1 Facilitating the Marketing of America’s Grain Grain Inspection, Packers and Stockyards...

11

Facilitating the Marketing Facilitating the Marketing of America’s Grainof America’s Grain

Grain Inspection, Packers and Stockyards Grain Inspection, Packers and Stockyards Administration Administration

John B. PitchfordJohn B. PitchfordDirector of International AffairsDirector of International Affairs

Grain Inspection, Packers & Stockyards AdministrationGrain Inspection, Packers & Stockyards AdministrationNovember 15, 2004November 15, 2004Berkeley, CaliforniaBerkeley, California

22

Federal Grain Inspection Federal Grain Inspection ServiceService

U.S. Grain Standards ActU.S. Grain Standards ActAgricultural Marketing ActAgricultural Marketing Act

U.S. Department of AgricultureU.S. Department of AgricultureGrain Inspection, Packers and Stockyards AdministrationGrain Inspection, Packers and Stockyards Administration

33

MissionMission

To To facilitate the marketingfacilitate the marketing ofof livestock, poultry, meat, livestock, poultry, meat, cereals, cereals, oilseeds, and related agricultural oilseeds, and related agricultural products,products, and promote fair and and promote fair and competitive trading practices for the competitive trading practices for the overall benefit of consumers and overall benefit of consumers and American agriculture.American agriculture.

44

Core Business PracticesCore Business Practices

Provide the market with terms and Provide the market with terms and methods for quality assessmentsmethods for quality assessments

Protect the integrity of U.S. grain and Protect the integrity of U.S. grain and related marketsrelated markets

Provide official grain inspection and Provide official grain inspection and weighing services for American agricultureweighing services for American agriculture

55

Service ProvisionService Provision

Terms (i.e., grades/standards)Terms (i.e., grades/standards) Maintain grading standards for grains, Maintain grading standards for grains,

rice, beans, peas, and lentils rice, beans, peas, and lentils Analytical MethodsAnalytical Methods

Maintain over 1,400 methods of analyses Maintain over 1,400 methods of analyses Official Inspection SystemOfficial Inspection System

Annually certify the quality and quantity of Annually certify the quality and quantity of 96.5 million metric tons of grain exported to 96.5 million metric tons of grain exported to more than 130 countries around the worldmore than 130 countries around the world

66

Grain & Oilseed Marketing Grain & Oilseed Marketing ChannelsChannels

CommodityCommodity EasilyEasilyMeasuredMeasuredAttributesAttributes

VarietyVarietySpecificSpecific

Absence ofAbsence ofAttributeAttribute

OrganicOrganicPharmaceuticalsPharmaceuticals

$ $Value of product differentiation

The U.S. grain market ranges from the commodity market The U.S. grain market ranges from the commodity market to the very high value added identity preservation system. to the very high value added identity preservation system. Between these two extremes lies an evolving market of Between these two extremes lies an evolving market of greater product differentiation driven by technology, greater product differentiation driven by technology, consumer demands, and global competition.consumer demands, and global competition.

E EMarket efficiency

77

Commodity EasilyMeasuredAttributes

VarietySpecific

Absence ofAttribute

OrganicPharmaceuticals

Commodity MarketHigh volumeLow margins

U.S. Grain StandardsGrain typeClassSubclassQuality

Yellow cornWhite cornSoybeansHard Red Winter WheatHard Red Spring WheatSoft Red Winter WheatSoft White WheatHard White WheatGrades 1 - Sample

Practical Market DrivenThresholds/TolerancesMixed Grain > 10%Lower GradeWOCL U.S. # 1 < 2% U.S. # 2 < 5%

Testing: rapid (minutes), accurate (USDA reference), reliable, inexpensive.


Multiple commodities coexist in current market

88


VarietySpecific

Absence ofAttribute



• 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.

99


VarietySpecific

Absence ofAttribute


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


1010

•Market/Customer Defined•Documentation•Testing•Process-based


VarietySpecific

Absence ofAttribute


• New evolving market• Small volume• High risk• Premiums


1111


VarietySpecific

Absence ofAttribute


• High value specialty market• U.S. Standards

• Processed-based• Audit and certification


1212


VarietySpecific

Absence ofAttribute

Organic

• Small very high value market • Produced and processed under government permit and oversight


Pharmaceuticals

1313


VarietySpecific

Absence ofAttribute

Organic


Pharmaceuticals

Facilitate marketing beyond the traditional commodity markets

• Quality Standards• Testing Technology• Process-based systems• Harmonization

1414

Quality StandardsQuality Standards

Maintain standards that reflect the Maintain standards that reflect the evolving market needsevolving market needs

New crops – e.g., Hard White WheatNew crops – e.g., Hard White Wheat New agronomic practices – e.g., herbicide New agronomic practices – e.g., herbicide

resistant cropsresistant crops New quality attributes – e.g., low linolenic New quality attributes – e.g., low linolenic

soybeanssoybeans New ways of measuring existing quality New ways of measuring existing quality

attributes – e.g., wheat protein qualityattributes – e.g., wheat protein quality

1515

Testing TechnologyTesting Technology

Improve the ability to differentiate end-Improve the ability to differentiate end-use qualityuse quality

Identify key quality attributesIdentify key quality attributes Establish consensus on reference methodsEstablish consensus on reference methods Transfer reference method to market-relevant Transfer reference method to market-relevant

rapid analytical toolrapid analytical tool Establish consensus (national/international) on Establish consensus (national/international) on

reporting quality resultsreporting quality results

Examples:Examples: Extractable and fermentable starchExtractable and fermentable starch Protein qualityProtein quality Amino acid profileAmino acid profile Wheat baking quality Wheat baking quality

1616

Process-based SystemsProcess-based Systems

Support marketing systems based on Support marketing systems based on quality management processesquality management processes Company or organization develops Company or organization develops Quality Quality

Policy, Quality Objectives, and Quality Policy, Quality Objectives, and Quality Procedures to meet customer demandsProcedures to meet customer demands

USDA verifies adherence to the Quality USDA verifies adherence to the Quality Management System through third-party Management System through third-party audits based on ISO 9001 requirementsaudits based on ISO 9001 requirements

Company or organization may market their Company or organization may market their process or product as “USDA Process Verified”process or product as “USDA Process Verified”

1717

HarmonizationHarmonization

Provide technical assistance to minimize market Provide technical assistance to minimize market disruption due to quality standards and regulationsdisruption due to quality standards and regulations

Ensure that quality assessments are accurate and Ensure that quality assessments are accurate and reliable, and that all parties involved understand reliable, and that all parties involved understand how quality is defined and measuredhow quality is defined and measured

Misunderstandings or disagreements about the Misunderstandings or disagreements about the meaning of basic quality terms, or misuse of quality meaning of basic quality terms, or misuse of quality terms, can result in costly marketing disruptionsterms, can result in costly marketing disruptions

1818

ConclusionConclusion

Quality standards must reflect changing Quality standards must reflect changing market needsmarket needs

Testing technology needs to keep pace with Testing technology needs to keep pace with new quality attributesnew quality attributes

Process verification of quality management Process verification of quality management systems can further facilitate tradesystems can further facilitate trade

Harmonization of the terms and Harmonization of the terms and measurement of quality promotes efficient measurement of quality promotes efficient tradetrade

Accurate and reliable application of standards Accurate and reliable application of standards and technology are essentialand technology are essential

1 Facilitating the Marketing of America’s Grain Grain Inspection, Packers and Stockyards...

Documents

Transcript of 1 Facilitating the Marketing of America’s Grain Grain Inspection, Packers and Stockyards...