A hallmark of many successful leaders is an ability to spot incoming problems a long way out and disarm or deflect them before they become a problem.
Canada’s grain industry, a global grain leader, has failed to do that with one present problem, but probably still has a chance to dodge another one.
The issue is the simmering U.S. annoyance with Canada’s rules on American grain delivered to Canadian grain elevators.
Currently, any driveway-delivered U.S. wheat gets classed as feed regardless of its variety or characteristics, due to being foreign.
But Canadian farmers can load trucks and ship the other direction and get graded just like any other load of grain.
That’s an unfair situation, and it’s beginning to aggravate our biggest trading partner.
The issue isn’t too big a deal — yet. Americans seldom want to deliver to our elevators and the problem is mostly theoretical. However, when a year comes when Canada has higher prices and better movement than the U.S., there’s a problem waiting to explode. U.S. farmers probably won’t react well to being prevented from doing what they have seen Canadian farmers do for years: cross the border and sell grain fairly.
Failing to perceive or quickly dispatch a problem can cause significant and lasting damage, as we’re seeing now with the slump in wheat quality standards caused by low-gluten strength varieties and the end of the Canadian Wheat Board monopoly powers.
Canada and the U.S. both have problems with spring wheat quality slipping in the last few years, a problem mostly provoked by farmers switching to high-yielding varieties like Prosper and Faller.
However, Canada has always had a better quality and consistency reputation than the U.S., something that was partly due to the ability of Canada’s grain industry structure, including CWB oversight, to focus on meeting or exceeding customer expectations.
When the CWB monopoly disappeared, so did its customer-focused oversight of the quality of grain, and things began to go awry.
Some of the problems were inevitable, with the new varieties messing up comfortable assumptions about predictable wheat quality, but I can’t believe the CWB wouldn’t have been able to better monitor true grain quality on the Prairies and make sure the right customers got the right wheat.
By not being able to do that, and having this problem go on for a number of years, Canadian grain marketers lose some of their ability to demand premiums on Canadian wheat, and that’s money that never ends up in the farmer’s pocket.
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