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How to market low falling number wheat

Know what you have and start talking to buyers about what they need

Know the quality of your crop, including the falling number of wheat, and start talking to buyers.

That’s the advice commodity groups and grain companies have for farmers as they struggle to finish the harvest from hell and try to sell what’s in the bin, including wheat with widely varying falling numbers across the Prairies.

Farmers can get a free falling number measurement by submitting samples to the Canadian Grain Commission (CGC) through its annual harvest sample program.

Because of the late harvest, and issues with low falling number, the CGC has extended the program registration period deadline to Nov. 30. Registered farmers then will have until Dec. 31 to submit samples.

“Talk to your buyer sooner than later so you know what their requirements are so you can plan accordingly,” Manitoba Wheat and Barley Growers Association (MWBGA) general manager Pam de Rocquigny said in an interview Nov. 13. “If you do have high-quality wheat make sure you know what the quality is so you can extract as much from the marketplace as you can because there is high-quality wheat out there.”

John Peterson, vice-president of wheat merchandising and hedging at James Richardson International Ltd. (JRI) agrees.

“We have a process in place to try and manage the flow from the farmer to end-use customer,” he said in an interview Nov. 14.

Why it matters: If farmers know the quality of their crop they can work with buyers to optimize returns and logistics.

Rains during harvest across the Prairies have resulted in one of the worst years in recent memory for sprout damage and low falling number.

And since sprout damage is up, falling numbers are down and companies have different approaches to handling it, there’s more confusion among farmers.

Both de Rocquigny and Doug Chorney, the CGC’s assistant chief commissioner, are urging farmers to take good representative samples before getting their wheat falling number tested.

The normal error is plus or minus 30 seconds, Chorney said in an interview Nov. 14.

“You can have a wheat that is in the 280 (second) range,” he said. “You could test that representative sample again and it could be anything from 250 to 310. That’s a big difference when the cut-off is 300 for some companies, 320 or whatever.”

Both also warn blending to try and improve falling number is complicated.

“One or two kernels can have an impact on the test,” de Rocquigny warned. “It’s not a straightforward process. We’re still encouraging producers to try not to blend it themselves and keep your high-quality wheat binned separately from lower-quality wheat.”

JRI is doing a falling number test on all wheat before buying it this year, Peterson said.

“Then we work with the farmer to manage the stocks,” he said. “We also have a minimum falling number in our contract… ”

Much of the confusion is because sprouting, which is a proxy for falling number, is a grade factor and falling number, which is a proxy for assessing the release of the enzyme alpha-amylase, is not a grading factor, but can result in lower prices no matter what the grade.

Alpha-amylase breaks down wheat starch in the kernel into sugars so that the germinating kernel has an energy source. Sound grain has minimal enzyme levels.

The falling number test, usually done in a laboratory, measures the time a plunger drops through a slurry of water and wheat flour. The more alpha-amylase the less viscous the slurry and the faster the plunger falls resulting in a lower falling number.

Less alpha-amylase makes the slurry thicker and the plunger falls more slowly resulting in a higher falling number. A higher number indicates the flour is better for bread making.

Complicating matters this year is that some wheat isn’t being downgraded for sprout damage, but farmers are getting paid less than one might expect given the grade.

Some farmers are wondering if it’s a case of ‘heads, they lose, tails, the elevator company wins.’

But de Rocquigny says grade and price are not the same.

The CGC doesn’t deal with grain prices, but as a farmer Chorney noted supply and demand affects prices. Years when protein wheat is short, grain companies often pay protein premiums. It’s possible that some buyers will pay more for wheat downgraded for sprout damage if the falling number is good, he said.

“That would be a potential example of a win win,” Chorney said. “I know the industry works very well to manage that.”

Peterson also thinks that can happen.

“I think that the industry is motivated to show value to the farmer,” he said. “In a year when you are short falling number… the industry will show value where there is value. So if a farmer happens to have a No. 3 red for some specification, say mildew, but the falling number is excellent, it wouldn’t surprise me that someone saw value in that and behaved accordingly.

“But that doesn’t mean all of a sudden there is this huge premium market for every farmer who has 400 falling number.”

Falling number is not the only specification determining the value of wheat, de Rocquigny said. There’s a long list of items from protein content to insect damage that affect how much a buyer will pay.

In March the CGC asked the grain industry for its views on making falling number and DON (deoxynivalenol) grading factors. The CGC said if they were it could arbitrate disputes between farmers and buyers on those items.

Several years ago the Alberta Wheat Commission lobbied for such a change, arguing falling number was a more objective measure than sprout damage. But since then it has questioned whether the benefit would justify the extra cost.

The MWBGA wants that question answered too.

The Western Grain Elevator Association has concluded since falling number is only occasionally a major problem the benefits aren’t worth it.

“This is a notion that doing a falling number test will unlock a whole bunch of value to the farmer and that’s just simply not the case,” WGEA executive director Wade Sobkowich said in an interview Nov. 12. “There is no more value to be had for the grain we sell because we already sell it based on falling number.

“There’s no new money so it’s just a matter of how far down the road do we want to go to determining how it’s distributed.”

The CGC has consulted with its grain standard committees on submissions made on the proposed changes, Chorney said.

The CGC expects to release its findings later this month, after the federal agriculture minister is sworn in.

According to industry sources the CGC has decided not to make falling number and DON grading factors.

About the author

Reporter

Allan Dawson is a reporter with the Manitoba Co-operator based near Miami, Man. Covering agriculture since 1980, Dawson has spent most of his career with the Co-operator except for several years with Farmers’ Independent Weekly and before that a Morden-Winkler area radio station.

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