Currently, United States grains within a grade are traded as a homogeneous commodity when, in fact, they are heterogeneous. Biotechnology will present the market with a myriad of quality special grains, placing great pressure on the current distribution system to handle differentiated grains. Forcing the current distribution system to handle quality differentiated grains may have a significant impact on producer, elevator, and processor operations and revenues. The basic purpose of this study was to examine the economic impacts of shifting from a commodity based logistics system to a quality differentiated logistics system.