A farmer says inaccuracies in grain grading and dockage determination could cost growers millions of dollars
A Saskatchewan farmer says prairie grain growers are at risk of losing big money — potentially hundreds of millions of dollars every year — because no one is asking tough questions about the way grain is graded and sold in Western Canada.
Grain growers across the West sell tens of millions of tonnes of grain to commercial buyers every year, says Jim Germain, a farmer and landowner from west-central Saskatchewan.
But hardly any farmers know the important details about how grain is graded or how dockage is properly calculated.
Even grain buyers at major elevator companies have only a limited knowledge of the procedures outlined in Canada’s Official Grain Grading Guide, a 500-page document that details all of the steps involved in grading Western Canada’s major crops and determining dockage, said Germain, a former grain buyer.
Formal training for grain graders and commercial grain buyers should be mandatory in Canada and should be offered by the Canadian Grain Commission, he added.
Provincial grain and oilseed commissions should also be lobbying on behalf of farmers to ensure that grain is being graded properly and that growers are receiving full value for the commodities they produce and sell.
“Something as simple as determining dockage in canola can make a huge difference in the value of a crop,” Germain said.
“I’ve seen (the proportion of) broken and small canola as high as three or four percent being taken as extra dockage because most elevator guys aren’t properly trained.
“It’s a complex scenario, determining dockage and grading, and it’s something that most guys don’t know how to do.”
Germain said the potential for economic losses stemming from improperly graded cereals and oilseeds varies greatly from year to year.
The potential for farmer losses is larger than normal this year, he added, because of variability in crop quality, inconsistent crop development and the potential for sprouting, staining and mildew in cereals.
For example, canola seed sizes are expected to be smaller than normal this year, meaning farmers could be forfeiting huge money if dockage is measured improperly.
Even if growers lose a quarter of one percent of their crop’s value, the economic losses could easily run into the tens of millions of dollars, he said.
In addition, many growers are reluctant to ask questions about grade and dockage because they don’t want to jeopardize relations with elevator agents.
“It’s a 100-year-old problem,” said Germain.
“Most guys won’t ask questions at the elevator because they don’t want to cause an issue. They’ll take the grade and dockage that they’re offered because they don’t want to cause a conflict or they don’t know the proper questions to ask.”
Growers who feel they were treated unfairly can request help from the grain commission. It offers a service known as Subject to Grain Inspector’s Grade and Dockage Determination.
If a producer disagrees with the grade or dockage assessment offered at an elevator, he can ask that a sample be taken and sent to the commission for an official determination.
However, the only way producers can take advantage of the service is to request that a sample be taken at the point of delivery, while the grain is being unloaded.
“It’s not the best system because half of the time, the farmer isn’t even in the elevator when the grain is getting dumped,” Germain said.
Daryl Beswitherick, the commission’s program manager for national inspection standards, said the grain commission typically receives 150 to 200 requests a year for a subject to grain inspector’s grade and dockage determination.
For a fee of $46.79 plus GST, the commission will assess grade, dockage, moisture content and protein.
Submitted samples must be recognized by both the buyer and the seller as being representative of the grain being sold.
Results are returned to the two parties and would presumably be used to determine the actual value of the grain being sold.
Beswitherick said there is currently no requirement for grain buyers to be trained or certified by the grain commission on the proper way to grade grain. Nor is the commission responsible for ensuring that grain companies are using proper grading procedures at primary elevators.
“There is no requirement for that,” he said.
“We provide the Official Grain Grading Guide with the correct procedures, but the grain companies are training their own staff and we’re not monitoring their work at the elevator to determine how they’re doing it or how accurately.
“The idea is that we have the subject to (Grain Inspector’s Grade and Dockage Determination service), and if a producer disagrees with the grade or dockage (at the elevator), they can ask for the CGC to determine the grade according to our official procedures … instead of us trying to monitor all of the grain company elevators.”
Beswitherick offered the following advice to grain growers who are concerned that they might not be getting a fair shake.
“My first comment would be to make sure you know what you have prior to delivering grain, whether that’s getting information through the harvest sample program, or sending a sample to one of our service centres or even going through a private third-party company to get a grade. That way you’ll know if you’re getting treated fairly or not.”
Sampling procedures can also be problematic.
For example, samples submitted to the harvest sample program can differ from samples submitted to the Subject to Grain Inspector’s Grade and Dockage Determination service.
Care must be taken to ensure that samples are collected accurately and that they’re representative of the grain being sold.
Most modern grain elevators use grain probes to draw a sample. But according to Germain, probe sampling does not necessarily result in a representative sample.
Ideally, samples should be hand drawn at regular intervals during the unload to ensure that the sample collected is an accurate representation of what’s being unloaded.
Probe samples can be used for resolving disputes, Beswitherick said, but only if the buyer and the seller agree that the sample is representative.
Proper procedures for probe sampling and hand sampling can be viewed on the grain commission’s website at bit.ly/2q09WjN.
“Producers need to be aware that proper sampling is the first step (in getting full value for their grain),” Beswitherick said.
In the United States, all commercial grain deliveries are sampled at the elevator and sent to the U.S. Department of Agriculture for an official grade determination.
The U.S. system means that growers do not necessarily receive payment for their grain at the time it’s delivered.
However, it ensures that grading is conducted by an unbiased third-party in a USDA lab rather than by the company that’s buying the grain.