another station to be sprayed down
and cleaned. Once clean, workers husk all parts of the plant leaving the ears ready to be de-
kernelled. When the corn kernels are individually separated from the ear of corn, they proceed
to the next part of the process which is undergone primarily by automated machines. The corn
is separated into precise amounts that will be directly added into the can through a machine.
After the corn is added to the can, a preservative liquid will be added depending on the style of
canned corn for which is desired. The cans are preheated before they become a sealed product.
Finally, the sealed cans of corn are cooked for a desired length and temperature to make sure
the product stays fresh without proper refrigeration. Once the cans of corn have been properly
cooked, they are cooled and stored until later transportation.

        The canned corn can be shipped to all over the U.S. to grocery stores and food markets.
Many wholesalers and retailers will buy these cans of corn to sell to the public. Some of these
retailers and wholesalers include: Kroger, H.E.B., Albertsons, Tom Thumb, Wal-Mart,
Brookshire’s, etc. Finally, the cans of corn are displayed and made available for purchase for the
                                  History of Commodity Price
       Farmers growing commodity corn has many different options in submitted their product
to the market. There are many different products that use corn in some sort of their
manufacturing process to produce a desired good. Some of these alternatives include corn
used for feed livestock, the new technology of ethanol for fuel, processed corn meal, milling
corn syrup, corn starch, and processed corn flakes to name a few. Since only about 10% of
consumption is by humans, there is a lot more use for other alternative consumers.

        The largest use of corn in the U.S. market is corn in feed for livestock. Some of these
livestock include hog, cattle and poultry to name the largest consumers. The corn feed industry
is growing and the technology for livestock is growing as well. However, the increase in ethanol
for automotive purposes is increasing at a fast rate. The use of corn in feed for livestock can
potentially be diminishing in order to compensate for the ethanol production. This expansion is
increasing the cost of feeding livestock and directly causing the cost of retail foods to increase.
Therefore, the future market for corn will most likely be geared towards the ethanol production

         The future of corn production has been said to be for ethanol production. When the
ethanol bomb exploded, the entire farm economy changed and some of the biggest changes
are going to occur within the next 4 or 5 years. Everything in corn production on the farm is
changing. The price, harvesting equipment, production methods, rate of production and market
customers are all some examples of how the corn market is changing. There is the possibility of
many food processors going out of business and ethanol processors increasing. However, it is
still known that the largest factor to the change in price is due to ethanol fuel and feed

        The history of U.S. corn prices have fluctuated throughout the years. In fact, the average
price of corn in 2003 was $2.47 per bushel, $1.96 in 2005 and $4.28 now in 2008. This indicates
that even within the past 5 years, there has been an immense amount of change that has
occurred in the corn industry. Prices of the past 5 years are below in order to explain the
fluctuations in price of corn.

          In 2003, the price of corn from January through December lists as; $2.33, $2.34, $2.33,
$2.34, $2.38, $2.34, $2.17, $2.15, $2.20, $2.12, $2.20, $2.31. This year the range was around
$0.26 between the lowest and highest prices per bushel. Though this is not a huge gap in prices,
it still shows that there is a lot of activity going on in the corn industry.

       In 2004, the price of corn from January through December lists as; $2.39, $2.61, $2.75,
$2.89, $2.87, $2.79, $2.51, $2.34, $2.20, $2.15, $2.05, $1.99. This year shows to be a lot more
of a range. This year’s range was $0.90 which explains that there was a lot more action going on
in the corn industry than last year.

        In 2005, the price of corn from January through December lists as; $2.12, $1.95, $2.02,
$2.00, $1.98, $2.03, $2.11, $1.95, $1.90, $1.82, $1.77, $1.92. The year of 2005 was below that
of the last year. This could be due to many conditional factors such as the unpredictable
weather or a yo-yo like economy.

       In 2006, the price of corn from January through December lists as; $2.00, $2.02, $2.06,
$2.11, $2.17, $2.14, $2.14, $2.09, $2.20, $2.55, $2.88, $3.01. This year is back up to the high
range of $1.01 and this could be caused by a few different factors. Some of those factors could
include a change in consumption patterns, change in crop supply, change in economy, or even
change in perception of health by consumers.

       In 2007, the price of corn from January through December lists as; $3.05, $3.44, $3.43,
$3.39, $3.49, $3.53, $3.32, $3.26, $3.29, $3.29, $3.43, $3.76. Still the steady increase in price
from a range of about $0.75 shows that the cost per bushel is still fluctuating but steadily
increasing from the previous year.

      Finally in 2008 in January the cost per bushel is $4.28. This shows that the amount of
change from December 2007 to January 2008 is $0.52 indicating that there has been a huge
change in the economy or something of that nature to have changed the cost this much.

These prices of corn can fluctuate throughout a recorded year with implications of a pattern or
not a pattern. There is somewhat of a pattern in the months of around March through May in
that there are usually high prices around that time of year in this data.

                                         5 Year History of United States
                                                  Corn Prices
                   Price per Bushel

                                      $2.00                                  2003
                                      $1.00                                  2004
                                      $0.00                                  2005


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                  Imports and Exports of the Commodity
        The United States absolutely dominates the world-wide corn production market.
According to Baker (2008), there were about 70% of the worlds corn came from the United
States in the 1990’s. This trend has seemed to continue since then as well.

       The U.S. imports a very small amount of commodity corn compared to the amount of
exports. In fact, the past five years of imported bushels did not change very much. In order
from 2003 through 2007, imported bushels of corn were an average of 2,946,641, 2,674,389,
2,651,986, 2,293,261, and 2,853,141. This data indicates a relatively small and constant trend in
the importation of corn in the U.S. These small numbers are absolutely due to the fact that the
U.S. dominates the international commodity corn market.

        On the other hand, the production of commodity corn has been rising for quite some
time now. The other large exporter’s of corn is Argentina and China. The largest customers for
U.S. commodity corn are Japan, Mexico, South Korea, Egypt, and Taiwan. In order from 2007
through 2003, commodity corn exports to Japan (the largest consumer in those years) were
recorded at; 14,951,558, 16,036,724, 12,566,024, 12,702,226, 12,003,985. These numbers are
measured through metric tons. The amount of corn exported from the U.S. to Japan is
ridiculously higher than that of their closest competitor. Their closest competitor has been
Mexico and has not come closer than 5 million metric tons within that specific time period.
However, according to Whitton (2007) there will be 6-8 billion bushels of commodity corn
exported in 2015.

        The major canned corn importers of U.S. canned corn are Japan, United Kingdom, and
Germany. Also, Davis (1992) declares that when looking at the world market for canned corn,
these 3 countries purchase 70% of all U.S. canned corn. Davis again notes that desired United
States canned corn has grown 54% from 1987 to 1991. However, some factors can contribute
to limit the potential for the amount of exported canned or commodity corn. For example,
Quotas and licensing requirements can be limiting factors to the U.S. for exported corn.

       According to the Rap Market Information Bulletin (1995), there was almost no fresh
baby corn found here in the U.S. and just about all the imports of baby sweet corn were from
Thailand. In addition, the amount of imported canned corn increased 152% from 1994 through
2003. The two large contributors to this large increase have been from Canada with 14,727 tons
and Thailand with 9,629 tons of canned corn. This data indicates that in the past, Thailand has
been a large contributor to the amount of canned corn imported into the U.S.
       The grade which corn can be grouped into can be defined through a few different
evaluations. The transformation of commodity corn into canned corn can be difficult to grade
because one must grade both the commodity and the product at two different times. The grade
must be given to commodity corn before the first assembly receives it. Also, the grade must be
placed on the can before the wholesalers, retailers, and consumers receive it as well. The
grades below will better explain the difference between the grades of corn.

        In order to determine what the grade for commodity corn, the grader must determine
which of the groups it must be classified into. The United States Department of Agriculture
(2006) filed the following data. First of all the corn should be classified into yellow, white, or
mixed corn. The corn can be then separated into U.S. No. 1, U.S. No. 2, U.S. No. 3, U.S. No. 4,
U.S. No. 5 or U.S. Sample Grade. U.S. Sample Grade is the lowest grade possible and indicates
the specified corn did not meet any other grade requirement. The minimum test weight
required in order from U.S. No. 1 grade through U.S. No. 5 grade is 56.0, 54.0, 52.0, 49.0, and
46.0. This minimum test weight is determined by a percentage of the average bushel weight. In
addition, the USDA requires there be a maximum amount of damaged kernels and broken
corn/foreign material. Damaged kernels can mean many things such as heat damage, mold
damage, frost damage and pest damage. The maximum percentage of total damaged corn is, in
order from U.S. No. 1 grade through U.S. No. 5 grade, 3.0, 5.0, 7.0, 10.0, and 15.0. Also, the
maximum percentage of broken corn and foreign material is in order as well and requires 2.0,
3.0, 4.0, 5.0, and 7.0.

        On the other hand, grading canned corn has its’ differences as well. The United States
Department of Agriculture’s Agriculture Marketing Service (1999) reports the following data.
Canned corn can be separated into 4 distinct categories including U.S. Grade A, U.S. Grade B,
U.S. Grade C, and U.S. Substandard. When looking at the U.S. Grade A canned corn, one can
assume that the kernels will have similar varietal characteristics. This grade should also have a
good appearance, qualified cut and good flavor and odor. These kernels should also have the
exact tenderness and maturity for the specific variety of corn for which it is declared. Next, U.S.
Grade B is relatively similar in that it requires the specific variety to hold its characteristics.
These kernels must also have a reasonably good appearance from the quality of cut that was
made. Grade B kernels should also have a descent flavor and odor. The tenderness must
reasonably fit the specified variety type and maturity. In addition, U.S. Grade C is required to
have all of the desired characteristics of the specified variety as well as a fairly good
appearance. Grade C kernels must also have a descent cut with a fairly good odor and flavor.
These kernels are most likely going to be tough in relation to the desired variety. Finally, the
U.S. Substandard is the lowest grade for canned corn which indicates that it is unable to acquire
any of the requirements of any of the other three grades.
                                       Risk Management
Use of the Futures Market

        In the corn Futures market, both the producer and the processor can benefit from the
fluctuation of the market. However if not managed correctly, the Futures market can devastate many
farmers and processors. The success depends on the ability of the user to effectively manage the
contracts in his or her account.

         When corn farmers decide to use the Futures market in order to “seal in a profit”, there are
some things that the farmer should keep in mind while entering the market. First of all, the corn farmer
absolutely has to realize that they are most likely not going to be able to predict the fluctuations of the
Futures market. Rather, they need to understand and respect it for what it does and not try and take
advantage of the Futures market. This reasoning should be understood because corn is very high in price
right now! Farmers need to recognize the high prices and utilize this to their advantage; however, every
farmer also needs to know that high prices definitely do not last long. When buying or selling contracts,
farmers should keep in mind that the high prices of corn are probably not going to last for a long time.
Basically, high prices should yield to more profits for farmers and low prices will most likely yield lower
profits. Farmers need to also understand and not fear that the trend in prices tend to drop in between
planting and harvesting time and so when farmers plant their corn in the spring time, they should expect
a drop in prices.

        On the other hand, processors utilizing the Futures market should be aware of some of the
things that enable them to profit more from the fluctuations in the corn Futures market. Similar to
farmers, processors should understand that they most likely will not have the ability to predict the
fluctuations in the corn Futures market. Processors know that the higher price for a bushel of corn is
good for the farmer but bad for the processor because he is the one having to pay that price. The same
goes with low prices. For example, if price per bushel of corn drops, then the processor will probably be
relieved because that means he does not have to pay a high price. Corn processors need to utilize the
market very carefully right now because of the high prices. However, they should expect some sort of
drop in the price for contracts. Processors should have different thoughts about the Futures market and
should utilize this tool differently as well.

Commodity Exchanges

        When trying to enter the Futures market to utilize this tool, one should understand where and
how to trade contracts. There are 5 different months out of the year to which people can trade
contracts of corn. These months are December, March, May, July, and September. Futures contracts can
be sold at the Chicago Board Of Trade (CBOT) which is the oldest trading center in America. The next
thing that should be done is realizing the symbols of the trade. A trader should recognize corn when he
or she sees the C in front of some letters and also there could be a ZC for electronic trading.

       Next, the types of grades deliverable are Number 2 yellow corn, Number 1 yellow corn sold at 1
½ cents off contracts price, and Number 3 yellow corn sold at 1 ½ cents below the contract price. In
addition, the last day for trading is the business day before the 15th day of the month. On the other
hand, the United Futures Trading Company, Inc. describes the last day for trading to be the 2nd business
day following the last trading day of the delivery month. Trading hours are Monday through Friday, 9:30
a.m. -1:15 p.m. and electronic trading times are Sunday through Friday 8:30 p.m. - 6:00a.m. All of these
times are Chicago times.

        Historically, United Futures Trading Company, Inc. reports that corn trading has been used for
many different reasons. For example, 5% has been exported, 5% has been for High Fructose Corn Syrup
(HFCS), 11% for ethanol, and 57% for feed/residual reasons. There are many more reasons that corn
Futures contracts are traded for!

Contract Specifications

        When looking at the details concerning contracts of corn, one should know and understand
what a corn contract consists of. Chicago Board of Trade (CBOT) explains that a contract of corn holds
5,000 bushels of Number 2 yellow corn. CBOT also states that these contracts can be bought or sold in
one of the 5 delivery months which have been designated. The Chicago Board of Trade is the largest
trading organization for corn.

Delivery Points

         The regulations of corn delivery in the Chicago Board of Trade are found in Rule C1041.01 of
CBOT regulations. These rules indicate that there are 4 different locations at which the corn contracts
can be exchanged. The first location is divided into two different locations the Chicago Switching District
and the Burns Harbor, Indiana Switching District. These two areas are defined by the Tariff ICC WTL
8020-series according to CBOT. The second delivery station is located in Lockport-Seneca Shipping
District. CBOT defines this District as the area between Illinois Waterway mile 304 and mile 244.6 at the
Marseilles Lock and Damn. The third shipping district is called the Ottawa-Chillicothe Shipping District.
This district is defined as the waterway between mile 244.6 and mile 170 of the Illinois Waterway. The
last delivering district is called the Peoria-Pekin Shipping District. District geography consists of the area
between mile 170 and 151 at Perkin, IL.
                                  Marketing Groups
       There many different groups supporting the corn industry across Texas. These groups
are helping create a positive environment for which corn producers and consumers can live.
The creation of a positive outlook to corn enables the vast amount of corn growers to supply
the enormous corn consumption population. These companies are helping the ability of the
Texas corn market to thrive and be possible.

        Such companies include Andy Vidaure farm from Natalie, TX. This company sells corn by
directly to the public. At’l Do Farms in Lubbock also sells corn directly to the public as well as
through the internet. Millican Produce sells their corn directly to the public, directly to the
wholesaler and to the gourmet market. My Father’s Farm sells corn directly to the public and
through the internet. Richardson Farms of Rockdale, Texas also sell corn directly to the public
and through the internet. However, South Texas Milling sells their corn sells their corn directly
to the public, directly to the retailer and through the internet. There are many ways to market
your product, and some methods may seem to work better for a particular geographical area or
consumer population.

      Some strength’s that these companies possess include the ability of these companies to
market to a wide variety of customers. These companies are able to reach out and market their
product because they are very capable of reaching the desired consumers. Also, this does not
mean that these companies can reach all possible consumers.

        Some weaknesses of these companies include the inability to reach every possible
consumer available. They only reach the consumer to which they have targeted. In order for
some of these companies to stand out and reach potential buyers, they need to have the
capability to use all methods possible to reach that consumer. Some companies may use
gourmet marketing in a situation where that is not necessary or using direct to public where
there is not even a market for the corn. These are examples of not using the correct methods to
target an audience.

      Some opportunities in the corn marketing system include the thriving capability of this
commodity to overcome many adversities. The expanding usage of this commodity is helping to
market itself. Hopefully, the ability of this widely used commodity will continue to market itself
and make create a larger market.

       Some Threats involving corn marketing companies include the fact that there are no
safeguards in the price of corn. This recent fluctuation in the price of corn is making the
marketing of corn easier, however, if the market turns then it could render the capability of
marketing companies to reestablish the good reputation that corn has gotten.
        Corn can be easy to transport because of the large mass of corn that is transported on
any given day. Finding the most efficient transportation, however, can be difficult. The three
ways corn is usually transported is by truck, rail, and barge. According to Olowolayemo, in 1995
trucks accounted for 45% (97,407,000) of the total movement of corn, Rails were 36.5%
(79,333,000), and barges were 18.7% (40,778,000). These three means of agricultural
transportation can help and hurt the people who use them by several factors. Some of these
factors include cost, travel time, and destination which all have advantages and disadvantages.
Looking at the necessary transportation to deliver commodity corn and canned corn can help
one’s better understanding of this phenomenon.


        When farmers harvest their corn crops, they will usually take the corn by truck to the
local elevator for storage. Then, first assemblers and processors will have the commodity corn
carried by truck to either a rail or barge, depending on the distance or just by truck to be taken
to those processing plants. However, if the rail or barge takes them mass distances then a truck
usually must pick those up and deliver them directly to the plant. The most common
transportation for corn is through truck because of the perishability of the commodity and the
speed to which trucks can deliver such loads.

Consumer Product:

        After the corn has been processed and packaged, the canned corn must be delivered to
distributers and then to retailers. Again depending on the company who will be selling this
product, it depends on what kind of transportation will be used. If the company is located in
Minnesota, they will most likely transport the canned corn by means of truck. Basically the
mode of transportation to the distributors depends on the location of the receiver. For
example, canned corn will be distributed to a central location and then filter down to more
specific locations. There may be a distribution center in North Texas for all of the Southern
States of the United States.

        When these cans of corn have been processed, the USDA requires a waiting period of 14
days before they are to be shipped. These cans are unitized and strategically placed on pallets.
The USDA requires these units to be secured to the pallet and then wrapped or banded to the
pallet to ensure the wholeness of the pallet. Also, the pallet itself must be of good quality wood
to be sturdy enough to hold the weight.
               Four Major Processors of Commodity Corn
Lake Area Corn Processing (LACP):

        LACP is located in Wentworth, South Dakota. This processing facility processes ethanol
and livestock feed, however, the most of the focus is to ethanol. This “Dakota unit” produces
about 48 million gallons of ethanol per year. LACP also uses 17 million bushels of corn per year.
This company is privately owned and is run by roughly 39 employees at this location in 2006.
Also in 2006, LACP was able to have sales of $103.9 million.

Archer Daniels Midland Company (ADM):

        ADM processes oilseeds, corn, and wheat and is located in Decatur, Illinois. This
particular, however, mainly processes soybeans, peanuts, and other oilseed products. In 2007,
ADM earned revenues of $44,018 million in sales. Also, in 2007 ADM reportedly employed
27,300 people. Uniquely, ADM processes food in other countries such as Asia, Canada, Europe,
South America, and the United States.

Little Sioux Corn Processors (LSCP):

        The company known as LSCP is located in Marcus, Iowa. LSCP has recently begun
mainstreaming efforts and resources to ethanol production. LSCP also has a large facility to
process corn oil as well. In September 2005, revenues were $95.9 million, 2004 reported $85.5
million in sales, and 2003 had $31.8 million in sales. This facility in Marcus, Iowa has 36
employees. Interestingly, LSCP buys 3 million bushels of corn per month and also either loads or
unloads 175 trucks everyday.


       Cargill is very famous for many different types of business that they conduct. They
conduct everyday business in areas such as futures brokering, biofuels, grain, cotton, sugar,
petroleum, etc. This particular corn processing facility is located in Wayzata, Minnesota where
2000 employees run and operate this processing plant. In 2007, 158,000 people were employed
through Cargill in some form or fashion. This company is know to be private and is international
                                 Distribution Channels
        Canned corn has many different means of distribution. For example, there are many
different kinds of companies who can corn and slap there label on it, and then sell that can to
consumers like you and I. The following will go into greater detail on those channels of
distribution which will make this process more clear.

         Most of the corn that is processed and canned is done at a facility which owns the brand
and “slaps” the label on the can. When the corn is in the final stage of processing (i.e. in its can)
it is usually then sold to large wholesalers and distribution centers. The corn is usually kept here
for some time because of demand and storage reasons. The canned corn is able to stay in one
place longer than other food products because the can is sealed and can last a long time, unlike
some other ready-perishable items. These wholesalers can be independently owned or owned
by a large company. For example, the Green Giant processing facility can sell Wal-Mart pallets
of bulk canned corn and that Wal-Mart distribution center is the central distribution facility for
that particular region. Then those cans will be sold to particular Wal-Marts around that region,
which in turn is put pon the shelf for consumers like you and I to buy. When the cans of corn
are not being handled like that, they usually travel through this channel. When the trucks with
corn leave the processing plant they are taken to an individual wholesaler. They sit there until a
retailer such as Albertson’s or H.E.B. call for them to be delivered to a store. When they arrive
at the store, they usually sit for a small period of time and then are put on the shelf at the
desired time.

       The largest channel is from the processor to the wholesaler because this is where it is
most important for the retailers. Mainly because when the wholesaler is out of that particular
food, which rarely happens, then there is going to be a lot of trouble for the retailers. When
consumers see the individual can on the shelf, they have been through many channels to get
                             Retail Marketing Channels

        Most of the marketing done for canned corn is achieved through the individual corn processors.
They will usually market to consumers to get you to buy their canned products. For example, Green
Giant may advertise to specific consumers to eat their canned corn products while advertising for other
products, such as other canned products, at the same time. The following will inform the reader on
other market channels in which many companies go through in order to get consumers to purchase
their canned corn products.

        According to the Agriculture Marketing Service (2008), programs are put into place to make the
purchasing of canned products including canned corn to consumers. The integration of the government
to the marketing of canned products has the capability to help the canned food industry.

         In addition, companies will usually help to inform consumers on their products. This is a very
effective way for canned corn companies to try and get their products out to the consumers and for
them to try and purchase the product. According to the General Mills website, one can go in and look at
all of the products that they have to offer including canned corn. When one looks up canned corn on
that site, they can also see the nutrition facts that the cans of corn have. Also, according to a site on
business wire, companies such as Green Giant are incorporating new ways for families with young
children to use products such as canned corn in easier ways. The implantation of easier packing to help
the use of products such as canned corn into the households with young children is considered efficient
marketing. The easier-to-open packages have the capability to increase sales but alter the traditional
canned corn market.

        Getting canned corn into the shopping cart of the consumer is easier said than done. The
placement of specific canned corn companies on the shelves of the grocery store is very pivotal and a
very large marketing strategy. Canned corn companies must ensure that consumer know all about their
products in order from them to want to purchase the product. So some companies have made a
reputable name so that consumers will see their name on a product and want to buy it.

       Basically, the marketing channels existing for canned corn are consumed by the individual
processors. These companies are the ones who market to consumers and eventually make the cans of
corn end up in the shopping cart.
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