U.S. wheat growers are pleased that Canada’s Bill C-48 will make the open market for wheat a little more open.
The proposed legislation to modernize the Canada Grain Act was introduced into the House of Commons Dec. 9.
One of the legislative changes contained in the bill would make it possible for U.S. growers to receive a grade on wheat they ship north of the border as long as it is a variety registered in Canada.
Under existing laws, U.S. wheat delivered to a Canadian grain elevator automatically receives a feed grade or the lowest grade available.
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The amendment in Bill C-48 says U.S. grain would be assigned a grade “constituting the highest level of excellence for which the grain is eligible.”
“That would be a major change from what we have today, where it currently receives the lowest grade possible,” said Shannon Schlecht, vice-president of policy with U.S. Wheat Associates.
The grain would be identified as imported grain. Commingled grain would be identified as “mixed Canadian and imported grain.”
The catch is that only varieties registered for use in Canada would be eligible to receive a grade, and not many of those varieties are grown in the United States.
The U.S. has no government oversight on the release of new varieties into the system. Plant breeders simply publish their trial results and growers decide if they want to buy the variety.
Schlecht said Glenn is one variety that could start moving north to elevators in Canada if Bill C-48 is approved. It is the fifth most popular spring wheat grown in North Dakota, accounting for 8.2 percent of the state’s spring wheat acres in 2014.
However, most wheat varieties grown in the U.S. have never been registered in Canada because of Canada’s lengthy variety registration process, which takes a minimum of three years.
“Regardless of its functional quality or its physical quality, it’s all just based on what the variety name is. We see that as a market access issue,” he said.
Schlecht said the Canadian Food Inspection Agency is working on modernizing the variety registration system. U.S. Wheat Associates has submitted its suggestions on how the system could be reformed to make it less onerous for U.S. wheat to receive a grade.
He doesn’t expect Canadian grain elevators to be flooded with U.S. wheat until Bill C-48 passes and steps are taken to modernize Canada’s variety registration system.
“The highest (annual exports) I’ve ever seen is maybe around 90,000 tonnes versus well over two million tonnes, probably, that comes south from Canada into the U.S.,” said Schlecht.
The U.S. shipped 33,832 tonnes of wheat to Canada between January and November of last year. Canada sent 2.5 million tonnes the other way over the same period.
