The new Canada Western General Purpose (CWGP) wheat class was created for high-yielding wheats suited for the domestic livestock feed and ethanol markets, not human consumption.
Nonetheless, the Canadian Wheat Board (CWB), which has a monopoly on the marketing of western Canadian wheat destined for domestic human consumption or export, expects there will be times when it will have to market CWGP wheat.
“I think it’s naive of us to think that every tonne of GP wheat is going to go only into feed or only into ethanol production,” Graham Worden, the CWB’s senior manager of technical services told the Manitoba Winter Cereals’ annual meeting here March 10. “We recognize that there will be some surplus and there will be some export market opportunities for the GP class. That will happen. It’s obvious that it will and we have to be prepared for that from a sales point of view.”
Dale Hicks hopes that day is a long way off. The Outlook, Sask. farmer and Winter Cereals Canada director said GP wheat that meets the ethanol producer’s needs earns $4.25 a bushel versus the $3.60 a bushel the elevator pays for feed wheat.
“I hope farmers will use some prudence and know where their GP wheat is going,” he said. “I hope they just don’t plant it on spec and not have a home for it.”
If there’s surplus production, resulting in GP wheat exports, the depressed world price will erode the domestic price, Hicks said.
When it comes to making ethanol, some wheats are a lot better than others, Hicks said. Millers and maltsters demand certain varieties because they produce a good end product and make them profitable. Ethanol makers will be just as picky and for the same reasons.
In an interview later Worden said GP wheat, which is of low milling and baking quality, will compete in markets where sales hinge mainly on having the lowest price.
Marketing will be further complicated by the fact that the milling and baking quality of GP wheats will vary. To ensure customers get what they want the CWB will likely have to test the wheat as it’s delivered. Some very poor milling and baking varieties will not even be accepted.
“That’s down the road and we don’t have our heads totally wrapped around how that would happen, but that’s the general idea – eligibility and specifications,” he said.