Two Saskatchewan groups say a move by the Canadian Grain Commission to tighten test weight and total foreign material tolerances will cost farmers. They want it reversed.
“Not only was this decision ill-considered and finalized hastily, but it was also done without proper consultation with producer groups and individual farmers who will bear the costs of the tighter standards,” said Brett Halstead, chair of the Saskatchewan Wheat Development Commission (Sask Wheat) in a July 17 release.
Why it matters: Farm groups say the change could push wheat loads to a lower grade.
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On June 13, the Canadian Grain Commission announced that tolerances for test weight and foreign material would be harmonized for most classes of western wheat. Formerly, there were separate ‘primary’ and more strict ‘export’ tolerances.
As of Aug. 1, affected tolerances will all be aligned with the export threshold.
In the July 17 statement, Sask Wheat and the Agricultural Producers Association of Saskatchewan said the tighter standards will mean that wheat otherwise able to be graded No. 1 could be downgraded as low as feed if test weight is the determining factor.
The former separate standards recognized that blending and cleaning throughout the grain handling system would improve quality, the groups added.
“Sask Wheat is calling on the CGC to reverse the decision to harmonize the test weight standards at export standards before it creates additional production and price risk for Saskatchewan’s wheat farmers,” Halstead said.
In support
The Western Grain Elevators Association said harmonized standards will make payment to farmers fair because they will be paid for the quality they grow. Otherwise, the system harkens back to the Canadian Wheat Board days, when wheat was pooled and farmers were paid an averaged-out price, said Wade Sobkowich, WGEA’s executive director.
The association lobbied for standard harmonization, CGC records show.
Not long ago, farmers wanted falling number to become a grading factor so they could be properly compensated for quality, Sobkowich said. Elevators didn’t have the right technology to effectively test that at the driveway, “but the notion was right.”
Test weight, a measure of the grain’s density, should have a similar effect in allowing farmers to be paid for quality, Sobkowich said.
Blending high and low quality wheat can only do so much, he added. In his view, more stringent standards will allow grain handlers to meet customer specifications and protect the value of Canada’s grading system. The alternative is that companies may have to specify test weight or foreign matter standards in their contracts.
Downgrades
Sask Wheat and APAS say farmers will bear the economic brunt of the decision.
In a document posted on the Sask Wheat website, the organization estimated that if about six per cent of wheat in Saskatchewan was downgraded at the elevator from No. 1 CWRS to No. 2 CWRS, the cost to that province’s wheat farmers would be about $880,000, “in the aggregate.”
If the same volume was downgraded from a No. 1 to No. 3, the hit to producers “could be over $5.2 million,” the organization added.
The two Saskatchewan groups said they repeatedly asked the CGC to delay the decision until an economic analysis could be done. They said the decision failed to consider a motion carried at the most recent Western Standards Committee meeting, which also asked for a study.
Reaction
In a June 8 letter to wheat industry stakeholders, CGC chief commissioner Doug Chorney said committee members were welcome to present additional information and analysis by Feb. 1, 2024.
“We realize that changes to standards can have economic implications, and that grain producers want to consider and better understand the impacts for the sector,” Chorney wrote.
Sobkowich said an accurate economic analysis would be difficult. Grain companies often upgrade for reasons other than quality — for instance, the ability to ‘blend up,’ or for customer relations, he said. These would be difficult to analyze.
Few other commodity or producer groups put out public statements on the matter. The Western Canadian Wheat Growers cautiously endorsed the new standards.
“While supportive of many of the changes, using the stringent export tolerances for test weights and total foreign matter at elevator driveways will be an area the Wheat Growers are watching,” president Gunter Jochum said in a June 22 news release.
It’s unclear how aligning the standards will benefit Canadian farmers, the release said, adding that it would be appropriate for the CGC to share any economic impact studies related to the matter.
The wheat growers added that the updated standards are founded on science-based outcomes.
Neither the Keystone Agricultural Producers nor Alberta Federation of Agriculture were available for comment as of press time.
