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Canada broadens global wheat markets

The Canadian International Grains Institute (Cigi) and Cereals Canada has published a wheat and durum market analysis that urges Canada to look outside traditional markets to grow its cereals export industry.

The study, conducted by market research firm LMC International, claims that Canadian wheat is known for its consistency, high quality and cleanliness around the world, and this brand differentiates it from competitors’ products in long-standing markets like North America and Japan. However, more needs to be done in coming years if we wish to keep pace with competitors like the United States and Australia in key growth markets, says Cam Dahl, president of Cereals Canada.

“If we’re going to pursue growth, then we are going to have to look outside of those traditional markets for Canada Western Red Spring (CWRS) wheat and amber durum and carry that differentiation and branding into other markets, such as West Africa,” Dahl says.

West African nations, as well as important South American markets, will be high on Team Canada’s priority list for trade missions this fall and winter. Team Canada refers to a collaborative effort between Cereals Canada, Cigi, the Canadian Grain Commission, industry representatives, and Canadian wheat and durum growers, which sends representatives of each of these groups on trade missions around the world. Team Canada’s first trade mission, in 2014-2015, helped promote the Canadian wheat and durum industry to 20 countries.

This fall and winter, Team Canada will hit the road, meeting with customers, government officials and agencies in the United States, Korea, Japan, and West African nations Ghana and Ivory Coast, as well as countries in North Africa, the Mideast and South America.

Dahl says there’s potential to expand Canada’s market for prairie spring wheat in South America, because this class meets particular demands of the South American market. And in West Africa, there is strong potential to emphasize the different uses for CWRS as an enhancer of wheat purchased from other countries.

According to JoAnne Buth, chief executive officer at Cigi, West and sub-Saharan Africa is a very interesting market for Team Canada. Once French or English colonial nations, there is a market in these countries for high-quality baked breads rather than traditional flatbreads. “Just before I came on with Cigi, the staff did an investigative mission to Africa to look at where wheat was going, and Nigeria has some of the largest mills in the world,” Buth says. “My colleagues saw some of the opportunities and thought this was where there was going to be great growth and demand.”

Canada needs to get moving to meet that demand. According to Buth, the United States and Black Sea nations are Canada’s chief competitors in West Africa. Though Canada’s wheat is of higher consistency and quality than wheat from the United States, it is sometimes used as the strong component in blends with Black Sea wheat.

In Southeast Asia, Australia is our chief competitor for white wheats; in recent years, Australia’s production of white wheats has significantly improved.

Market support
Team Canada’s missions are not just about grabbing market share. An important aspect of Team Canada’s trade missions is market support, Buth says. Prior to Team Canada’s trade missions each year, Cigi runs a full analysis on samples from all of its wheat grades, so Team Canada can present up-to-date data on the current crop’s qualities.

“The tests look at protein content and quality and gluten strength. The samples are milled, flour is tested and we produce end products like bread, pasta and noodles,” Buth says. “Then we’re able to provide customers with the technical information that they’ll need, from the water absorption to the volume and size of the loaf, as well as loaf colour and pasta colour.”

As part of that market support, the Canadian producers on each trip take an active role in discussing their on-farm practices and answering questions on wheat quality and cleanliness.

“Growers are a very important part of the team that goes. When a grower stands up to talk about their operation, there is silence in the room,” Buth says. “Buyers, millers and users are always fascinated by where the product comes from, and there’s enormous value in hearing from the producer.”

But beyond customers listening to Canadians representing our wheat and durum, Dahl says it’s critical that Canada listens to the needs of end-users if our markets are to expand. “As an industry, we have to pay attention to what the customer wants. Everybody in the value chain needs to be happy, which is another way of saying profitable,” he says. “That includes the companies developing new varieties, that includes the farmers growing them. If customers don’t like them we’re not going to have anywhere to sell them.”

Buth says that post-Canadian Wheat Board, there was concern about what would happen to the Canadian brand. “The report made clear there is a Canadian brand. And our growers are the start of all this, producing high-quality wheat.”

And, Buth adds, growers will play a crucial role in Canada’s continued market expansion abroad. “If we’re going to develop new markets and classes, we have to pay attention to how competitive we’re going to be, and we want grower participation in those conversations.”  

December 11, 2015  By Julienne Isaacs