Wheat price estimates based on CWB September PRO
No. 1 CWRS 13.5
No. 3 CWRS 13.0
No. 1 CPSR
No. 1 CWRW Select
CW Feed Price (FOB Vancouver)
Less average Alberta deductions (Insert number for your province.)
Less trucking freight to elevator or buyer
Price at the bin
If there was any year to take heed of one of my grain marketing rants, “Get your wheat tested for protein,” it’s this year. Protein levels for any type of wheat run the gamut and the prepared grain producer can take advantage of certain pricing specifications and opportunities for off-board feed wheat.
On September 24, the Canadian Wheat Board (CWB) announced the newest Pool Return Outlook (PRO), which can be used to compare against off-board feed wheat markets. In the table, I review price at the bin for some of the more common types and grades.
Here’s an example of a producer from the Innisfail area. This year, he has CWRS, CPSR and winter wheat to market. The hard red spring (CWRS) has been graded No. 1 with 16 per cent protein. The prairie spring red (CPSR) is also No. 1. And the winter wheat was graded as feed due to frost damage, but pulled out protein levels of 14 per cent. What are some of the off-board options?
Today, the best route for high quality wheat with extremely high protein is to keep it with the CWB. When the September PROs were released, the price estimate for No. 1 CWRS with very high protein levels actually increased. However, if the producer was to sell a hard red spring type of wheat off-board, based on 58 pounds or more per bushel and 13 per cent protein, he could obtain a solid bid of $4.62 per bushel at the bin.
With almost any type of feed wheat, based upon specifications of only 58 pounds and dry (no protein required), this farmer could have it picked up at the bin for $3.90 per bushel.
The winter wheat with high protein would give the producer $4.35 per bushel at the bin to take right to the bank.
There are pros-and-cons for each situation. When signing product to the CWB, there’s always the hope that, eventually, markets will turn around and the prices increase. If that happens, the producer is still in the pool for a better return later. Alternatively, if the markets continue to slide downwards, so might the CWB price. Plus, depending upon what is “called,” even if the producer would like to move 200 tonnes of wheat, he might initially only able to haul 25 per cent of those 200 tonnes to the elevator.
With off-board pricing in the cash market, what you price is what you get. There will be no price increase down the road on what you already sold if the markets happen to turnaround six months from now. On the other hand, everything the producer would like to move can move.
Some buyers buy off-board feed wheat based only upon weight and moisture, others include protein specifications, and a small minority are even variety specific. For wheat contracted through the CWB, you need to “Know your wheat,” as the Canadian Grain Commission’s campaign declares. If you want wheat graded as any class other than feed, a registered variety must be delivered. When an elevator agent asks, “What variety is this?” an answer of, “I don’t know, whatever my neighbour grew last year” is simply not going to suffice.
TO GET A CGC GRADE…
A Canadian Grain Commission grading certificate will show grade, dockage, moisture, and protein (upon request). You must submit a sample of at least 750 grams. Here’s what else you need to provide in order to get a CGC grade:
Complete a “Producer request for inspection services” form or include a written request stating the services you want.
Pay by cash, cheque (payable to Receiver General of Canada), VISA or MasterCard.
Mail or drop off samples to the nearest CGC grading facility. In Alberta, the address is: Canadian Grain Commission 14, 6130 — 4th Street SE, Calgary AB T2H 2B6 Phone: 403-292-4210
Costs per sample are: Wheat $15.10, canola $24.40, other grains and screenings $21.70 (including pulses), protein testing $9.00.
One more alternative to move off-board feed wheat is to load producer cars. There are a number of buyers in British Columbia, for example, who regularly purchase their commodities in this fashion. For grain producers in the Peace Country, this is a particularly interesting option.
Best of luck with harvest and ensure you “know your wheat” BEFORE you begin marketing it.
Shelley Wetmore is owner of Market Master, a feedgrain brokerage and consulting service based in Edmonton. You can reach her toll free at 1-800-440-8390 or visit www.grain-watchdog.com.