The initial payments to Prairie farmers for their 2008-09 wheat, durum and malting barley through the Canadian Wheat Board (CWB) have been raised.
The CWB announced Monday it had picked up approval from the federal government, which guarantees CWB initial payments, for an upward adjustment.
The increase in initials for all classes and grades of milling wheat adds $30 per tonne, for example, to the original initial payment of $213 per tonne for No. 1 Canada Western Red Spring wheat. The original initial payment took effect for Aug. 1, 2008.
An increase in the initials for all grades of durum wheat adds $25.80 per tonne, for example, to the initial for No. 1 CW Amber Durum, which was originally set at $250 per tonne.
Initials for designated barley have also risen by $39 per tonne, putting the new initial for Select CW two-row designated barley at $293 per tonne and for Select CW six-row at $273 per tonne.
Farmers who delivered wheat, durum and/or designated barley to the CWB between Aug. 1, 2008 and Wednesday (Feb. 18) will get an adjustment payment, to be mailed by March 6 or direct-deposited March 3.
Farmers who wish to defer the adjustment payments have until Feb. 25 to notify the CWB.
Initial payments represent a portion of the returns farmers can expect from the sale of their grain over the entire year, and aren’t to be confused with the CWB’s monthly pool return outlooks (PROs), which are CWB estimates of farmers’ total returns from each pool account. The next 2008-09 PRO is scheduled for Feb. 26.
The CWB regularly reviews its initial payments and recommends adjustment payments if market conditions and sales progress warrant. The federal government then approves the level at which the initials are set.
The 2008-09 PROs for designated barley have come under fire in recent weeks after the CWB announced in late January that it would cordon off its 2008-09 malting barley pool from most further business, so as to help protect relatively high current pooled values for designated barley, given recent international market price declines
Instead, the CWB said, it would source most of its bulk malting barley for the remainder of 2008-09 using CashPlus, a board program that offers farmers an upfront cash price.
Federal Agriculture Minister Gerry Ritz was reported to have recently suggested during an appearance before the House of Commons’ standing committee on agriculture that the CWB’s decision was not within its mandate.
But CWB chairman Larry Hill said in a separate bulletin Monday that the decision indeed falls within the CWB’s purview and “protects existing PRO values while providing farmers with clear price signals.”
As well, the Western Barley Growers Association said in a release Monday that it “does not dispute that closing off the (malting barley pool account) was a good business decision by the CWB,” according to new WBGA president Brian Otto.
Following up on the WBGA’s previous comments that its members had been “blindsided” by the decision to block off the pool, Otto said malting barley prices have indeed “declined significantly since harvest and we agree this closure should improve the net returns to those barley producers who are participated in the early malt pool.”
But the pro-deregulation WBGA, which wrapped up its annual convention Friday in Calgary, now questions why the CWB didn’t then create a “Pool B” for malting barley, “for those who would still like to participate in pooling, instead of leaving producers with the only other alternative, Cash Plus,” Otto said.
“Closing the pool early without any warning and not offering another pool as they would normally do seems very arbitrary,” said Otto, who farms at Warner, Alta., southeast of Lethbridge.
The CWB also announced Monday it will release its first PRO for the 2009-10 crop year on Feb. 23 during the GrainWorld conference in Winnipeg, as part of the conference’s wheat market outlook session. Sign-up for 2009-10 fixed price contracts (FPCs) begins Feb. 23 at 3 p.m. CT, after the new PRO is released, the CWB said.