Prairie wheat and barley growers who want to get in on the Canadian Wheat Board’s FlexPro pricing option for 2011-12, or to sign up for its fixed price contract (FPC) or basis price contract (BPC), now have until mid-March.
The board on Tuesday said it would widen the window to sign up for the 2011-12 FlexPro, allowing growers to sign up anytime between July 18 this year and March 15, 2012.
The sign-up window for the FlexPro contract, an option which offers a daily cash price throughout the crop year, was just six weeks for the 2010-11 crop year, from June 14 to July 30, 2010.
An “adjustment factor,” however, will apply to 2011-12 FlexPro contracts signed after the start of the crop year on Aug. 1, the CWB said.
“This change will enable farmers to fully assess the volume and quality of their crop before committing it to a FlexPro contract, if they choose,” the CWB said.
Producers taking part in FlexPro have until now committed tonnage during the sign-up window prior to the start of the crop year, and were then able to choose prices on any day throughout the year. (For 2010-11, for example, the pricing period is July 19, 2010 to July 29 this year.)
“At almost every meeting with farmers, CWB staff and directors have heard requests for change that would allow farmers to take advantage of FlexPro pricing without being exposed to significant production risk,” CWB chairman Allen Oberg said in the board’s release Tuesday.
With seeding and harvest delayed across much of the Prairies this year, the extended sign-up deadline could be especially valuable, he said, as many farmers still face “highly uncertain” crop prospects after the end of this month.
Meanwhile, the sign-up deadline for the FPC and BPC programs for the 2011-12 crop year will also be extended to March 15, 2012, from January 31.
The “adjustment factor,” also used in the FPC and BPC, is meant to account for actual CWB sales activity, the board said.
The CWB hedges the price risk of each contract from the time of sign-up to completion of CWB sales at the end of the pool period. However, the board said, pricing options such as FlexPro don’t operate in isolation from CWB pricing of actual grain sales.
“The CWB markets farmers’ wheat together, regardless of whether it is priced by a producer through a (producer payment option) or average-priced through the pools,” the board said.
“The impact of the previously priced wheat must be reflected by the adjustment factor — which becomes increasingly important as the year progresses.”