Last issue I disputed the marketing ability of most Canadian grain producers. I argued that what most farmers, advisers, and the agriculture industry overall calls marketing is simply price taking, so it is not true marketing. That is not to say, though, that there aren’t farmers who are true marketers. Here are the thoughts of four farmers who have actually participated in marketing Canadian wheat.
Each of these farmers was a member of a Team Canada mission. The Team Canada approach to marketing wheat is a joint undertaking of the Canadian Grain Commission, the Canadian International Grains Institute, and Cereals Canada. It was instituted to fill the void that occurred when the Canadian Wheat Board lost its monopoly of its role as the primary marketing agency of Prairie wheat.
Each mission had representatives of the CGC who would describe the varieties, grades, and quality of wheat grown and in storage in Western Canada. Cigi representatives would provide technical details on using that wheat in milling and baking. And an actual wheat grower travelled with each mission to provide the millers and bakers with information on the farming practices used in Western Canada to grow wheat.
- More with Gerald Pilger on Country Guide: More to grain marketing than price
That wheat grower would answer buyer questions, including questions on the environmental friendliness and sustainability of Canadian farming practices. Most importantly, that grower received feedback directly from the buyers of Canadian wheat, and was able to hear first hand what wheat buyers like, dislike, and desire in Canadian wheat.
An actual producer is the best person to evaluate this key market intelligence and disseminate it back to Prairie wheat growers. The information these farmers are bringing back is invaluable. Applying the information learned by these farmers to your own operation is likely the most important marketing move you will adopt this year.
Key Learning: Consider the buyer’s needs when selecting a wheat variety to grow
Kevin Bender farms in west-central Alberta. He was part of the Team Canada mission to Italy, Germany and England.
Bender says: “The purpose of the mission was to promote Canadian HRS and durum wheat. It was also for relationship building with European buyers.
“I was more convinced as time went on of the value of the trip. It is a necessity to do this. Americans spend several times more than we do on selling their wheat. We have to make these trips to stay in the market.”
Bender notes that these trips also provide Canadian producers and exporters the opportunity to hear any concerns the buyers may have about Canadian wheat. And he heard first hand of three concerns European buyers have about Canadian wheat shipments they have accepted over the past few years.
Buyers spoke of trace levels of soy in wheat. Bender noted the levels are very low, i.e. five to 20 ppm. Bender believes the buyers are concerned because soy could be seen as an allergen.
Buyers were also concerned with the potential for mycotoxins and fusarium in shipments.
But buyers’ biggest concern was the declining gluten strength of Canadian wheat. Italian buyers report an erosion over the past five years. Bender notes that gluten strength is partially related to growing conditions. Gluten strength also varies by variety. Harvest, Lillian, and Unity are varieties favoured by farmers because of their agronomic performance. However, they are not the varieties of choice for bakers because of their lower gluten strength.
On a positive note, Bender reports gluten strength was better this year. And he encourages growers to select high-gluten-strength varieties for planting in 2015.
Finally, Bender felt buyers really appreciated the presence of a farmer at the meetings. “They liked to see and hear about the origins of the wheat they were buying.” He also felt they liked that he would be taking their concerns back to Canadian growers.
Bender feels strongly that all sectors of the grains industry have to work together if we are to successfully sell our wheat in the world market.
Key Learning: Quality is critical
Greg Porozni, a farmer from east-central Alberta spoke to buyers in Morocco, Algeria, Tunis and Dubai.
“The purpose of the mission to these countries was to sell Canadian wheat, to increase our market share, and to ensure buyers in these countries are satisfied with our wheat. The Team Canada approach lets the buyers meet with every sector of the value chain,” explains Porozni.
Porozni found buyers were really happy that a producer was along on the mission. He said they were very interested to learn about direct seeding, the care Prairie farmers take with inputs, and how farmers are practising due diligence and sustainable farming practices.
Equally important though was the work being done on farmers’ behalf by groups like Cereals Canada, the CGC and Cigi. To illustrate this point Porozni noted how weather downgraded a lot of durum this year. However, Cigi was able to provide the technical testing to show that processors could blend as much as 70 to 80 per cent of No. 3 Canadian durum with No. 1 Canadian durum without impacting the colour or quality of the end product.
“We need to promote Canadian wheat,” says Porozni. “The CWB did a great job of building relationships and trust with buyers. We have to continue and build on those relationships. If we do not do it someone else will. The U.S. and Australia are already doing it.
“Quality is different every year so it is so important to have an organization like Cigi,” believes Porozni. “North African countries buy Canadian durum because of our quality. We can never lose quality because if we do, we lose markets.”
Key Learning: Information and relationships are vital
Randy Johner of southern Saskatchewan made stops in Singapore, Malaysia, Vietnam, Thailand, and the Philippines with Team Canada.
“Our job was to tell our customers what our crops were like” says Johner. “The customer needs to know this. Our competitors, the United States, and Australia, are already doing this. We need to do it better.”
Johner believes when the CWB was the marketing agency for Canadian wheat, the CWB had the quantity,
quality and technical information at their fingertips and could provide the information that buyers wanted. But he feels this changed with the privatization of the CWB, and that private traders likely do not have the information the CWB had.
Johner found the Team Canada meetings are so important to buyers that there would be 50 to 70 people at a meeting to hear about the Canadian crop. Johner notes these people are buying huge amounts of our wheat, i.e. 50,000-tonne shipments, so it is critical that we present the information they are looking for. That is why it is so important that farmers support agencies like Cigi.
Unfortunately, Johner says surveys show only about one-third of farmers know what Cigi does and how it benefits farmers. Johner says all farmers need to hear about the value of Cigi.
According to Johner, he received a very warm reception at all meetings he spoke at. “I told the buyers of the four generations who have worked our family farm. I reassured the audience that farmers in Canada produce clean, safe food. I told them how our long cold winters minimized disease and insect problems and enable us to store grain without spoilage.
“What really stood out for me was these buyers were people like me,” Johner says. “They were warm and friendly, and really wanted to know about our farms in Canada. They were very accommodating.”
Johner believes we must have good communication all the way up the value chain, from seed growers to growers, to exporter, to trader, to buyer.
Key Learning: It’s all about the brand
Lynn Jacobson, a farmer from southeastern Alberta travelled to China, Korea, and Japan. He was representing Canadian farmers in what may be our most important markets. His findings were both a good and bad story.
“Over the last few years, no one had been branding Canadian wheat. Canadians had not been making visits to millers and they were not happy about this. You cannot sell wheat with just a phone call, and Skype is not a face-to-face meeting. You have to develop a relationship with your buyers.”
Jacobson pointed out U.S. Wheat Associates, the Australians and the Russians are meeting with Asian buyers regularly, and we have to go there too if we are to compete in those markets.”
Jacobson reports Asian buyers are also concerned with declining quality of Canadian wheat. “Millers are now complaining about the quality of Canadian wheat. The only advantage Canada has is our wheat’s quality. If we ever go away from quality, we will lose markets. If we don’t have quality, even the U.S. market will disappear. We will become a residual seller of wheat if we do not supply what the customer wants.”
As an example, Jacobson notes that buyers have been concerned about the gluten strength of our wheat for the last few years. He says gluten strength varies between varieties, and that some of the most popular varieties we grow have low gluten strength. Yet we continue to grow these varieties because of their agronomics and high yields.
On the positive side, the buyers he visited with were very happy with the new Team Canada approach and they were happy that Canada is back in the business of actively marketing wheat. He found they liked a farmer to receive their feedback. They hope the Team Canada approach will deliver their feedback back to growers in Canada.
Jacobson learned first hand that what wheat buyers and the world wants from Canadian growers is top-quality wheat. “We are the best source of high-quality wheat, but the Australians are catching up and Kazakhstan can grow high-quality wheat; it is their lack of infrastructure that is hindering their sales. If we ever go away from quality, we will lose our markets.”