LETHBRIDGE, Alta. – Buying Canadian wheat first is the goal of one domestic flour buyer in spite of regulations that he says inhibit competition.
Gordon Love, president of the Toronto-based firm GKL Commodities Inc., buys flour for 26 bakeries in North America. He wants to buy Canadian wheat because he believes it to be the best in the world.
Love and his customers want consistent quality flour at the lowest possible price. They call for a variety of wheats for different breads and bakery products including the huge North American frozen dough industry.
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Speaking at the recent winter wheat association meeting in Lethbridge, he explained the processors’ end of the grain business.
Canada uses about 2.4 million tonnes of wheat per year, or 10 percent of the domestic crop.
Surviving a bigger market
Grain for the domestic milling industry has been purchased at the world price since 1991 and so far, Canadian millers have been able to survive in the North American market. While Canadians hold their own, the situation could be better, Love said.
He wants to see an open futures market for food grade wheat that would make Canadian millers more competitive with their American counterparts.
Much of the pricing structure and supply barriers Love balks against stem from dealing with the Canadian Wheat Board. He said the board tends to forget the domestic user and has lost touch with consumers and producers of grain.
Users want a variety of wheats, proteins and quality depending on what they’re baking. They’d also like more choice of wheat varieties like those offered to millers in the United States.
In Canada there are 17 registered varieties available while in the United States there are hundreds of varieties for selection and blending.
For example, many processors liked the Grandin variety for its baking quality, especially for producing frozen dough. However, the board won’t allow its sale because it’s visually indistinguishable from another registered variety.
“The U.S. beats us in marketing with a poorer, inferior product. They know how to sell,” he said.
At the same time Love conceded Canadian flour is very consistent, partly because of grain variety control. However individual millers set a ceiling on how much they’re willing too pay and if it’s too expensive, they’ll say no. Further, farmers receive no premiums for top quality.
The board is not a failure however, because it has developed marketing expertise and it’s able to blend bad sales with good. It is difficult to sell wheat at the highest price all the time, said Love.
