One of the most frustrating things in the cash cropping business is to deliver grain to an elevator or end user and find out that the receiver has a different idea about your grain’s quality than you did.
Grade discounts or an outright rejection are expensive, and with the narrow margins of the 2023 grain market, it’s not a hit that anyone wants to absorb. When harvesting another year’s crop and moving it to market, how can farmers ensure that the grades are fair and quality assessments are accurate?
The good news is that disagreements about grain quality are not new, and over the years the grain industry has developed a set of rules to govern how to deal with grade disputes.
The Canadian Grain Commission regulates grain movements through the terminal elevators, and acts as the referee in cases where the shipper and receiver don’t agree on product quality. The entire procedure is actually laid out on the Canadian Grain Commission website under the heading of “Final Quality Determination.”
If you are suffering from insomnia or have gotten tired of watching the Maple Leafs lose, it might be a good use of time to read, but in practical terms all that a grain shipper needs to know if they believe that their delivery has not been graded appropriately is to ask for the retainer sample to be sent to the Canadian Grain Commission for re-inspection. The regulation provides that any Canadian grain producer or Canadian grain company can request grade determination.
The reality is that most of Ontario’s grain does not get delivered to export terminals, but rather to country grain elevators, feed mills and other processing facilities. As a result, the Ontario Agri-Business Association and the Grain Farmers of Ontario collaborated to create a Code of Practise for Trade in grain. The process for grade arbitration in Ontario facilities is largely similar to the one in use at federal terminals except that in Ontario licensed elevators the grain producer and the grain elevator can agree to use either the Canadian Grain Commission or some other mutually agreed to third party lab as the final determinant of grain quality. Similar to the procedure in the federal terminals, it is up to the producer or grain shipper to ask for a third party to re-grade the representative sample taken from the disputed delivery.
Whether you are working through the Canadian Grain Commission protocol at a terminal elevator, or following the code of practice at an Ontario country elevator, the process flow is nearly identical. Regardless of where the disputed grain is being unloaded, it is the shipper’s responsibility to speak up, and they need to ask for grade arbitration while they are still on site.
There is a small difference in how the re-inspection sample is gathered depending if the dispute occurs at a federal terminal or at a country elevator. A terminal setting can take an “official” grain sample using the tools and training which is in place at export facilities. In a country elevator, the approach is more collaborative. Both the shipper and the receiver are asked to work together to collect a sample which they both agree is representative of the load in question.
Regardless of which level of facility the grade dispute occurs at, when the grading slips from the sample come back, the grades are final and the disagreement is officially resolved. There is no appellant court of grain testing, which is actually useful for commercial trade. Re-inspection results are usually back within about five days and win or lose both parties need to agree to accept the outcome and move on.
As a matter of cultural etiquette in the Ontario grain trade, the custom is that the loser pays for the costs of the courier and lab fees to have a load sample re-graded. This is a very fair way of handling these disputes because the party which was correct incurs no costs, and it discourages people who were either frustrated or surprised from making unnecessary requests for re-grading.
In spite of the fact that the grain industry has developed standards and procedures for determining the quality of grain and resolving disagreements when quality issues arise, the most important management task for grain growers is to avoid getting into contentious situations in the first place.
Be aware of potential grain quality issues which may arise due to environmental conditions in your area. Things like mycotoxins, sprouted wheat, or low test weights tend not to happen only on one farm. They can be the result of a particular weather pattern. So if there are rumours of grain quality challenges in your area, have some samples assessed before you start shipping loads. Not only does knowledge of a grain quality issue alleviate some of the shock or surprise, if a delivery is down graded, but understanding grain quality prior to trying to move grain might enable you to select a market which is more suited to the product’s quality. For example if you have low falling number wheat, moving it directly to a feed mill is likely a better strategy than shipping loads to a flour mill, and then dealing with grade discounts or rejection.
Steve Kell is a Simcoe County crop farmer and handles grain merchandizing for Kell Grain, with