New wheat class casts doubt on future

The Canadian Grain Commission recently proposed creating a new class of lower quality milling wheat with the stated objective of protecting the integrity of the Canada Western Red Spring class.

However, the introduction of this new class may actually undermine CWRS wheat by facilitating the introduction of higher yielding, lower protein American hard red spring varieties.

Prairie wheat producers and others in the Canadian grain industry should give this development careful consideration. Will western grain farmers actually benefit from introducing a new class of lower quality milling wheat?

CWRS wheat has long enjoyed a well-earned reputation in the world marketplace as a premium quality milling wheat. It is in steady demand, almost always at a premium price, because of its versatility and ability to improve end-use quality in blends with lower quality wheat.

The integrity of Canadian wheat classes is protected by a grading system administered by the grain commission and a variety registration system which has, until recently, restricted commercial production of milling wheat varieties with lower quality outside the parameters of prescribed market classes.

The dissolution of the Canadian Wheat Board single desk, an oversupply from the bumper crop of 2013 and several years of adverse growing conditions that resulted in quality challenges have resulted in lower prices paid to prairie wheat producers.

In turn, end-use buyers have complained of erratic quality and in some cases have turned to alternative suppliers.

The introduction of a new class of milling wheat has the potential to further disrupt the Canadian wheat production and marketing system, which has well served the interests of producers and end users for decades.

Recent privatization of the grain commission’s system of grading export shipments and a lack of reserve capacity in the Canadian grain handling and transportation system have added to the problems.

Farmers are experiencing the freedom to market their CWRS wheat for lower returns than under the CWB single desk. Their resultant anger has been deliberately misdirected at the railways, a traditional scapegoat. Meanwhile, grain company profits are at record levels.

No one can blame prairie producers for their anger. They are producing a premium product and often earning a discounted price. Under these conditions, the opportunity to produce higher yielding American HRS varieties will be attractive to many in the short term.

Some of the outcomes are predictable:

  • The area planted to American HRS varieties on the Canadian Prairies will grow dramatically as long as higher quality CWRS varieties do not earn offsetting price premiums for growers.
  • Increased volumes of lower quality spring wheat because of wide-scale production of American HRS varieties will add to reserve capacity problems in the Canadian grain handling and transportation system.
  • Canadian seed companies with distribution rights for American HRS varieties will enjoy high sales and profits for several years.
  • A profusion of new spring wheat varieties will place pressure on the Canadian variety registration and provincial variety testing systems.
  • Canadian public sector wheat breeding programs will be at a significant disadvantage to American public sector and transnational private sector breeding programs, which currently focus on developing higher yielding American HRS wheat.

The introduction of a new marketing class of spring wheat is the next logical step if the ultimate objective is to dismantle the Canadian wheat system and replace it with a North American system dominated by transnational grain and crop life companies.

By doing so, Western Canada will sacrifice its international market niche supplying the highest quality milling wheat. In return, it will compete with American and other wheat growing regions that are much closer to port, have lower land and labour costs and better climates and whose ports are thousands of kilometres closer to end-use customers.

David Gehl is a former head of Agriculture Canada’s Seed Increase Unit.

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