It’s becoming as predictable as a change in the season. Farm groups and politicians south of the border are once again accusing the Canadian Wheat Board of dumping grain into the United States market.
Durum is the focus of their discontent.
U.S. trade representative Charlene Barshefsky told Reuters News Agency, “We have worked closely with Canada and are disappointed with the current level of shipments in durum … . We’re actually rather shocked with the current level of shipments.”
North Dakota senator Kent Conrad told the news service, “I’ll bet anything that you find that what is really happening is they are dumping below cost in this market.”
Read Also
AI expected to make itself felt in food systems
Artificial intelligence is already transforming the food we eat, how farmers produce it and how it reaches the consumer, experts say
According to Canadian Grain Commission figures, the wheat board exported 655,700 tonnes of durum to the U.S. in the 1998-99 crop year. That’s up 53 percent from the 427,800 tonnes shipped the previous crop year and more than twice the amount exported 10 years ago.
“We had a first-class product available and lots of it,” said CWB spokesperson Jim Pietryk.
He said last year’s durum crop was one of the largest on record and most of it ended up in the top two grades with good protein levels.
But there was also a large, good quality crop produced south of the border. It was the largest U.S. harvest since 1982, combined with the highest carryover stocks since 1992. So why are American millers buying so much Canadian durum?
Pietryk attributes it to the quality and consistency of the Canadian supply. He said Canada has a strict grading system that allows the board to meet the exact specifications of mills.
“If a particular mill is ordering
No. 1 Canadian western amber durum 14 percent, he is virtually guaranteed that everything going to him will meet that specification in the contract.”
That’s a key selling feature because it makes the plants more efficient.
“They don’t have to adjust the milling specifications and they know they’re going to get a certain extraction rate.”
Pietryk said claims that the board is dumping grain are unfounded. The board has weathered seven U.S. challenges based on similar claims and has been given “a clean bill of health” each and every time.
“It’s election year,” said Pietryk.
“If prices were high and farmers were having a large positive margin, there would be less pressure on the politicians to do something.”
The president of the U.S. Durum Growers Association does not believe Pietryk’s quality and consistency claims.
Mark Birdsall said between 70 and 80 percent of last year’s crop in the U.S. made the top milling grade.
“We think it’s more price than quality,” he said.
Birdsall isn’t sure whether the wheat board is undercutting American producers or whether Canadian durum is more attractive because U.S. mills can lock in a price with the board, something they have difficulty doing with individual farmers.
Survey planned
He said they will survey U.S. millers to determine why they are buying Canadian durum instead of American product. Last year, Canadian durum imports accounted for 20 percent of what the U.S. mills consumed, said Birdsall.
“That’s a pretty hefty market penetration and we just can’t live with that.”
Birdsall isn’t sure whether the results of the survey could lead to another investigation into the practices of the wheat board. The survey should be completed within the next two weeks.
