Canadian Grain Producer FAQs

Canadian Grain Producer Questions & Answers

Download offline version of the Canadian Grain Producer FAQs (pdf). If you have additional questions, please submit them online.

Sections:

Finding a Buyer
Grading System
Contracts & Pricing
Crossing the Border
Regarding the Delivery of Grain
Settlement – Payment
Check-offs, Taxes & Other Deductions
Relevant Regulations & Standards

Introductory Questions

How does Canada’s new grain marketing legislation (the Marketing Freedom for Grain Farmers Act) affect trade?
Deliveries of Canadian wheat and barley can now be contracted and sold through the open market from any supplier and to any buyer for delivery after August 1, 2012.

Effective August 1, 2012 the cross-border system for wheat, durum and barley trade will work as it does for other commodities such as canola and pulses. Export licenses will no longer be needed to export wheat, durum or barley from Canada. Grain entering Canada would still be subject to Canada’s phytosanitary requirements.

How do the changes to the Canadian system affect Canadian producers’ ability to deliver wheat to the U.S.?
Canadian producers can contract and sell their wheat, durum and barley either directly or through a grain company to buyers in the U.S. without going through the Canadian Wheat Board. Export licenses will no longer be needed to export wheat, durum or barley to the U.S. More information is available at: Customs Notice 12-019

Will the Canadian Wheat Board still exist after August 1, 2012?
Yes.  The Canadian Wheat Board will exist after August 1, 2012, but will be known as the CWB.  The CWB will continue to operate as a state trading organization for up to five years, albeit without a monopoly on the marketing of wheat and barley. It will operate voluntary commodity pools for farmers and grain buyers who wish to avail themselves of the CWB’s service.

 

Finding a Buyer

Where can I find a listing of U.S. Grain Elevators and Buyers?
A listing can be found here.

What elevators in the U.S. will accept Canadian origin grain?
Reference information found here.

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Grading System, How Grain Quality is Determined

What are the objectives of the U.S. official grain grading system?

Facilitates the marketing of cereals, oilseeds, and related agricultural products for the overall benefit of consumers and American agriculture.

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Can grain of Canadian origin receive an official U.S. grade?
Yes.

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Can grain of U.S. and Canadian origin be commingled in a U.S. elevator?
Yes.

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Does the U.S. system restrict the varieties of wheat that U.S. producers can grow?
No.

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Does a seller of Canadian grain in the U.S. need to provide varietal information?

No.

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Is there a difference in the way Canada and the U.S. measure and report protein content?
Yes.

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What are the statutory grain classes of U.S. Wheat?

The U.S. defines wheat grain that, before the removal of dockage, consists of 50 percent or more common wheat (Triticum aestivum L.), club wheat (T. compactum Host.), and durum wheat (T. durum Desf.) and not more than 10 percent of other grains for which standards have been established under the United States Grain Standards Act and that, after the removal of the dockage, contains 50 percent or more of whole kernels of one or more of these wheats.

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Does the U.S. grain grading system facilitate sales on specification as well as statutory grades?

Yes.

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What are the key similarities and differences between the U.S. and Canadian grading systems?

The two systems are similar in that both systems establish official grades for all major grains, form a basis for transactions as well as facilitate price discovery and value communication.  Both grading systems allow for sales by specification.

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Why does the U.S. not have a variety registration system?

The U.S. has focused its regulatory agencies on developing seed producer competence and providing consumer/producer education.

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Contracts and Pricing

What is the process for entering into forward contracts or making spot deliveries of Canadian grain into U.S. grain facilities?

Unless deposited for storage, grain generally enters the U.S. grain system under contracts that specify the delivery period, either spot or deferred.  In the US, like Canada a verbal agreement is considered an enforceable contract, however, in most cases a written confirmation will be forwarded to the producer to be signed.

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How do sellers of grain of Canadian origin into the U.S. compare nominal U.S. and Canadian prices?
U.S. prices are generally listed in U.S. dollars per bushel.  A bushel is an “avoirdupois or imperial ” (U.S. / British) and U.S. customary unit of dry volume.

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Where can I find pricing information for grain delivered to U.S. elevators?
Price indications are provided on many websites and advisory services.  Sellers of grain wishing to deliver grain to a U.S. grain facility should always obtain actual or contractible price information directly from the grain company.

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What trade rules govern cash grain sales at U.S. elevators?
Many grain facilities in the U.S. use the NGFA Grain Trade Rules and arbitration.  Adopted in 1902, these rules govern most transactions of a financial, mercantile or commercial nature involving grain in the U.S.

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Can Canadian origin grain be priced against U.S. futures contracts?
Yes.

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Crossing the Border

Where are the U.S./Canadian border crossings located?

Canada Border Services Agency (CBSA) offices  and U.S. Customs and Border Protection offices.

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What identification is required to enter the U.S. from Canada?

Canadian Producer and Commercial Truck drivers require a valid driver’s license for the transport unit they are operating. All drivers and passengers need a passport or FAST card

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What customs and other documentation are required for grain to enter the U.S. from Canada?

Canadian Producer and Commercial Trucks would need a Standard Carrier Alpha Code (SCAC) code and transmit information electronically through the Automated Commercial Environment (ACE).

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What are the licensing and registration requirements for Canadian trucks transporting grain within the U.S.?

Canadian producer trucks hauling grains into the U.S. do not need specialized licensing (i.e. farm plates are permitted), IF hauling their own grain.

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What are the load restrictions for grain trucks on U.S. highways?

The U.S. has weight limits for heavy vehicles, such as grain trucks.  For interstate highways, the weight limit is 80,000 lbs. of total weight.

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What documentation is required to import grain of Canadian origin into the U.S?

Primary responsibility for administering the U.S. laws relating to import, export and the collection of duties is given to the United States Customs and Border Protection (CBP), an agency within the Department of Homeland Security.

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Are end-use certificates required for shipments of Canadian origin in the U.S.?

Yes.

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Where can I find current and additional information related to border crossing?

There are several websites that offer different types of relevant information, including current border wait times, weather conditions, road conditions, current traffic conditions and more.

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Regarding Delivery Of Grain

What sampling methods are used by U.S. grain elevators when receiving grain by truck?

U.S. elevators typically use a probe sample prior to unload or a hand sample while unloading to sample grain received from trucks at the elevator.

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When grain of Canadian origin receives a U.S. grade in the U.S., How is the grade determined?

The sample will typically be tested for dockage, test weight, moisture and protein.  More tests may be or may not be done depending on the physical appearance of the sample and the experience of the crop year.

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Are varietal declarations by producers required at U.S. elevators for grain of Canadian origin?

Only if they are required under commercial contract.

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What documentation is required regarding the producer’s chemical use when grain of Canadian origin is delivered to a U.S. grain facility?

Unless specified in contracts no specific documents related to chemical use are required to sell grain to U.S. grain elevator or to anyone in the U.S.

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Where can I find information regarding chemicals approved in the U.S. but not in Canada or approved in Canada but not in the U.S.?

https://www.cipm.info/

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Where can I find information regarding MRLs in the U.S.?

USDA FAS maintains a global database on pesticide MRLs at: http://www.mrldatabase.com/ and at that site related market information from some countries is linked.

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What recourse do sellers of Canadian grain have with quality problems or rejection in the U.S.?

Sellers should be sure to understand all terms that apply to the sale of grain to any U.S. grain buyer.

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Settlement – Payment

When is payment received for Canadian grain delivered to U.S. elevators?

Technically the seller can receive payment promptly at the time of a truck delivery, but more normal practice is to complete delivery of the farm bin or bins being emptied, or the fields being harvested, before making payment.

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What is required to prove clear title to Canadian grain delivered to U.S. elevators?

In the U.S. if grain that has a perfected lien against it is sold into commerce, the buyer may face the risk of paying twice for the same amount of grain.  State laws vary on this aspect of risk to the elevator.

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How are grain facilities licensed in the U.S.?

U.S. grain elevators providing storage for grain owned by farmers or others are generally required to have a warehouse license to conduct business.

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What are the bonding requirements and payment protection programs in place for grain facilities in the U.S.?

U.S. buyers are either privately owned companies or farmer-owned cooperatives. There is generally no problem with sufficient funds being held by the elevator business to cover the checks issued to grain sellers, but bankruptcies can occur.

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Beyond the bank deposits and net assets of the elevator company, what other resources are available to assure financial performance of the U.S. buyer?

U.S. grain elevators, because they provide storage services, are generally required to have a warehouse license to conduct business.  This warehouse license may be issued by either the federal U.S. government or the state government.

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Check-offs, Taxes and Other Deductions

What check-offs will Canadian grain delivered to Canadian U.S. be subject to?

The U.S. has established marketing promotion programs for wheat and other commodities that are paid for by producers growing wheat in the U.S. and/or selling wheat at U.S. locations.

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What other deductions can I expect from my settlement for Canadian grain delivered to U.S. grain facilities?

Assuming all specifications of the contract are met and other than the “checkoff” that may apply, we are not aware of any mandatory, common or additional deductions from settlement.

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Relevant Regulation and Standards

What other information is important for grain deliveries in the U.S.?

Anyone importing into the United States may want to refer to the U.S. Customs and Border Patrol (CBP) website for general information related to importing into the United States

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What if the grain is to be re-exported from the U.S.?

Once traded beyond the first point of delivery, we address the grain transaction under the Grain Commercial module on this website.  For any grain that is going to be re-exported from U.S., it is the exporter and his supplier’s responsibility to ensure the commodity meets the trading, import and export requirements of the U.S. and the destination country.

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Once a truck with grain is in the U.S. are there any additional conditions that must followed?

Compliance with U.S. laws, including posted speed limits and other laws impacting transport in the U.S. is mandatory.

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