Cross-border sales challenges | Canadian and U.S. groups develop website to help farmers market in new environment
Crossing the American border with a load of wheat has got a lot easier for western Canadian farmers who want to sell their grain in the United States.
But prairie producers who plan to deliver grain to a U.S. buyer should still do their homework before they show up at an international border crossing.
Export licences are no longer needed for Canadian wheat, durum and barley sold in the U.S., but other paperwork is required.
Richard Phillips, executive director of Grain Growers of Canada, said Canadian growers should also get themselves up to speed on important issues that could affect a commercial grain sale south of the border.
Those issues include differences between Canadian and U.S. grading systems, producer checkoffs, trucking regulations, bonding requirements for American grain dealers, payment protection programs and U.S. testing and sampling procedures for moisture, protein and dockage.
“It’s kind of surprising how much stuff there is to know about moving grain (from Canada to the U.S.),” Phillips said.
Questions about cross-border grain sales have been increasing since the federal government passed legislation last year ending the CWB’s single desk marketing system.
The Marketing Freedom for Grain Farmers Act took effect Aug. 1, clearing the way for Canadian producers to sell wheat, durum and barley south of the border.
American farmers will also have access to the Canadian grain market.
Grain Growers of Canada, along with the Canada Grains Council, U.S. Wheat Associates and the North American Grain Export Association, recently launched a new website, canada-usgrainandseedtrade.info, containing information about the cross-border grain trade.
“The site will help producers better understand how to navigate through these changes and market their grain across the border,” said Phillips.
“The information on this site will help producers … understand market differences,” added Shannon Schlecht, director of policy with U.S. Wheat Associates.
“Key questions are answered for U.S. and Canadian producers, including how to find a buyer, how wheat will be graded and requirements for crossing the border.”
Phillips said it remains to be seen how much grain will be moved across the border by individual producers.
“I think farmers on both sides of the border will be taking samples across the line and kicking tires a lot,” he said.
“At the end of the day, I’m not so sure that much grain will actually go over but at least the opportunity is there.”
Western Canadian farmers also have new domestic sales opportunities with Canadian-based malting plants and flour mills, he added.
“I think a lot of farmers are looking domestically first before they look at selling south of the line.”
Curtis Hiebert, a grain producer from Sperling, Man., said one issue that still needs to be addressed is the production and sale of U.S. wheat varieties that are not registered in Western Canada.
Hiebert acquired U.S. wheat seed and planted small amounts of American hard red spring wheat varieties on his farm this year. They yielded 10 to 15 percent higher than popular Canadian varieties and had comparable protein content, he said.
Acreage of U.S. wheat varieties could increase significantly in southern Manitoba, but many growers are unclear about the legality of acquiring U.S. seed for commercial production and selling U.S. varieties north of the border.
The Canada Seeds Act prohibits the import of non-registered seed varieties from the U.S. for commercial production and sale in Western Canada.
Hiebert said marketing opportunities are also problematic for Canadian farmers who grow U.S. wheat.
To be graded as a Canadian class of wheat or barley, the variety being produced must be on a variety designation list maintained by the Canadian Grain Commission.
According to the commission, farmers who deliver an unregistered variety of wheat or barley to a Canadian elevator must declare their grain as an unregistered variety and sell it as feed.
However, Canadian grain companies are permitted to negotiate a contract based on quality specifications outside of the CGC’s statutory grading system, regardless of the variety.
Phillips said there may be potential for Canadian growers to grow legally acquired U.S. varieties and sell the grain to Canadian elevator companies under U.S. grade specifications.