It’s a difficult year to be a grain buyer. Due to bleaching, sprouting, disease and frost, grades are all over the map and a lot of the grading factors are open to human interpretation.
The grading standards sound objective. For instance, No. 1 canola may contain up to two per cent distinctly green seeds and a maximum of five per cent damaged seed, including green. The allowable limit for No. 2 is six per cent distinctly green and 12 per cent total damage. On No. 3, it’s 20 per cent distinctly green and 25 per cent total damage. Anything more than that is sample grade.
While rolling out canola seeds and checking for green count has been common practice for decades, disputes still arise over what constitutes distinctly green.
There are probably fewer grading issues with canola than with many other grains and the price discount isn’t very large between a No. 1 and No. 2. But the canolagrading information illustrates the difficulty with grading factors. So much is subjective.
When is a wheat kernel sprouted? When is a lentil seed diseased? When is a barley seed discoloured?
There has been a great deal of anguish over lentil-grading standards. In fact, there was a recent meeting between industry and the Canadian Grain Commission to sort out some difficulties on how red lentils are being graded.
The latest Pulse Market Report from Saskatchewan Pulse Growers has a couple of very different opinions on whether producers should be holding lentils for higher prices or selling them before prices go down.
Mark Tycholiz from the special crops brokerage company TradeMark Grain does not believe lentils prices are going to weaken. He points to all the lentils that are going to be unusable for anything but livestock feed – perhaps 15 per cent of the crop.
Tycholiz also points out that there’s been dramatic upward movement in the entire grain complex. His conclusion is that there’s lots of time to market lentils.
Martin Chidwick of Bissma Pacific has a different view. Chidwick says you won’t want low quality around your neck come next summer. His advice is to look at the bottom line and not get too greedy.
Buyers are often able to blend grain to come up with an improved grade while processors can use gravity tables, cleaners and colour sorters to achieve an improved result. However, you can’t make a silk purse out of a sow’s ear. This year, the quality problems are so pervasive that buyers and processors are likely to have more limitations on what they can achieve.
There’s a viewpoint among producers that buyers always benefit from the downgrading – that they sell grains, oilseeds and specialty crops at a higher grade than what they buy from farmers.
Due to the competitive nature of the business, this benefit is usually limited. In fact, buyers can easily be offside on the grade of the product they’re shipping and it can cost them a lot of money.
This year, a lot of business is likely to be done based on sending end-use customers representative samples so they can see and test exactly what they’re buying.
For producers, the best advice is to have lots of accurate samples of what’s in each bin. Show those samples to reputable buyers to see what they can do with it. Buyers and brokers are inundated with samples this fall so it may take awhile for producers to find their best marketing options.
Kevin Hursh is a consulting agrologist and farmer based in
Saskatoon. He can be reached at [email protected]