Sask Wheat calls for the CGC to reverse decision to align wheat primary tolerances with tighter export tolerances for test weight and total foreign material
The Canadian Grain Commission (CGC) recently announced that longstanding separate primary and export standards for test weight and total foreign material for most Western Canadian wheat classes will be aligned/harmonized at the tighter export tolerances, effective August 1, 2023. Key wheat industry stakeholders were notified of the decision through a letter from CGC Chief Commissioner Doug Chorney on June 8, followed by a public news release on June 13.
Producers will bear the cost of this harmonization while grain handling companies stand to benefit.
The current separate primary and export standards recognize that blending and cleaning throughout the grain handling system naturally and economically improve grain quality. Existing CGC cargo monitoring data shows that average test weight on export cargoes well exceed export tolerances under the current system. Producers, however, do not have the same ability to blend and improve grain quality.
Please note that all test weights expressed in pounds per bushel are expressed in pounds per Avery bushel and are sourced from the Canadian Grain Commission’s (CGC) test weight calculator found HERE. More information regarding bushel weights from the CGC can be found HERE.)
Producers will potentially face significant quality downgrades and lower prices at primary elevators with these higher standards. What might test weight harmonization mean for you as a wheat producer?
Grain companies will be able to purchase some grain at lower grades than before, yet through the process of blending and cleaning, will be able to include that grain in higher grade and value shipments. Producers will face potential negative direct economic impacts due to the harmonization of primary and export tolerances.
Test weight is of particular concern. With a primary standard tightened to export standard, CWRS wheat that previously would have graded a #1 could be downgraded to as low as feed if test weight is the determining grade factor.
Example: CWRS wheat weighing between 60.1 and 60.9 lbs/bushel currently meets the primary minimum test weight tolerance for #1. With higher test weight minimums for each grade, wheat from 60.1 to 60.9 lbs/bushel will no longer meet the #3 CWRS test weight minimum of 61 lbs/bushel, relegating it to feed.
Please note that all test weights expressed in pounds per bushel are expressed in pounds per Avery bushel and are sourced from the Canadian Grain Commission’s (CGC) test weight calculator found HERE. More information regarding bushel weights from the CGC can be found HERE.)
The CGC has decided to proceed with harmonization despite strong and consistent opposition from producer members of the CGC’s Western Standards Committee and the Wheat Advisory Committee. A motion carried at the most recent Western Standards Committee meeting recommended that the CGC Commissioners delay any changes until an economic impact assessment is completed and further considered by the Western Standards Committee.
The CGC has delayed harmonizing test weight in durum and has invited further analysis from producer groups, but the CGC refuses to do its own economic analysis and has repeatedly indicated its commitment to harmonizing all differing primary and export standards. Even though Sask Wheat believes that economic analysis is fundamental and the CGC’s responsibility, Sask Wheat commissioned its own preliminary study by Ward Weisensel that provides a framework evaluating the economic and marketing impacts of harmonization.
Sask Wheat calls on the CGC Commissioners to reverse the decision to proceed on harmonization of test weight and total foreign material at export standards on August 1, 2023, and not proceed with any further harmonization until the CGC has undertaken and completed economic analysis that supports such a change from the perspective of its mandate to work in the interest of grain producers.
More detailed information on Harmonization can be found here.