Commercial Grain Trade – What are the major differences and similarities in the grain grading systems in U.S. and Canada?

What are the major differences and similarities in the grain grading systems in U.S. and Canada?

The two systems are similar in that both systems establish official grades for all major grains, provide standardized measures of quality for commercial trading and facilitate price discovery and market value communication.  Both grading systems allow for sales by specific factors as well as grades.

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, wheat of any origin can be certificated with a U.S. official grade.

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 standard factor levels to establish base grades while allowing the contract specifications to capture customer desires that are different than those comprised within the statutory grade.

The protein measurement systems in the U.S. and Canada are different, as they are based upon different standardized moisture levels.  But measurements of protein for the U.S. and Canada are comparable through mathematical conversions.

Canada’s system is closely linked to variety evaluation and registration. There is no equivalent official variety registration system in the U.S. This is a reason why most U.S.-grown wheat cannot be graded officially in Canada higher than the lowest statutory Canadian Grain Commission grade in the particular class.  In the U.S., variety can be mandated by contract specification between the buyer and seller.

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.  Trading on the basis of official or unofficial grades is widely available in the U.S., but exports from the U.S. must, by law, be officially graded.

Additional information on Canada and U.S. grading systems are available here (Canada) and here (U.S.).

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