Kernel Visual Distinguishability

[Vader]

Let's move the milling wheat system to one where everything is IP and get rid of the KVD system.

Dr. Fowler who breeds winter wheat has had the last 10 new varieties of winter wheat rejected because they failed the KVD requirements. ie. they looked like hard red spring wheat. Because of this they never made it to the functionality tests. These may have been the best milling and baking wheats ever. We will never know. They may have had the best agronomic package and they did have significant yield advantages.

If ethanol production using wheat is going to compete effectively with corn we need higher yielding wheats.

KVD has stood Canada in good stead for many years allowing us to deliver consistent quality at minimal cost. It is time to move on.

One major hurdle is the idea that we must grade everything on the driveway. The idea is to develop black box technology that will identify genetics in a five minute test. That technology may be five years away or it may be 25 years away. We can't wait.

We need to look at the Warburton contract where bin samples are submitted for lab analysis and grain with desirable attributes is selected for the contract. How hard would it be for those with good milling quality wheat to send samples off for testing immediately after harvest. Lab analysis could be used to determine falling numbers, gluten strength, water adsorption, ash content, hard vitreous kernel count, etc. etc.

If the grain is obviously not of milling quality it need not be submitted for analysis.

One of Canada's greatest advantages is the number of on farm storage segregations. American and Australian systems gather all the grain into huge unsegregated piles at harvest. We keep ours identity preserved.

Let's put milling wheat into it's own pool and contract for acres with a fixed price contract with an act of god clause. The rest of the wheat could go into its own pool or be sold into the domestic non-food market.

Let's figure out how this would work now and get on with it for the 06/07 crop year.

[Everest]

I agree with moving on from KVD.

Who or what is holding us back?

It seems to me we have WAY too much regulation in this business. Why can't an industrial processor sponsor or even pay for the breeding and registration of a wheat suitable for its purposes and sell the seed to farmers, maybe to go along with a production contract? Why can't a miller do the same? Or a glue factory? Or an exporter with a specific use off shore end user? Seems there is a lot of regulation in the way.....and regulators. I just want to grow my wheat crop and sell it to my best advantage. There is no need or value in anyone to telling me what I should or shouldn't do. What regulators and institutions do we need to punt?

[Incognito]

Vader:

Your quotes:

If ethanol production using wheat is going to compete effectively with corn we need higher yielding wheats.

Let's put milling wheat into it's own pool and contract for acres with a fixed price contract with an act of god clause. The rest of the wheat could go into its own pool or be sold into the domestic non-food market.

Unquote

Did the Chair of the CWB have a change of heart?

A news story from one year ago on CBC:

Quote:

"It's time Canadian farmers start asking some tough questions."

"Should we not think of providing a lower-quality grain to compete with these people, which is going to yield substantially better than red spring wheat," he says."

Ritter says that is not the way to make Canadian farmers more competitive.

Unquote

[Vader]

I think this is simply a reflection of people with inquiring minds looking for solutions to problems. This is the why society has a governance structure albeit not always viewed as successful or efficient.

Canada is competitive at the high end of the quality spectrum. At the low end we are not competitive in the export market against low quality wheats and we are not competitive domestically against high yielding corn.

The solution is to separate these two distinctly different markets, ie, the high quality milling wheat and everything else.

To increase competitiveness in the non-milling wheat market we need to substantially reduce our dependance on the export market. Once that move is contemplated then the next question is how to be more competitive with corn. The answer to that is higher yields and research into the feeding advantages of wheat.

The reason we are not moving ahead is because of the entrenchment of the KVD system throughout the system. This goes from the variety registration system to the Canada Grains Act, to the Canadian Grain Commission, to grain handlers and to the CWB. To throw this all away without a working alternative would be akin to jumping off a cruise ship without a life preserver.

I see the Warburton contract as the model for the life preserver. Customers who are willing to pay a premium are the secret to the success of this program. The CWB worked with this customer to design a system that adds value throughout the value chain from the producer through the processor and to the consumer. I believe that in the case of Canadian Branded milling wheat we already have the proof of the additional value. We need to work with the customers to encourage them to move to a Warburton type where end use functionality forms the basis of the contract. Then these premiums must flow back to the producer either in parallel to a pooling system as in the Warburton model or directly to the producer through a production contract where acres and price are agreed upon prior to seeding.

[Incognito]

Question on the Act of God clause.

How do you offset the risk?

How is the risk reflected in the initial PRO's?

[Vader]

Act of God would be desirable. Not sure how the risk would be managed. In a cash contracting system would be different than in a pooling system.

Obviously in a pooling system the PRO would have to reflect the risk. In a cash system if risk management is not available the Act of God might not be an option.

[charliep]

Just wanted to highlight the conference the Canadian Grain Commission is hosting on grain quality assurance systems. It is in Winnipeg June 27 to 30. It highlights the range of questions and alternative solutions the industry is looking at.

http://www.grainscanada.gc.ca/varietyid/conference05-e.htm