U.S. Grain Producer FAQs

U.S. Grain Producer Questions & Answers

Grain Commercial FAQ Coming Soon

Download offline version of the U.S. Grain Producer FAQ (pdf)

Sections:

Finding a Buyer
Grading System
Contracts & Pricing
Crossing the Border
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 U.S. producers’ ability to deliver wheat to Canada?

The Marketing Freedom for Grain Farmers Act does not change the current situation for U.S. producers delivering wheat into Canada.  While there are no regulatory restrictions on cross-border deliveries, beyond phytosanitary requirements, Canada does have different marketing practices and grading regulations that U.S. producers need to be aware of when delivering grain into Canada.  As in any commercial transaction, U.S. producers must determine if selling into Canada is profitable.

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 Canadian Grain Elevators and Buyers?
A listing can be found here.
What elevators in Canada will accept U.S. origin grain?
Reference information found here.

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Grading System, How Grain Quality is Determined

What are the objectives of Canada’s official grain grading system?
Brands Canadian grain by assuring consistent quality for buyers; Stimulates ongoing quality improvement by relating quality to price; Facilitates fair payment to producers based on quality attributes; and Helps to inform production decisions.

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

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

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Does Canada’s system restrict the varieties of wheat that Canadian producers can grow?
No.

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Does a seller of U.S. grain need to provide varietal information in Canada?
No.

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

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What are the statutory grain classes of Canadian Wheat?

Canadian wheat varieties fall into 10 classes and each class is unique. The varieties within each class are grouped by their functional characteristics. For example, varieties in the Canada Prairie Spring Red class have medium hard kernels and medium dough strength.

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What are the requirements to receive a Canadian statutory grade?

Varieties that are registered and grown in Canada can be delivered into the grain handling system and be eligible to receive statutory grades.  Varieties grown in the U.S. can be delivered into the bulk grain handling system but the only statutory grade that can be applied is feed grade.

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Does Canada’s grain grading system facilitate sales on specification as well as statutory grades?

Yes, The Canadian grain grading system facilitates sales by specifications in several ways.

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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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How and why is Canada’s grading system linked to Canada’s variety registration?

In order to maintain a high quality standard for statutory grades, the variety evaluation and registration process is closely linked to Canada’s grain classification and grading system.

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Contracts and Pricing

What is the process for entering into forward contracts or making spot deliveries of U.S. grain into Canadian grain facilities?
Grain generally enters the Canadian grain system under contracts that specify the delivery period, either spot or deferred.

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How do sellers of grain of U.S. origin into Canada compare nominal Canadian and U.S. prices?
Canada uses the metric system for weights and measures whereas the US uses the English system.

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Where can pricing information for grain delivered to Canadian elevators be found?

Sellers of U.S. grain wishing to deliver to a Canadian grain facility can obtain price information directly from the grain company either by phone or in some cases on company websites.

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What trade rules govern cash grain sales at Canadian elevators?
There are no standardized rules for grains and oilseeds delivered to Canadian elevators.  The conditions are contained within the terms of the contract.

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

Yes.

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Crossing the Border

Where are the Canadian / U.S. 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 Canada from the U.S.?

All drivers must have a valid driver’s license for the transport unit they are operating.

All drivers and passengers must have a valid passport or Free and Secure Trade (FAST) identity card.

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

All carriers (Producer and Commercial) require a Canada Border Services Agency (CBSA) issued carrier code to cross the border.

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

U.S. producers hauling grains into Canada do not require specialized licensing (i.e. farm plates are permitted), if they are hauling their own grain.

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What are the load restrictions for grain trucks on Canadian highways?

The Provincial and Territorial governments in Canada have authority over the weight and dimension limits which apply to the highways within their boundaries.

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

Depending on the crop type being imported, its origin and its intended end use there may be phytosanitary import requirements (i.e., a phytosanitary certificate, an import permit, certificate of origin, or other document).

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What if the grain requires further processing (includes cleaning) after entering Canada?

The importer will need to ensure that any grain or seed imported into Canada that requires further processing (such as cleaning), meets the requirements of CFIA directive D 96-07 (Import Requirements for Screenings and Grain and Seed for Cleaning).

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Are there any additional requirements if the grain or grain products being imported to Canada are for animal feed?

Depending on the end use of the grain, the shipment might also be regulated by the animal feed program.

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Are end-use certificates required for shipments of grain of U.S. origin into Canada?

No.

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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 Canadian grain elevators when receiving grain by truck?

Canadian 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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Grain of U.S. origin delivered into Canada can receive a U.S. grade in Canada. How is the grade determined?

Canadian grain companies and processors are free to bid for and settle grain of U.S. origin basis U.S. grades and establish premiums and/or discounts for grading specifications including moisture, protein content, falling number, dockage, foreign material, damage, vomitoxin, etc. in the same way grain companies and processors do in the U.S.

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

No specific documents related to chemical use are required to sell grain in Canada unless specified in the contract agreement.

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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.?

http://www.mrldatabase.com/

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Where can I find information regarding MRLs in Canada?

MRLs for Canada can be found on the Health Canada website at http://www.hc-sc.gc.ca/cps-spc/pest/part/protect-proteger/food-nourriture/mrl-lmr-eng.php

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

If there is a question about a particular grade or factor within a grade there may be an opportunity for a representative sample to be drawn and submitted to a qualified third party at a different location.

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Settlement – Payment

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

Canadian elevators can provide immediate payment via cash purchase ticket (grain cheques) at the elevator at the time of unload as long as a grade and price have been established.  However, as per industry practice most often payment is made upon completion of the contract agreement or delivery period.

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

Canadian grain purchase contracts typically include a term whereby the seller represents to the purchaser that the seller is the owner of the grain in question and that the grain is free from all liens, charges or other security interests.

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How are grain facilities licensed in Canada?

The Canadian Grain Commission is a federal government agency that operates under the authority of the Canada Grain Act.

What is the payment protection program in place for deliveries to licensed grain handling facilities in Canada?”]The Canadian Grain Commission’s (CGC’s) producer payment protection program is a security based mechanism. Under the Canada Grain Act (CGA), companies which purchase grain from western grain producers are required to be licensed by the CGC and to post security (in the form of a bond, irrevocable standby letter of credit or guarantee, payables insurance, or cash deposit), to cover eligible producer grain liabilities.

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Check-offs, Taxes and Other Deductions

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

Most grain delivered in Canada is subjected to a provincially regulated mandatory check-off to provincial commodity associations which use the funds for research and market development activities.

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

The CFIA has created an information kit for brokers that act on behalf of an importer bringing grain or seed into Canada. This document is available here: http://www.inspection.gc.ca/english/imp/kite.shtml

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What if the grain is to be re-exported from Canada?

For any grain or seed that is going to be re-exported from Canada, it is the exporter’s responsibility to ensure the commodity meets the import requirements of the destination country.

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Once the grain shipment enters Canada are there any additional conditions that must be followed?

In most cases, once a grain shipment has been cleared by Canada Border Services Agency (CBSA) on behalf of the CFIA, it can move within Canada.

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