Prairie wheat and durum growers now have three extra months to make pricing decisions for the Canadian Wheat Board’s fixed price contract (FPC) and basis price contract (BPC) payment options.
The CWB on Thursday announced it has extended the sign-up period for both producer payment options (PPOs) to Jan. 31, 2011 for the 2010-11 crop year.
Signup for the 2010-11 FPC and BPC programs begins Feb. 22 this year, with the release of the CWB’s first 2010-11 pool return outlook (PRO), the board said in a release.
Under an FPC, Prairie wheat growers can set a flat price that can be locked in any day between Feb. 22, 2010 and Jan. 31, 2011. The price is set daily, based on the average price of western Canadian wheat already priced for sale by the CWB and the current market value of wheat yet to be priced.
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As the crop year progresses and an increasing amount of wheat sales are priced, the FPC values will adjust accordingly, as they reflect returns from actual CWB sales made throughout the year.
The BPC, meanwhile, allows enrolled farmers to lock in a total return for wheat by pricing basis and futures values separately. The futures component can be priced up to a year in advance of harvest. An adjustment factor is applied at sign-up to reflect sales already priced by the CWB.
Also new for 2010-11, growers will be able to apply previous deliveries to the pools to an FPC or BPC at the time of signup.
Also, on a basis-first BPC, farmers now can roll the basis between futures months as they become available. In September 2009, the basis lock-in deadline was aligned with futures lock-in so that both are priced by the basis contract month expiry. The buy-out formula was also simplified, the CWB said.
“Farmers asked for increased pricing flexibility through these programs,” CWB CEO Ian White said in Thursday’s release. “This enhancement means they will have more time to make informed choices for their business.”
