GrainsWest Fall 2019

Fall 2019 grainswest.com 23 extensible. As well, we have the ability to provide consistency in our products.” This was a key finding of the Black Sea Investigative Mission, led by the Canadian International Grains Institute (Cigi) in September of 2018. Representatives of AWC and Cereals Canada also participated, visiting farms, agro-holding companies, life science corporations and breeding institutes in both Russia and Ukraine. “We had heard a lot from customers about their increased usage of Black Sea wheat and we realized that we didn’t have a very good understanding of the quality of that wheat,” said Lisa Nemeth, Cigi director of international markets. “So, Cigi’s goal …was to get a better understanding of what was being produced where, what was going to export markets, and what was the longer-term plan for quality. That way we could understand what the impact might be to markets that Canadian wheat was going into.” Daniel Ramage, Cereals Canada director of market development, said he was surprised by the scale and sophistication of the farming operations he saw over the two- week-long investigative mission. “One of the models that’s commonly used there is something that they refer to as agro-holding companies,” he said. “Rather than your traditional family farm, these are major companies that are operating on a huge land base … in a fairly sophisticated and efficient way.” Backman said investment dollars have poured into the Black Sea region since the break up of the Soviet Union, resulting in the targeted development of the region’s agricultural potential. Today, large, vertically integrated farming operations, many with headquarters in Moscow or Kiev are commonplace. “The biggest shock that I had was seeing a Bourgault seeder, made in Saskatchewan, operating on a Russian field,” said Backman. “They have access to all of the same technologies that we do, with the exception of seed varieties.” He added even the least vertically integrated agro-holding corporations the mission visited owned land, elevators and transport equipment. “They are essentially able to truck from where they’re growing to port,” he said. “Some of the ones that we saw did have to deal with rail transportation, but they owned the farm and the elevator—and they also owned the terminal as well. They were actually able to, as a farming business, bid on contracts.” According to the mission’s final report, the Black Sea region’s close proximity to ports provides farmers there with a significant logistical advantage. Improved rail transportation in the region would also unlock greater efficiencies and further improve its competitiveness. “From an export perspective, the region’s freight advantage is further supported by relative geographic proximity to significant and growing demand in African and South Asian markets,” said the report. But Alberta’s geographic advantages can’t be forgotten, according to Backman. “We’re beside one of the biggest markets for wheat in the entire world—the United States,” he said. “South America, especially the west side of South America out of Vancouver, is also a very strong market for us.” Other Alberta advantages include well developed on-farm storage allowing for even product flow throughout the year. “That allows us to maintain quality over our crops for quite a long period of time,” said Backman. “While grain piling still does happen, it’s still much more common in the Black Sea region than it would be in Canada. That being said, the Black Sea Region is rapidly closing that gap. They’re doing a lot of investment in storage. Not just for quality control but also for segregation.” Ramage emphasized that Canada’s main advantage over the Black Sea region comes down to quality, consistency and cleanliness. “A lot of that comes back to farming decisions, but it also comes back to the institutional and regulatory environment in Canada,” he said. “We are recognized for our grain handling system in Canada, so that’s a major advantage. But the practices farmers employ in order to maintain quality and produce consistent and clean product are also really important.” Packaged flour rolls down a production line at a mill inMoscow, Russia.