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Canadian Wheat Board

Prairie strong, worldwide

Farmers

Pre-delivery top-up

What is it?

The sign-up deadline was October 31, 2006.

Program information

All classes of wheat and Identity Preserved Contract Program (IPCP) wheat are eligible for the 2006-07 PDT program. All durum classes are eligible, including No. 1 and 2 CWAD AC Navigator, and No. 1, 2 and 3 CWAD AC Strongfield. Grades not eligible for this program include No. 4 CWRS, No. 4 CWHWS, No. 3 CWSWS, CW Feed, No. 4 CWAD, No. 5 CWAD, AC Commander, sample grades and mixed grain.

The pre-delivery installment is $30 per tonne for wheat and $30 per tonne for durum committed to the contract program.

Note: In recent years, the CWB has not accepted all of the durum offered by producers, therefore, it is recommended that producers do not take the PDT on 100 per cent of their durum production.

Producers using the PDT program will be responsible for all costs associated with the program, such as risk management, administration costs and time value of money.

The PDT program is not a cash advance and repayment will not be made at the time of delivery. It will be repaid through subsequent payments made to you by the CWB in accordance with your deliveries.

How does it work?

Step 1:

You take a cash advance on eligible tonnes of wheat and/or durum.

Step 2:

You sign up this tonnage to a special CWB contract delivery series (Series M).

Step 3:

You receive the CWB’s PDT on the same tonnage, directly from the CWB.

Step 4:

You deliver your wheat and/or durum when it is called.

Step 5:

You reimburse the PDT (plus interest at prime) through the CWB adjustment, interim and final payments.

EXAMPLES

Example #1

Producer takes out a cash advance on all eligible stocks of wheat:
On their cash advance application, John Producer declares 200 tonnes of wheat stocks. He takes an advance on the entire tonnage. John applies for a Pre-delivery Top-up on the entire 200 tonnes. The CWB creates a Series M contract for 200 tonnes of CWES. With the top-up rate set at $30 per tonne, he receives $6,000 in addition to his cash advance.

Example #2

Producer takes out a cash advance on only a portion of eligible wheat stocks:
On his cash advance application, Joseph Producer declares 500 tonnes of wheat stocks. He actually takes the advance on half of this amount (250 tonnes). Joseph applies for a Pre-delivery Top-up for 250 tonnes. The CWB then creates a Series M contract for 250 tonnes. With the top-up rate set at $30 per tonne, he receives $7,500 in addition to his cash advance.

Example #3

Producer’s eligible wheat stocks are reduced following a yield analysis:
On their cash advance, Paul and Mary Smith declare 1 000 tonnes of wheat stocks. They wish to take an advance on the full amount. Paul and Mary applies for a Pre-delivery Top-up on the entire 1 000 tonnes. However, following a yield analysis which is routinely done on cash advance applications, it is determined that the maximum tonnage upon which an advance can be taken is 600 tonnes. Paul and Mary receive the Pre-delivery Top-up on this amount of CWRS. With the top-up rate set at $30 per tonne, they receive $18,000 in addition to their cash advance. The CWB then creates a Series M contract for 600 tonnes and a Series A for 400 tonnes.

Example #4

Producer has stocks of both durum and wheat:
On her cash advance application, Alice Jones declares 100 tonnes of durum and 100 tonnes of CWRS wheat. She actually takes her advance on the full 200 tonnes. Alice then applies for a PDT for her 100 tonnes of durum and receives a Series M contract on this durum. With the top-up rate set at $30 per tonne, she receives $3,000 in addition to her cash advance.

Sign-up information