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.
The two systems differ in that the official grading system in Canada encompasses a broader spectrum of specifications. As a result, there are more statutory grades in Canada versus the U.S. The U.S. system is more reliant on contract specification reducing the number of grades while allowing the contract specifications to capture customer wants rather than the statutory grade.
Canada’s system is closely linked to variety evaluation and registration. There is no equivalent official variety registration system in the U.S. In the U.S., variety can be mandated by contract specification between the buyer and seller.
Both systems modify grade specifications in response to industry demand. Canada relies more on statutory grades to reflect industry demand. The U.S. has fewer official grades and relies more on contract specifications to reflect industry demand.
Canada’s grading system can apply to all wheat origins for trade on specifications but only Canadian-grown grain can receive official statutory grade certification other than the lowest statutory Canadian Grain Commission grade in the particular class (e.g., Feed Wheat or #5 Amber Durum). The U.S. system is not tied to any origin or variety requirements so, if examined under the official U.S. system, any wheat sample can be certificated with a U.S. official grade.