Following harvest, a corn grower must usually decide whether to sell wet corn "as is" at a moisture discounted market price or mechanically dry the grain (on-farm or by custom drying) at a total cost the grower hopes is less than the moisture discount.
One of the expenses involved in mechanically drying grain is the "cost" of the weight loss that occurs during the drying process. This weight loss by drying is referred to as "shrink" and is expressed as a percentage of the original shrinkage in order to accurately determine the total cost of mechanical drying.
Grain buyers use a number of different procedures to calculate how much grain they will actually have after the grain they buy is dried. The calculation process is called "pencil shrink." Although pencil shrink is a somewhat complicated process, corn growers can maximize the net sale by understanding pencil shrink and evaluating the sale alternatives by obtaining more than one price quote when selling their grain.
There is no standard method for pencil shrink.
This publication describes several popular pencil shrink methods, provides examples of their calculations, and discusses the use of shrinkage as a basis for evaluating custom drying and grain sale alternatives.
By far, the major portion of weight loss by drying is the weight of the water that is removed. A good way to understand the basic concept of shrink is to consider the ideal situation where all of the weight loss is water.
Total water shrink is calculated by dividing the weight of water lost during drying by the total initial grain weight. The result is then multiplied by 100 and expressed as a percentage.
Grain weight shrinkage due to mechanical drying includes weight loss due to removal of both water and dry matter. Water shrink is by far the major component of total shrinkage and the easiest to calculate. Calculated dry matter losses tend to be variable due to different pencil shrink procedures used within the grain industry.
In order to accurately compare custom drying quotes or grain sale alternatives, the corn grower should determine the shrinkage costs associated with each and choose the alternative that either returns the greatest number of dry bushels or greatest net sale.
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Article made possible through the contribution of the Iowa State University.