The Canadian Wheat Board won’t select malting barley through its pool for any more new bulk export sales this year, but will rely instead on cash purchases.
This strategy is meant to help protect relatively high current pooled values for farmers’ designated barley, given recent international market price declines, the board said in a release Thursday.
The board announced most new malting barley business for the remainder of 2008-09 will be carried out using CashPlus, a CWB program that offers farmers an upfront cash price.
“By using CashPlus for the rest of the year, the CWB can help inject the price certainty that farmers want… whether they sold through the pools earlier or secure a cash value now,” CWB CEO Ian White said in the board’s release.
Including average freight deductions from Saskatchewan, the current CWB pool return outlook (PRO) for Special Select two-row malting barley is $5.50 a bushel, a projection well above last year’s record-high $5.13.
The CWB said it sold a “considerable quantity” of malting barley earlier in the current pool year, when international prices were $2 to $3 per bushel higher than they are today.
Since then, however, a “large volume” of high-quality barley from competing countries, particularly from the European Union, has come onto the market, pressuring prices downward.
The CWB said it’s on track for record bulk malting barley exports in 2008-09 of at least 1.4 million tonnes. Calling it “an extraordinary year for barley,” White said a “large volume” of Prairie malting barley has been selected for this pool.
And Prairie farmers, White said, “have now become aware that additional selection opportunities are limited due to the large, high-quality barley crop in Canada and around the world.”