"Aflatoxin and spring weather - that is their major, major focus right now," Hawkins said.
The mold that causes aflatoxin can spread inside grain storage bins as temperatures rise in spring, creating the potential for a second wave of problems after the initial outbreak at harvest.
"We've already seen some flourishing of the molds that can produce aflatoxin," said Hawkins. "Because corn is in short supply, everybody wants to get every kernel, everything they can out of the bin," Hawkins said.
"As the bin is emptied, those damaged kernels tend to concentrate in the bottom area....There is ample aflatoxin present in many, many storage facilities," Hawkins said.
Several major Corn Belt states, including Iowa, Illinois, Indiana and Nebraska, received temporary approval from the FDA last fall to let grain handlers blend corn containing aflatoxin with clean grain, and some of those states have extended the blending allowances into this summer.
Corn handlers have stepped up testing for aflatoxin but sampling the grain can be difficult since contamination levels vary greatly.
In February, the Hy-Vee Inc grocery chain recalled five product lines of its privately branded dog food due to elevated levels of aflatoxin in the corn used to make the pet food. The products were manufactured at a plant in Kansas City, Kansas.
U.S. corn stocks are historically tight, with the U.S. Department of Agriculture projecting a 17-year low by August 31, the end of the 2012/13 marketing year. Cash corn prices remain strong because buyers are scrambling to cover their needs through the summer and up until the 2013 harvest.
Aflatoxin has complicated that job, forcing some to source grain from farther away.
"It's a difficult year in working through this crop," said Jeffrey Adkisson, executive vice president of the Illinois Grain & Feed Association. "It's probably one of the most challenging years some of our people have had to go through."
(Additional reporting by Christine Stebbins; Editing by Leslie Gevirtz)