Notice to Members. Review of the Grain Standards 2009/10 Season
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1 A.B.N A.C.N PO Box R1829 Royal Exchange NSW 1225 Phone Fax admin@nacma.com.au Notice to Members Title: Review of the Grain Standards 2009/10 Season Update No.: 4 of 09 Date of Issue: 25 th February 2009 Distribution NACMA Members primary contact list. Please circulate to all appropriate internal parties. Background During deliberations on the development of Grain Standards for the 2008/09 season, feedback was received by NACMA from a wide range of industry sectors on the proposed changes for 2008/09 and potential changes for the following season, 2009/10. The NACMA Standards Committee has recently met to re-consider feedback received from industry and to discuss potential Standards for 2009/10. The attached document lists: Agreed changes for adoption in 2009/10 Potential changes for 2009/10 where further industry advice is required Issues that were previously considered for change in 2009/10 but not accepted for progression by the Committee Proposed changes for adoption in 2010/11 Industry Feedback The NACMA Standards Committee is seeking industry comment on the issues in this document and on any other Grain Standards related issue. Submissions on this should be received by COB Friday 13 th March Please lodge your submissions by sending to admin@nacma.com.au and title your Standards Review 09/10.
2 NACMA Grain Standards 2009/10 Season 1. Background During deliberations on the development of Grain Standards for the 2008/09 season, feedback was received by NACMA from a wide range of industry sectors on the proposed changes for 2008/09 and potential changes for the following season, 2009/10. The NACMA Standards Committee has recently met to re-consider feedback received from industry and to discuss potential Standards for 2009/10. This document lists: Agreed changes for adoption in 2009/10 Potential changes for 2009/10 where further industry advice is required Issues that were previously considered for change in 2009/10 but not accepted for progression by the Committee Proposed changes for adoption in 2010/11 2. Industry Feedback The NACMA Standards Committee is seeking industry comment on the issues in this document and on any other Trading Standards related issue. Submissions on this should be received by COB Friday 13 th March Please lodge your submissions by sending to admin@nacma.com.au and title your Standards Review 09/ Agreed Changes for adoption in the 2009/10 Season 3.1 Agreed Change: For wheat, alter the reference from Varietal Pool (Pay) Grade to maximum bin line in all sections of Standards, including in the Varietal Master List In previous Master Lists, as a consequence of the payment (refer Varietal) grade being different to binning grade (refer AWB s Golden Rewards) the Master List listed each variety as essentially a Pay Grade. For the 2008/09 season this situation created a significant amount of confusion for industry given the Pay grade was not relevant at the point of receival. The majority of industry now trains their samplers to classify individual varietal loads based on the binning line and make no reference to maximum varietal grade or pay grade. It is therefore appropriate to list the maximum classification of a variety according to the maximum bin line. 3.2 Agreed Change: Refine Sampling Guidelines for all grains Where manual probes are being used to sample loads tendered from delivery, there is a need to reflect the practicalities of obtaining a representative sample. It was proposed to alter the sampling procedure to ensure actual practice meets the stated requirements for consistent and representative sampling. Specifically reference will be made to obtaining samples by a manually operated probe from the side of the load that is furthest from the sample stand. Note it is the intent that the revised sampling procedure will be adopted for all commodities.
3 3.3 Agreed change: Revise the names/abbreviations of each wheat grade to ensure consistency in nomenclature and application. A final list will be developed over the ensuing weeks and made available to industry. At present there is a wide array of grade names used within a defined category of existing grade classifications. For example, H2 is the main grade for hard varieties. H1 may be introduced as required. Additionally off-grades such as AUH2 may also be introduced. It is clear the existing names are historical and do not follow a logical sequence. Thus the proposal is to refine the existing names. General principles for the designation of new grades will be as follows: a) All new grades will follow the same format e.g., ASW1, ASW2, ASW3, ASW4 b) Grades will be numbered in order of development c) A lower numbered grade designation may not necessarily imply a higher quality d) The use of the letter A is encouraged to reflect the Standard is for Australian wheat e) No two grades with different quality tolerances will have the same number f) NACMA will introduce new grades as required by industry g) As currently occurs, industry is free to introduce new grades and grade designations however these will only be adopted by NACMA where considered relevant It is not expected this change will have a significant impact on existing grain contracts and will not require a lead-time - for example, an additional 12 months. From a marketing viewpoint, there is no change to the existing export grade names of Australian Prime Hard, Australian Hard etc that industry may use. Industry is encouraged to comment on the above and propose nomenclature for existing grades. 3.4 Agreed change: Barley Reference Booklet to be developed In 2008/09, NACMA produced the Wheat Standards Reference Booklet for use by industry. The Booklet included a range of material that assists industry in the correct application of the Wheat Standards. The Standards Committee has developed a timeline for the publication of a similar booklet for all major grain commodities. As barley is the second most important crop in Australia in terms of tonnage, priority has been placed on its production for Proposed changes where further industry advice is required 4.1 Proposed Change: Increase the minimum test weight for various milling grades of wheat to 76kg/hl. These grades include APH2, H1, H2, APW1, APW2, ASW1, ANW1, ANW2, PNC, PNE, PWT, ASWS, DR1, DR2, SFE1, SFT1, SFE2 (NSW/VIC) and SFT2 Following advice to industry in 2008 that the Committee had proposed the change for 2009/10 a number of discussions have occurred with industry. Feedback on the proposed change has both been positive and negative. At the recent Standards Committee meeting, differing views were held and further comment is sought from industry prior to a final decision being made on the proposed change. Industry should note that Standards must reflect requirements of customers while considering grower and supply chain impacts. Comments supporting change: Export wheat contracts International customer contracts generally require 76-78kg/hl as a minimum test weight despite the current NACMA wheat standards at 74kg/hl. This places additional risk on Australian marketers and this is reflected in price returns paid to growers by marketers of Australian wheat. Australian wheat is not comparable to our main international competitors (USA, Canada etc) with our test weight minimum levels below those of our competitors in the major milling grades.
4 The previous minimum of 74kg/hl has little relevance in international trade Several premium buyers of Australian wheat indicate a significantly higher minimum test weight of 80kg/hl Australian wheat must reflect customer requirements Potential tonnage affected From a national perspective, relatively little tonnage is received between 74-76kg/hl. It is recognised that depending on seasonal conditions, localised areas with low test weight may cause significant angst and result in low returns. For the 2008/09 season, up to 3% (varies by state) of the wheat crop received would have been affected by the proposed change. Note this figure is not able to predict the tonnage of wheat that may have been delivered as a result of the change i.e., blending on-farm of wheat in the range kg/hl with higher test weight to meet the proposed increase for each delivery. Low test weight grain is often affected by other quality defects or contaminants causing downgrading rather than solely test weight Market signal to breeders There is a desire to produce high test weight wheats and the change will provide clearer market signals to industry, including growers and breeders, that low test weight is not a desirable trait. The current Standard limit of 74kg/hl does not reflect the customer requirement and thus does not provide the required quality signals for growers and suppliers of wheat Stockfeed The domestic stockfeed sector has observed that the feeding value of low test weight wheat due to frost damage and small pinched grains exhibited by reduced starch fill results in generally poorer flock performance particularly feed conversion efficiency Other Current specifications are not relevant to trade unless damaged grain is received Wheat with a test weight of 74kg/hl is generally not desired by customers and must be blended with higher quality to make suitable quality wheat Comments not supporting change: There are few if any pricing signals to industry that high test weight is a desirable quality of wheat Production of higher test weight wheats without an increase in returns to growers will simply transfer more benefits to customers rather than the Australian industry Will reduce returns for growers as a higher tonnage will not achieve milling grade Will add to the existing cliff-face pricing structure Wheat is commingled at receival and any higher test weight grain is commingled with lower test weight grain providing the Standard is met. Thus there is no transparency in pricing for higher test weight wheat The current Standard of 74kg/hl is not affecting the buying habits of customers and a significant increase in returns of tonnage sold would not result from the change Australia has not lost any customers or has not been able to compete for customers with the current milling grade limit of 74kg/hl. There is a relatively significant amount of breeding material to be introduced into the cropping system within the 74-76kg/hl range As the breeding process takes several years, there will be limited varieties available to growers that have been targeted as high test weight. Additionally, it will be several years before such material can be bred into lines and become commercially available. The two most recent wheat harvests have severely limited the availability of sowing seed. Additionally growers have been struggling financially and have limited funds to completely replace all seed with new varieties that may produce a higher test weight. It appears a large tonnage of seed for sowing the 2009/10 crop will be obtained via seed retained on-farm from the 2008/09 harvest There is no single method being used for test weight assessment and each method appears to lead to different results
5 Each test method is variable and increasing the minimum Standard will not resolve this issue but potentially lead to greater variability in results 4.2 Proposed Change: Standardise the protein minimum on APW at 10.0% nationally Currently APW2 in Western Australia has a protein min of 10.0% and APW1 in all other States has a protein min of 10.5%. Industry is encouraged to provide comment on the impact of the above proposed change including comments on specific issues such as: Pricing signals to growers Marketing and grade signals to customers Whether a consistent protein level is warranted from an industry perspective Is there a marketing imperative for one grade to be deleted from the Standards and an APW1 or APW2 opened nationally Potential to change either APW1 or APW2 to create a different grade and the impacts on marketing that grain. 4.3 Proposed Change: Alter the screen slot size for oats from 2.00mm x 12.7mm slotted to 2.00mm x 25.0mm slotted During discussions with industry in 2008 it was apparent various slot sizes for oats were being used with the two slot sizes listed above being the most common. It is thought that the 2.00mm x 12.7 mm screen was introduced several years ago as this was the standard screen used on the Agtator for wheat screenings assessment. Thus the change from 25.0mm to 12.7mm may have arisen for convenience. The Standards committee has been requested to alter the reference screen slot size to 2.00mm x 25.0mm. Prior to any potential change being made by NACMA, feedback is sought on the requirements of the oat industry. Advice is sought on all issues including the following: Slot and sieve specifications of sieves currently used by industry Where the above sieves are used in the supply chain and if there are any differences in sieves used along the supply chain (include different market requirements and sieves used by Australian competitors if any) Differences between sieves used for the human consumption, milling and stockfeed markets Details of grower and customer concerns with the current sieves being used Proposed new sieve specifications and reasons for the change or similarly, reasons for maintaining the existing specifications Availability of screens from manufacturers Any publicly available data on different screen specifications and the impact on oat quality The lead-time required for any change Any other considerations 5. Previously Notified Proposed Changes Not to be Progressed 5.1 Rejected change for wheat: For the AUH2 grade, change the Falling Number minimum from 250 to 300 seconds and reduce the maximum Stained grain from 15 to 10% Rejected change for wheat: Change the Falling Number minimum in AGP1 from 200 to 250 seconds These changes were initially proposed as these two grades are increasingly being exported as a straight milling grade and the existing tolerances were considered unsuitable for the required enduse. In considering the proposal, the Committee proposed to reject the changes: A significant tonnage is received of this quality each season. Adoption of this change would in all probability require an additional segregation should wheat be tendered for delivery at the previous specifications
6 Due to standard errors in methods for tests such as the Falling Number and visually Stained grains, accurate analysis of loads and classification into grades would be problematic 5.2 Rejected change for durum: Review the tolerances for Bread wheat contamination of durum The proposed change would impact on the level of bread wheat contamination in durum. From a marketing perspective, a tolerance of bread wheat in durum is required: To provide a signal to growers that bread wheat contamination in durum must be controlled Bread wheat contamination in durum affects processing quality The Committee recognised the inherent difficulty of accurately assessing levels of bread wheat in durum. However it was felt that with the existing assessment method and existing varieties of bread wheat and durum, the assessment procedure is sufficiently accurate to provide meaningful results. It was therefore decided to retain the existing tolerances. 6. Proposed changes for adoption in 2010/ Proposed change for all cereals: Review the tolerances for all weed seeds For the past 12 months, the committee has been conducting an extensive review of the various weed seed categories in Standards. Generally the categories are the same for all cereals, with minor variations. The proposal is to alter the categories, weed seed lists within each category and tolerances to better reflect domestic and export market and quarantine requirements, to provide greater consistency across all grain commodities where feasible and to make the assessment process less complicated. Concurrently the difficulties and practicalities of weed control on-farm and removal from harvested grain are being considered. As the number of weed seeds and end-use of grain are varied, the review process has been extended. It is expected a draft paper will be provided to industry during 2009 for comment. As the review may propose extensive changes, there may be a requirement for extensive lead-time for implementation. Industry will be advised as further information becomes available. 6.2 Proposed change for all cereals: Review the Reference method for Screenings, including screen specifications, in all commodities in light of the practicality of production of screens for use in the field During discussions with industry in 2008 it was apparent there is not a reference screen size for all commodities. Reference screens are used for a number of reasons, including generation of field screens and in dispute resolution. A number of screens are used in the field and the variation in screen size, slot or hole size may lead to differences in results when assessing a sample. The Committee is currently developing guidelines for reference screens for all commodities, reflecting: What screens are currently used at each stage along the supply chain Screen specifications listed in customer contracts Practicalities of producing screens according to specifications Commercial screen manufacturer requirements The Committee welcomes feedback from industry on screens in use by commodity. Where possible, information provided should include the above and specific measurements of the screens in use, for example: screen dimensions (length, width, depth or circumference if round), sieve plate thickness, production material slot or hole shape (round, slot, triangular etc), length, width, shape of end of slots (round, square)
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