August 23, 2001

Suggested Dockage Regulations May Not be Needed

Dockage levels in U.S. wheat exports have been an area of continuing discussion, with many importing countries requiring more stringent limits on dockage, and USDA recently proposed programs to support development of cleaning capabilities at export facilities. These factors have led to debate about including dockage as a grade-determining factor in U.S. grain standards.

A report by William Wilson and Bruce Dahl of the Department of Agribusiness and Applied Economics at North Dakota State University indicates that the marketing system is currently working effectively and that proposed regulations would replicate what the market is already moving toward.

"The marketing system with regard to quality valuation and dockage in particular are been working fairly effectively," Wilson says. "This is a result of more educated commercial buyers and competition among exporting firms."

Wilson says dockage is being removed at points in the system where it is most efficient, and levels of dockage in export shipments are declining. This is especially true for hard red spring and hard red winter wheats and for shipments from Pacific Northwest ports.

Elevators in the hard red spring wheat producing area are adjusting to tighter dockage specifications by increasing their cleaning capacity and cleaning most of the grain received.

"No doubt this is evolving toward a pricing structure in which the added cost of cleaning is being absorbed partly by buyers specifying cleaned wheat, and partly be elevators and to a limited extent by growers in the form of discounts," says Wilson.

Any proposal regulating dockage would require more cleaning than is presently done, he says. This would increase costs, ultimately resulting in discounts to growers. Also there is a risk that some buyers would shift grades purchased to lower their costs.

The conventional approach to changing U.S. grade standards has been to provide accurate testing of easily measurable factors like protein or dockage and to develop acceptable limits for others that are not easily measured, like food safety or end-use performance.

"Imposing factor limits on dockage is a radical departure from the generally followed approach to regulation," Wilson says. "In this case a regulation is being imposed on a problem easily solvable within the marketing system."

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Source: William Wilson, (701) 231-7472,bwilson@ndsuext.nodak.edu
Editor: Gary Moran, (701) 231-7865, gmoran@ndsuext.nodak.edu