WASHINGTON, May 11, 2016 - Planning on sending some wheat to Canada? Be prepared to take a hit on the quality – and price – of your grain.
American wheat producers and exporters are expressing concern that when wheat is exported to their neighbor to the north, it is graded as feed grain. Wheat grown in Canada is graded on a scale with 20 classes, and feed grain is the lowest classification.
In a recent letter to Canada’s agriculture and trade ministers, leaders of two American wheat trade groups asked the officials to work with the Canadian Parliament “to give wheat varieties grown in the United States and registered in Canada equal treatment to Canadian wheat in your bulk grain handling system.”
“For everyone to fully benefit from more open trade, we need to be able to compete fairly,” U.S. Wheat Associates Chairman Brian O’Toole and National Association of Wheat Growers President Gordon Stoner said in the letter.
The letter follows a Foreign Agricultural Service report submitted to Congress in April detailing the issues. The report said that a “number of grain sector policies limit the ability of U.S. wheat and barley exporters to receive a premium grade in Canada, including the provisions of the Canada Grain Act and Seeds Act.” Among other things, that act establishes grain grading, but only for Canadian grain. As evidence, the report cites the regional classifications in Canadian wheat grades (Eastern and Western), which “further underscores that grading is only available to Canadian grains.”
U.S. politicians are starting to take notice. In an interview with Northern Ag Network, Sen. Jon Tester, D-Mont., said Canadian grading needs to be fair to all grain.
“Quite frankly, we know it’s good stuff and we know they’re not taking it up there and feeding it to their hogs,” Tester said. “They’re taking it up there and using it to make macaroni or flour or whatever it might be.
“All I want is fair. I don’t want to treat them negatively nor more positively, but I do want our farmers in Montana to be able to take advantage of that market in a fair and efficient way.”
As for why the Canadian wheat grading system operates the way it does, a spokeswoman for the Canadian embassy in Washington said in an email to Agri-Pulse that the system “helps ensure that end-use customers get the quality of grain that they contracted for.
“Customers then have confidence in Canadian grain grades because they are part of Canada’s grain quality assurance system, which is underpinned by the 'Canada Grain Act,’” she added.
She added that the Canadian government is “aware of U.S. concerns over wheat grading and said Ottawa is “looking at what changes may be needed in the grain sector to better align it with a changing market.*
“We will consider their interests, and how to best address them, while maintaining the protections and assurances the Canada Grain Act provides to Canadian producers and their customers,” the statement continued. The embassy, however, did not offer an explanation as to why U.S. wheat is graded as feed.
According to the FAS report, U.S. wheat accounted for 74 percent of the wheat imported by Canada over the last three marketing years.
*Story updated 5/11/16 to include the Canadian embassy spokeswoman's statement.
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