Following is the viewpoint of McCann, a resident of Saskatoon.
Ever read the instructions on your bread maker and wonder why in the United States consumers must use flour that is specifically milled for bread, whereas in Canada you can use all-purpose flour?
Here's why: The Canadian wheat used in our all-purpose flour is highly regarded around the world for its consistency in terms of its milling and baking properties. Our quality control and quality assurance systems (QC & QA) are very difference from that of the U.S., and unique among major grain exporters.
Institutions such as the Canadian Food Inspection Agency (CFIA) oversee varietal registration. Before a variety can be registered for field production in Canada, it undergoes rigorous field and laboratory tests to ensure that it not only performs well in the field, but also meets specific criteria in terms of milling and baking properties.
In contrast, the U.S. operates under a commercial system in which varieties can be registered regardless of their milling and baking properties.
Another key institution involved in our QC & QA system is the Canadian Grain Commission, which oversees the grading, handling, and shipping of grain. Before a shipment of grain leaves port, the CGC issues a certificate that assures the customer that the shipment meets the specific grade, class, and quality parameters defined in the sales agreement. Customers of Canadian wheat can be certain that any two boatloads of wheat, with the same grade and class specifications, will be the same.
Why is this so important to wheat customers? Around the world, the milling and baking industries are moving toward greater automation. Increased automation means that millers typically set up their plants for large runs that often contain wheat from a number of shipments. If there is no quality consistency among shipments, additional testing and adjustments are required within the run, resulting in potential downtime or worse, inferior end products.
Canadian wheat shipments are rated very high for consistency of quality, and customers are willing to pay a premium for this assurance. In contrast, the U.S. system cannot deliver the same level of consistency, often resulting in U.S. wheat being discounted because of the lack of consistency among shipments.
In the event that problems do occur with Canadian wheat shipments, the Canadian International Grain Institute helps resolve any disputes through its role in customer service and market development. CIGI, with its lab and milling facilities in Winnipeg, works closely with our customers to trouble shoot problems and to develop new markets for Canadian grain.
Working together, these institutions have established Canadian wheat as a brand that is differentiated from other grain exporters on the basis of quality and consistency. Grain customers around the world are willing to pay a premium for our wheat.
The Canadian Wheat Board, through its single-desk marketing structure, is able to capture this premium and pass it on to farmers. Because the CWB is the only seller of Canadian wheat, it can charge different prices in different markets, often extracting a premium over the world price.
For example, Japan is one of Canada's biggest wheat customers, and Japanese buyers often pay as much as $1 per bushel over the world price for Canadian wheat. Why? They're paying the premium for the Canadian brand.
Minister Gerry Ritz's plans to dismantle the CWB, through the creation of a multiple sellers for Canadian wheat, will inevitably result in this premium being given to buyers in order to "make the sale." Buyers will be able to play off the Viterras of the world against one another and in doing so, negotiate a lower price on their grain purchase.
With the loss of the premium, it may be hard to justify maintaining a unique QC & QA system for Canadian wheat. Cargill, Viterra, and JRI certainly won't be supporting the system. Their business is largely based on volume, with the goal of maximizing shareholder value, not on obtaining the best price for Canadian farmers.
The grain companies would be better served by harmonizing the Canadian system with their U.S. operations, resulting in a reduction in the quality of Canadian wheat. Canadian farmers are very efficient in terms of growing wheat but the cost of getting our grain to port does not make us low-cost producers.
For this reason we need to maintain a system that produces a premium product and a marketing structure that can capture that premium. The CWB provides the structure needed to capture the premium necessary to maintain our Canadian wheat brand and in doing so, get the best return for farmers.
© Copyright (c) The StarPhoenix
Read more: http://www.thestarphoenix.com/Canada image quality wheat bound suffer/5310688/story.html#ixzz1WLUVi4G1
Ever read the instructions on your bread maker and wonder why in the United States consumers must use flour that is specifically milled for bread, whereas in Canada you can use all-purpose flour?
Here's why: The Canadian wheat used in our all-purpose flour is highly regarded around the world for its consistency in terms of its milling and baking properties. Our quality control and quality assurance systems (QC & QA) are very difference from that of the U.S., and unique among major grain exporters.
Institutions such as the Canadian Food Inspection Agency (CFIA) oversee varietal registration. Before a variety can be registered for field production in Canada, it undergoes rigorous field and laboratory tests to ensure that it not only performs well in the field, but also meets specific criteria in terms of milling and baking properties.
In contrast, the U.S. operates under a commercial system in which varieties can be registered regardless of their milling and baking properties.
Another key institution involved in our QC & QA system is the Canadian Grain Commission, which oversees the grading, handling, and shipping of grain. Before a shipment of grain leaves port, the CGC issues a certificate that assures the customer that the shipment meets the specific grade, class, and quality parameters defined in the sales agreement. Customers of Canadian wheat can be certain that any two boatloads of wheat, with the same grade and class specifications, will be the same.
Why is this so important to wheat customers? Around the world, the milling and baking industries are moving toward greater automation. Increased automation means that millers typically set up their plants for large runs that often contain wheat from a number of shipments. If there is no quality consistency among shipments, additional testing and adjustments are required within the run, resulting in potential downtime or worse, inferior end products.
Canadian wheat shipments are rated very high for consistency of quality, and customers are willing to pay a premium for this assurance. In contrast, the U.S. system cannot deliver the same level of consistency, often resulting in U.S. wheat being discounted because of the lack of consistency among shipments.
In the event that problems do occur with Canadian wheat shipments, the Canadian International Grain Institute helps resolve any disputes through its role in customer service and market development. CIGI, with its lab and milling facilities in Winnipeg, works closely with our customers to trouble shoot problems and to develop new markets for Canadian grain.
Working together, these institutions have established Canadian wheat as a brand that is differentiated from other grain exporters on the basis of quality and consistency. Grain customers around the world are willing to pay a premium for our wheat.
The Canadian Wheat Board, through its single-desk marketing structure, is able to capture this premium and pass it on to farmers. Because the CWB is the only seller of Canadian wheat, it can charge different prices in different markets, often extracting a premium over the world price.
For example, Japan is one of Canada's biggest wheat customers, and Japanese buyers often pay as much as $1 per bushel over the world price for Canadian wheat. Why? They're paying the premium for the Canadian brand.
Minister Gerry Ritz's plans to dismantle the CWB, through the creation of a multiple sellers for Canadian wheat, will inevitably result in this premium being given to buyers in order to "make the sale." Buyers will be able to play off the Viterras of the world against one another and in doing so, negotiate a lower price on their grain purchase.
With the loss of the premium, it may be hard to justify maintaining a unique QC & QA system for Canadian wheat. Cargill, Viterra, and JRI certainly won't be supporting the system. Their business is largely based on volume, with the goal of maximizing shareholder value, not on obtaining the best price for Canadian farmers.
The grain companies would be better served by harmonizing the Canadian system with their U.S. operations, resulting in a reduction in the quality of Canadian wheat. Canadian farmers are very efficient in terms of growing wheat but the cost of getting our grain to port does not make us low-cost producers.
For this reason we need to maintain a system that produces a premium product and a marketing structure that can capture that premium. The CWB provides the structure needed to capture the premium necessary to maintain our Canadian wheat brand and in doing so, get the best return for farmers.
© Copyright (c) The StarPhoenix
Read more: http://www.thestarphoenix.com/Canada image quality wheat bound suffer/5310688/story.html#ixzz1WLUVi4G1
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