High Moisture Grading

How has this change improved efficiency, reduced costs and
promoted new drying technologies?

By Amanda Huber

In the late 90s and early 2000s, studies were conducted at the USDA ARS National Peanut Research Lab in Dawson, Ga., on the accuracy and variability of grading peanuts at high moisture content versus the normal procedure of grading peanuts after drying.

At that time, regulations required that the kernel moisture content of farmer-stock peanuts be less than 10.5 percent before grading. After several years of study, it was determined that farmer stock grade factors, lot weight and lot value when predicted from high moisture content did not significantly differ from that of low moisture content.

“We did three years of research on it, and each of those three years was equally as accurate as the other years,” says Marshall Lamb, NPRL research leader. “We knew that last year that you could grade peanuts at high moisture as well as you could at low moisture.”

After the research was conducted, the Peanut Standards Board, whom are appointed growers and industry members that advise USDA on quality and handling standards for domestically produced and imported peanuts, in 2005 recommended a change in the regulation to allow for high moisture grading. USDA followed that recommendation with a change in the Peanut Standards.

In the Federal Register, the following was written about the rule change, “The Board suggested changing the peanut quality and handling standards to allow handlers and importers to receive or acquire high moisture peanuts to promote the development of new drying technologies, increase efficiencies and reduce costs to the industry.”

An Option For Increased Efficiency
Now, three years later, while some buying points have incorporated high moisture grading into their systems, resulting in increased efficiency and reduced costs, it is thought that many others may benefit from its use.

“Every buying point should consider all options and equipment for handling peanuts,” Larry Cunningham, president of the National Peanut Buying Points Association, says. “That said, some will find that high moisture grading works for them and others will choose not to use it.”

However, Bob Parker, vice president for Golden Peanut Co., who oversees procurement, says that buying points may not know the benefits and improvements being able to grade at a high moisture could bring to their processes.

“I think it’s a good tool that maybe people aren’t as aware of as they could be,” Parker says.

Anyone who has been to a buying point in the peak of harvest knows how busy they are with peanuts coming and going. One of the most frustrating situations, buying point owners and managers say, is having inspectors on the clock and no peanuts to inspect, or having peanuts that need grading, but the inspectors have gone for the day.

A lot of peanuts come in in the afternoon, and they are put on the dryers. In the morning, the peanuts come off the dryer, and inspectors grade like crazy until just after lunch. Then, they run out of things to grade because peanuts that came in that morning are still on the dryers.

About four o’clock, they start testing those on the dryer. Then the question becomes, ‘Do you keep the graders on overtime?’ But, there may be only so many peanuts, so the graders go home and then about nine o’clock, the loads start getting dry, but the graders are gone, and the managers have to wait.

In the meantime, growers are often needing the trailers back.

This problem is overcome with the ability to perform high moisture grading.

Better Utilize Inspectors
“Being able to use high moisture grading, you can utilize the inspectors better,” Parker says. “If you have loads that come in late in the afternoon, you can go ahead and have them inspected. Then, put them on the dryer and if they get dry in the middle of the night, they can be dumped and the trailer is free and ready to go come morning.”

Roger Branch, vice president of Southeastern Gin and Peanut in Surrency, Ga., says they handle nearly 25,000 tons of peanuts and look at high moisture grading as a way to handle more peanuts with less fixed costs.

“We were looking at it from a capacity standpoint and being able to turn trailers,” Branch says.

“The testing showed that it was consistent, and it looked like something that was feasible for us to implement. We would need to have one-third more trailers again to handle the peanuts without being able to grade at high moisture.”

Ron Dozier, manager of Producers Peanut, LLC., Bartow, Ga., says high moisture grading has become on integral part of keeping their buying point running smoothly.

“We have to have things very fluid coming through our buying point because we have no storage,” Dozier says. “We are running 24/7, and sometimes I have loads coming off dryers at seven o’clock at night, when graders are off. With the ability to grade wet peanuts, I am better utilizing the graders and better utilizing my night crew. We just flow better.

“If you think about it, about the only marketing advantage we have is our ability to be efficient,” he adds.

Turn Trailers More Quickly
Dozier says the bulk of their product comes in on semis, and they also own 75 semi-drying trailers and 25 of the 21-foot trailers. Initially, he was reluctant to use high moisture grading and, because his farmers were as well, they decided to experiment with 10 loads of peanuts.

“We really had to prove it to ourselves that it would work for our needs. But after we saw that it would work, last year I had very few questions about it.”

Dozier says they went from10 percent of their growers signing up the first year to about 60 to 70 percent signing up from the start the next year. Others producers signed up as the season progressed.

“Sometimes it became a matter of, ‘I can get you that trailer right back if you will sign this sheet’,” he says.

Dozier also says they used it last year if they saw a bind coming. “This year, we may do it from the beginning so that we do not get in a situation where we have to catch up.”

Overall, Dozier says it has benefitted their buying point by better managing graders and by not having to invest in more drying trailers, an additional economic advantage.

Another benefit, says Cunningham, is from having an official sample of incoming moisture.

“Most of us get an initial moisture sample from the top of the load,” he says. “This usually is a little dryer than those peanuts in the load and not as accurate as the official sample. Since the peanuts are going on the dryer, it does not matter that much (the grower actually benefits in lower drying charges from a low first reading), but the point is that the official sample is at least marginally better.”

Reasons For High Moisture Grading:
• Better utilize inspectors
• Handle more peanuts with less fixed
• Keep peanuts flowing through system
• Eliminate logjams
• Turn trailers more quickly
• Reduce number of no-sales
• Provide efficiency for customers

Concerns When Using
High Moisture Grading:

• Approval needed from both grower
  and handler
• May require more management
• Oversight of system to eliminate
  possibility of dumping wet peanuts

Wet Peanuts In Storage A Concern
Cunningham says yet another benefit is that the number of no-sales is reduced when using high moisture grading, but that issue is a two-edged sword.

“The biggest downside to high moisture grading is the possibility of dumping high moisture peanuts into a warehouse,” he says. “This risk is of such magnitude that some shellers or handlers will not permit it at their facilities.”

Dozier is also concerned about folks pushing the envelope too much and ending up with too many wet peanuts in a warehouse.

“When you are looking at a season like this year, which will probably be one of our top years, the high moisture grading has become an integral part of our operation. I don’t want to lose it,” he says.

Parker agrees that there is a risk that a buying point could dump a load of peanuts into a warehouse by mistake, before they were properly dried.

“Using the conventional method, Federal State Inspection Service (FSIS) would catch it. That is one reason why FSIS requires that the handler give consent for a buying point to be able to use high moisture grading,” he says. “We approve buying points that we have confidence will do it right.”

Checks And Balances A Must
Branch says they have system of checks and balances in place to make certain that a high moisture load doesn’t get dumped.

“I don’t think it will work for everybody,” he says. “You have to have some way to make sure that load doesn’t get dumped.

“Our system has a bar-coded tag on every trailer, and we follow it at every point through the system. If we have a driver with a load and they are trying to dump it, it will tell him that the load is not ready and needs to be put back on the dryer,” Branch says. “It will tell them if that trailer is where it needs to be or not.”

Cunningham says that a buying point using high moisture grading must use a higher level of quality control over the drying process to ensure that dumping of high moisture peanuts into the warehouse does not occur.
“This higher degree of management may be too costly for the benefit in some cases,” he says.

But to Dozier, that extra management is worth the benefits. He adds that, although there are little things that have to be learned with high moisture grading, by last year, he had very few questions.

“Grades are not converted on the 95,” he says. “We have to pay attention to that and make sure we are not costing the farmer or giving them benefits they shouldn’t have.”

New Drying Technologies Lagging
Besides increasing efficiencies and reducing costs to the industry, the third reason for changing the peanut standard to allow for high moisture grading was to promote the development of new drying technologies. However, this does not seem to have occurred thus far.

Lamb says that if more people started using high moisture grading, then it was more likely that someone would probably start to look at different drying technologies, such as continuous-flow drying, more seriously.

Cunningham says his concern with any new drying technology would be the speed at which moisture would be removed from the kernel and that it could compromise both peanut flavor and shelling quality.

“Sometimes we look for ‘Buck Rogers’ type answers when we should consider ‘Roy Rogers’ solutions,” he says. “When we started talking about continuous-flow dryers in the Southeast, most of the peanuts were drying on 14-foot wagons.

“Today, much of the industry is moving toward the 45-foot semi drying trailer. This is the case at our buying point. Drying quality is the same or better on semi trailers as it is on drying wagons.

“The cost of equipment on a per-ton basis is less. Fuel and electricity are comparable. Handling economies are increased five fold, as every semi trailer represents five 14-foot wagons,” Cunningham says. “This efficiency is felt at every stage of the buying point process: office paperwork, drying labor, grading, unloading and transportation. A continuous dryer would not make any significant improvements to this process, as the crop must still be handled on a load-by-load basis.”

Grading Improvement In Testing
But Cunningham does point to a new technology that has great potential to improve the grading process.

“Last year, there was testing with an X-ray machine, which is able to grade a load of peanuts in 15 seconds,” he says. “This idea has the most potential of any concepts put forth to date regarding the bottleneck at the grading station.”

Lamb says they only have preliminary results, but so far using the X-ray technology for grading has looked promising.

“This year, we have a full-scale project approved, and we will be doing a nationwide study with X-ray grading,” he says. “We are trying to do a large enough study to have the numbers to validate our research in just a couple of years.”

Cunningham says this process will allow the inspectors to be technicians instead of common laborers.

“The difference will be noticeable in the quality of the grading process. Today, a peanut inspector spends eight to 12 hours a day hand separating peanuts from foreign material, hand shelling peanuts not shelled by the sample sheller and hand sorting damaged peanuts from good peanuts. These tedious, mind numbing, finger-bleeding procedures produce a rapid rise in fatigue as the day wears on,” he says. “The X-ray machine will truly be ‘Buck Rogers’ technology.”