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Better than meets the eye?

Canada’s quality-control system still has a lot of support, but some are calling for grades to be determined by machines, not the human eye

Is that No. 2 CWRS just as good for milling and baking as a No. 1? Or does that No. 1 CWRS have some quality damage that can’t be seen with the naked eye, making it no better than a No. 2?

The answer could be yes in both cases, sometimes, in cases that might be better determined if grain was graded by a scientific test rather than visual inspection.

Some farm groups, suspecting that elevator companies are reselling farmers’ grain at a premium over official grades, are asking for technical tests to be part of the grading system. But elevator companies say the cost of the equipment and the need to add extra bin space may not make the change worthwhile.

The two main factors in question are falling number and fusarium damage. Sprouting can trigger an enzyme called alpha amylase, which reduces the ability of bread dough to hold gas and rise. The current grading system uses visual sprout damage as an indicator of alpha amylase level. However, it can be tested by mixing a slurry of water and flour in a tube and timing how long it takes a plunger to fall in the tube — hence the term “falling number.”

The other factor is the level of deoxynivalenol (DON), a toxic substance which can be triggered by fusarium head blight. If FHB can be seen in the sample, it’s assumed to have DON, though it may not.

In 2005, the Canadian Wheat Board proposed falling number become an official grading factor instead of sprout damage, and more recently the Western Canadian Wheat Growers and Alberta Wheat Commission have called for grades to be based on technical rather than visual specifications.

“We’re making the case that we would like to see a system that more accurately reflects what the grain is worth,” says AWC general manager Tom Steve. “Sometimes the market evolves faster than the regulators. In this case, we’ve got grain companies that are doing falling number tests in the country, and that’s gotten out ahead of the grading system.”

Western Grain Elevator Association executive director Wade Sobkowich says that some companies have elevators equipped to test for falling number and DON, strategically placing them, depending on the prevalence of problems in the region and on the year and harvest quality. While some facilities tested last year, there is little or no testing of this year’s high-quality crop.

“However, it is important to note that in the places where the capability exists, the elevator does not perform DON or FN testing on direct grain deliveries from growers in the vast majority of cases. In other words, they don’t run FN and DON ‘driveway tests’ on inbound product unless something is very much out of the ordinary,” Sobkowich said in an email.

“Last year, elevators with this capability would typically test full bin composite samples. Elevator companies still buy according to established grade specifications.”

Steve says that since the end of the Canadian Wheat Board monopoly, what makes wheat a No. 1 or No. 2 has become more variable, dependent on what the customer wants on a given day.

However, Dustin Gabor, owner of Grain Shark, a market advisory service, says that for CWRS wheat, the reference grade is still considered No. 1, 13.5 per cent, and the premiums and discounts come after grade has been determined.

Kostal Ag Consulting owner Greg Kostal adds that most elevator buying still emphasizes the Canadian Grain Commission’s numbers-based grading system, but he notes the industry is moving to a hybrid where users seek specific attributes within that CGC grade.

“It depends on the commodity, Prairie location and user,” Kostal says.

Review underway

The CGC has announced a major review of the grain grading system, a move that was welcomed by the Western Canadian Wheat Growers Association, which called for the system to include specifications.

“If the eventual grain buyer is paying based on specifications, why shouldn’t farmers get paid based on the same specifications?” Western Canadian Wheat Growers Association director Daryl Fransoo said in a release.

AWC’s Steve said there were cases last year when elevators bought feed wheat at a minimum falling number, which he believes revealed their intention to sell it to end-users as milling quality.

“What we’re saying to farmers is you need to know all of the factors in your sample of wheat to know what it’s worth. And the number-based grading system doesn’t always tell you what that value is,” Steve says, comparing grading methodology to umpires’ strike zones. “I know of many farmers who will take the same sample to multiple companies and get different grades, and that’s because the inspectors all have a different view.”

Falling number was a more important issue for the 2016 crop, much of which was hit with moisture at harvest. This year’s better quality is likely to be blended with remnants of last year’s crop.

“Blending is prevalent, but farmers still need to know what they have and how to extract and maximize attributes in context of how it is being bought,” Kostal says.

This year’s crop came with its own challenges given depressed yields and low protein.

Errol Anderson, president of ProMarket Communications, says a global surplus of wheat supplies has moved the market toward a protein-led pricing system. That’s good for farmers with 13.5 to 15 per cent protein, but those with 11.5 or lower are receiving heavy discounts, he says.

Gabor agrees, saying a farmer with No. 1 CWRS, 12.0 protein had been seeing up to $1.50 per bushel discounts from reference grade this year, a difference of over $1 per bushel from last year.

Single standard

Steve says that while hoping for a change, the AWC supports a third-party grading standard.

“Farmers need an independent regulatory agency to ensure that the standards are being consistently applied. The more accuracy we can have in how that wheat is evaluated, the better,” he says.

“I don’t think this process is talking about eliminating the grading system in Canada altogether, but it’s talking about evolving it to more of a technologically driven, objective analysis.”

Whatever the basis, there’s strong support for a independent third-party grading system, which would not only underpin Canada’s good reputation with customers, but allow efficiency in the bulk-handling system.

In an earlier interview with the Manitoba Co-operator, the WGEA’s Sobkowich said the system also helps farmers.

“We like the grading system because it allows us to buy in an organized way. It allows us to give the farmer a grade at the time of delivery. And it allows us to keep various quality parameters segregated in a bulk-handling system. So that works for us. But we’re open minded about the future of the grading system.”

Changes to grading won’t result in a net gain in farmer revenue, he added.

“This is a zero-sum game,” Sobkowich said.

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