Facilitating the Marketing of America’s Grain Grain Inspection, Packers and Stockyards Administration : Facilitating the Marketing of America’s Grain Grain Inspection, Packers and Stockyards Administration John B. Pitchford
Director of International Affairs
Grain Inspection, Packers & Stockyards Administration November 15, 2004 Berkeley, California
Slide2: Federal Grain Inspection Service
U.S. Grain Standards Act
Agricultural Marketing Act U.S. Department of Agriculture
Grain Inspection, Packers and Stockyards Administration
Mission: Mission To facilitate the marketing of livestock, poultry, meat, cereals, oilseeds, and related agricultural products, and promote fair and competitive trading practices for the overall benefit of consumers and American agriculture.
Core Business Practices: Core Business Practices Provide the market with terms and methods for quality assessments
Protect the integrity of U.S. grain and related markets
Provide official grain inspection and weighing services for American agriculture
Service Provision: Service Provision Terms (i.e., grades/standards)
Maintain grading standards for grains, rice, beans, peas, and lentils
Analytical Methods
Maintain over 1,400 methods of analyses
Official Inspection System
Annually certify the quality and quantity of 96.5 million metric tons of grain exported to more than 130 countries around the world
Slide6: Grain & Oilseed Marketing Channels Commodity Easily
Measured
Attributes Variety
Specific Absence of
Attribute Organic Pharmaceuticals $ $ Value of product differentiation The U.S. grain market ranges from the commodity market to the very high value added identity preservation system. Between these two extremes lies an evolving market of greater product differentiation driven by technology, consumer demands, and global competition.
E E Market efficiency
Slide7: Commodity Easily
Measured
Attributes Variety
Specific Absence of
Attribute Organic Pharmaceuticals Commodity Market
High volume
Low margins
U.S. Grain Standards
Grain type
Class
Subclass
Quality Yellow corn
White corn
Soybeans
Hard Red Winter Wheat
Hard Red Spring Wheat
Soft Red Winter Wheat
Soft White Wheat
Hard White Wheat
Grades 1 - Sample Practical Market Driven
Thresholds/Tolerances
Mixed Grain > 10%
Lower Grade
WOCL
U.S. # 1 < 2%
U.S. # 2 < 5% Testing: rapid (minutes), accurate (USDA reference),
reliable, inexpensive. Grain & Oilseed Marketing Channels Multiple commodities coexist in current market
Slide8: Commodity Easily
Measured
Attributes Variety
Specific Absence of
Attribute Organic Pharmaceuticals Grain & Oilseed Marketing Channels Protein
Oil
Starch Technology offers the opportunity to expand the measurement of attributes. The challenge is to define the appropriate attributes that reflect end-use value for the diverse products made from today’s cereals and oilseeds.
Slide9: Commodity Easily
Measured
Attributes Variety
Specific Absence of
Attribute Organic Pharmaceuticals Farmers contract with handler or processor
to produce a specific variety for a specific quality attribute.
Premiums
May specify agronomic practice
Seed verification (tag, invoice, etc.)
Testing unlikely (too costly and slow)
U.S. standards and quality requirements
Specified delivery time and location Trend:
Quality of protein
Composition of oil
Starch attributes Grain & Oilseed Marketing Channels
Slide10: Market/Customer Defined
Documentation
Testing
Process-based Commodity Easily
Measured
Attributes Variety
Specific Absence of
Attribute Organic Pharmaceuticals New evolving market
Small volume
High risk
Premiums Grain & Oilseed Marketing Channels
Slide11: Commodity Easily
Measured
Attributes Variety
Specific Absence of
Attribute Organic Pharmaceuticals High value specialty market
U.S. Standards
Processed-based
Audit and certification Grain & Oilseed Marketing Channels
Slide12: Commodity Easily
Measured
Attributes Variety
Specific Absence of
Attribute Organic Small very high value market
Produced and processed under
government permit and oversight Grain & Oilseed Marketing Channels Pharmaceuticals
Slide13: Commodity Easily
Measured
Attributes Variety
Specific Absence of
Attribute Organic Grain & Oilseed Marketing Channels Pharmaceuticals Facilitate marketing beyond the traditional commodity markets Quality Standards
Testing Technology
Process-based systems
Harmonization
Quality Standards: Quality Standards Maintain standards that reflect the evolving market needs
New crops – e.g., Hard White Wheat
New agronomic practices – e.g., herbicide resistant crops
New quality attributes – e.g., low linolenic soybeans
New ways of measuring existing quality attributes – e.g., wheat protein quality
Testing Technology: Testing Technology Improve the ability to differentiate end-use quality
Identify key quality attributes
Establish consensus on reference methods
Transfer reference method to market-relevant rapid analytical tool
Establish consensus (national/international) on reporting quality results
Examples:
Extractable and fermentable starch
Protein quality
Amino acid profile
Wheat baking quality
Process-based Systems: Process-based Systems Support marketing systems based on quality management processes
Company or organization develops Quality Policy, Quality Objectives, and Quality Procedures to meet customer demands
USDA verifies adherence to the Quality Management System through third-party audits based on ISO 9001 requirements
Company or organization may market their process or product as “USDA Process Verified”
Harmonization: Harmonization Provide technical assistance to minimize market disruption due to quality standards and regulations
Ensure that quality assessments are accurate and reliable, and that all parties involved understand how quality is defined and measured
Misunderstandings or disagreements about the meaning of basic quality terms, or misuse of quality terms, can result in costly marketing disruptions
Conclusion: Conclusion Quality standards must reflect changing market needs
Testing technology needs to keep pace with new quality attributes
Process verification of quality management systems can further facilitate trade
Harmonization of the terms and measurement of quality promotes efficient trade
Accurate and reliable application of standards and technology are essential