Alberta wheat producers need to start preparing this fall for next year’s Canadian wheat class changes.
“When some farmers plant their wheat in the spring, it will be Canadian Western Red Spring, and when they harvest it, it will be in the new class,” said Brian Kennedy, grower relations and extension co-ordinator at Alberta Wheat.
“If farmers are contracting their crop in the spring, they need to be aware that, that variety may change classes between when they sign the contract and when they deliver it.
“That’s something that they really need to be aware of because there are some price indicators for the new class coming out of Manitoba that put the market value closer to CPS than CWRS.”
The Canadian Grain Commission began ‘modernizing’ its wheat classes last year following complaints from international end-users about gluten strength in certain Canadian wheat varieties.
“The Canadian Grain Commission decided that those varieties needed to be removed from the CWRS class, but they are still really good varieties and they do have excellent milling characteristics,” said Kennedy. “For some buyers, that’s exactly what they’re looking for.
“Moving them into that new class gives the foreign buyers the opportunity to access those varieties and western Canadian growers the opportunity to grow them.”
In 2016, the grain commission added a new wheat class — Canada Northern Hard Red (CNHR). American Dark Northern Spring varieties Faller, Prosper, and Elgin ND moved to that new class. And on Aug. 1, 2018, 25 CWRS (including popular varieties Harvest, Lillian, and Unity) and four CPS (including Foremost) will move to the new class. The grain commission had initially planned to move them in 2017, but delayed it a year to give the industry more time to adjust.
“It doesn’t mean your variety is going away, but it may be in a different class, and that class is probably going to have a different pricing structure,” said Trent Whiting, marketing representative for SeCan.
“Because it’s the third tier in the milling class, I would assume that it would be the least valuable. But the first year is going to be really difficult to get clear pricing signals for what that class is really worth.”
Producers will need to factor that into their planning this year, added Kennedy.
“We don’t want somebody to plant something in the spring thinking it’s a CWRS and then, when they go to market it, have it be in that new class and have a lower price than they had pencilled in.”
Preparing this fall
Although the changes won’t come into effect until next August, producers should start planning for the transition this fall following harvest, said Kennedy. That means booking seed early in some cases.
“If they plan to transition to a new variety, they should be looking for seed,” he said. “There are a lot of people who grow Harvest now who will be transitioning out of that variety in the spring, so there might not be enough seed (of popular alternative varieties) around.”
Producers will also need to know which class they’re growing for when it comes time to market their grain next year.
“It’s still going to look like it’s a hard red spring, but the variety has moved classes, so they’re going to need to know which class they’re growing for,” said Whiting.
“They’ve got to make sure they know the variety that they’re growing because when they go to deliver it, they’re going to have to sign a declaration now telling the grain system what they have.
“Answering, ‘I don’t know,’ will probably land you in the special purpose class no matter what your sample looks like.”
There are some good alternative varieties for producers who want to stick with a CPS or hard red spring wheat, but for producers who want to make the switch to the new Canadian Northern class, they should first talk to their grain buyer to get a sense of demand and pricing.
“We’re not really sure yet what the demand for that new class is from foreign buyers. Demand may be very strong and the price may be very similar to CWRS,” said Kennedy.
“It will take a year to see what the demand from foreign customers is.”
In the meantime, preparing for that change now may save producers some cash flow headaches down the road, he added.
“There’s a risk that it will affect their bottom line if they grow one of the varieties that’s being reclassified and it doesn’t bring as good a price as they thought it was going to,” said Kennedy.
“Hopefully nobody will see a surprise loss of income.”
For more information on the wheat class changes, visit www.grainscanada.gc.ca.