U.S., Canadian grain trade study out

U.S., Canadian grain trade study out

Study on U.S.-Canada grain movement to aid trade relations.

A NEW report released by the Canada-U.S. Grain & Seed Trade Task Group, a group of Canadian and U.S. nonprofit and trade organizations, documents the commercial flow of grain from the U.S. to Canada.

The study examined data from 2010 to 2012 to address U.S. and Canadian trade volume, handling and processing practices for more than 15 commodities traded between the two countries as well as the nature, volume and regional distribution of grain and grain product/byproduct imports of U.S. origin that would aid in understanding the likely applicability of Canada's proposed Grain Import Framework, known as D-12-05.

In 2012, the Canadian Food Inspection Agency (CFIA) initiated a consultation process on proposed new and updated (for certain cereal grains) import control measures intended to manage the agronomic, economic and environmental risk of invasive plant species considered to be pests. Because the invasive species can accompany import shipments from any country of origin, CFIA proposed the additional measures for both the U.S. and offshore countries of origin.

The new directive proposes that all import shipments of U.S. origin will enter Canada either under standing renewable import permits or accompanied by phytosanitary certificates issued by U.S. authorities.

The study found that, on average, corn is the number-one commodity moving north from the U.S. to Canada, at 1.05 million metric tons per year. Average U.S. soybean exports to Canada are 245,000 mt, while wheat exports are 69,000 mt. Additionally, the report indicates that 380,000 mt of screenings enter Canada on average, but this category mainly encompasses highly processed grain commodities that will be exempt from the proposed framework.

The study did find that imports of several commodities from the U.S. into Canada appear to be declining in total volumes. Additionally, livestock numbers in Canada declined from 2010 to 2012, and U.S. corn use for ethanol has increased sharply since 2008. If ethanol production in the U.S. begins to level off (as some predict) and Canada's domestic livestock numbers recover, growth in U.S. corn exports to Canada would not be surprising as the U.S. remains a large surplus producer of corn.

The analysis concludes that corn trade between the countries is more likely to be driven by Canada's need for feed grains rather than the relative size of the corn surplus in the U.S.

According to the report, 54% of all U.S. grain exports to Canada were transported by truck, followed by rail at 32% and water at 14%. The high percentage of truck movements highlights a potential problem if inspections and certificates are required on each shipment. However, based on the risk assessments of the various crops and taking into consideration their end use in Canada, it is expected that only a small number of these U.S. shipments will require a phytosanitary certificate.

The study looked at several reporting districts and found that Pembina, N.D., and Detroit, Mich., had dominated the volume of movements until Detroit declined sharply in 2012 (Table). Most of the Great Lakes traffic for corn and soybeans is from the Detroit and Cleveland, Ohio, reporting districts, and corn volumes shipped by water were particularly lower in late 2012, leading to most of the decline.

Additionally, the study revealed that Canadian processing practices generally minimize phytosanitary risks that may arise from U.S. shipments. The commodities are typically cleaned at the recipient's facility, and screenings are heated, hammered and turned into feed or sent to landfills, which mitigate phytosanitary risks.

The task group has also been engaged with the Canadian government to address concerns and will continue to participate in the government consultation process to improve implementation of D-12-05.

Canadian and U.S. organizations formed the task group in April 2012 and have been working together to communicate cross-border trade information. As part of this effort, the task group launched a website to provide answers to questions about cross-border trade for wheat, durum and barley producers in Canada and the U.S. In its first year, about 4,500 visitors explored information targeted toward Canadian producers, U.S. producers and the commercial grain and seed trade.

The website and full study are at http://canada-usgrainandseedtrade.info. Visitors can submit comments and questions through the website.

 

Total of reported commodity units shipped and volume by export reporting district, 2010-12

 

-Number of units-

-Total weight (mt)-

-Avg. weight/unit (mt)-

District

2010

2011

2012

2010

2011

2012

2010

2011

2012

Pembina, N.D.

562

545

573

984,263

581,852

440,466

1,751

1,068

769

Seattle, Wash.

475

538

548

106,267

161,861

377,726

224

301

689

Detroit, Mich.

783

793

850

1,347,231

1,103,275

467,725

1,721

1,391

550

Buffalo, N.Y.

491

480

501

135,795

112,992

304,737

277

235

608

Ogdensburg, N.Y.

254

233

245

103,838

79,142

77,843

409

340

318

Great Falls, Mont.

329

336

309

103,778

99,679

172,409

315

297

558

Portland, Maine

91

96

84

18,433

20,785

52,095

203

217

620

Low value

567

560

574

74,773

41, 802

270,746

132

75

472

Duluth, Minn.

102

124

92

23,093

24,331

161,893

226

196

1,760

St. Albans, Vt.

37

34

41

11,757

3,662

6,272

318

108

153

Source: Canada-U.S. Grain & Seed Trade Task Group.

 

Volume:86 Issue:03

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