Newsroom
2002
May 13, 2002
CWB expands payment options for durum and wheat growers
Winnipeg - The CWB today announced more marketing choices for farmers for their 2002-03 crop. A new Fixed Price Contract (FPC) for durum will be offered on a trial basis and the Early Payment Option will be extended to all classes of wheat.
"Farmers told us that they value the choice and the flexibility that payment options provide," stated Ken Ritter, Chairman of the CWB's farmer-controlled Board of Directors. "We've listened and expanded these programs so that farmers have more control over how their crops are priced and when they receive payment."
The FPC for durum will be offered starting with the announcement of the Pool Return Outlook (PRO) on May 23, 2002. It will enable farmers to lock in a price on a portion of the durum that they plan to commit to CWB delivery contracts in 2002-03. Like the existing FPC that the CWB offers for wheat, the FPC values for durum will be based on the PRO less a discount for risk, time value of money and program administration costs. The fixed price will be available daily via the CWB Web site, through Fax on demand or by calling the CWB toll-free line. When farmers deliver to an elevator durum that has been assigned to an FPC, they will receive the initial payment. An additional payment, representing the difference between the initial payment and the fixed price, will be issued by the CWB within two weeks of delivery or settlement. These deliveries will be outside the durum pool and therefore will not be eligible for adjustment, interim or final payments.
The durum FPC will be offered as a pilot program in 2002-03. Limited opportunities for hedging in the durum market mean that contracted tonnage will be capped between 50 000 and 100 000 tonnes and accepted on a first-come, first-serve basis. It is hoped that in future years, contracted tonnage can be increased.
As well, farmers need to carefully consider the volume of durum that they will commit to an FPC. The CWB will guarantee that farmers signing an FPC will be able to deliver at least 75 per cent of the durum that they assign to 2002-03 delivery contracts up to the total tonnage committed to the FPC. For example, a farmer who will have a total 1000 tonnes to assign to CWB delivery contracts in the fall of 2002 should commit no more than 750 tonnes to an FPC for durum.
With the expansion of the Early Payment Option (EPO) to all classes of wheat (excluding durum) beginning August 1, 2002, farmers will be able to lock in 90 per cent of the PRO for their crop, less a discount for risk, time value of money and program administration charges. Prior to this expansion, only Canada Western Red Winter and Canada Western Soft White Spring wheat were eligible for the EPO.
When farmers deliver grain committed to an EPO, they receive the initial payment. Then, within two weeks of delivery, they receive an additional payment to bring their total returns up to 90 per cent of the PRO. Participants in the EPO remain in the pool account. If adjustment, interim or final payments rise above the value that they have obtained under the EPO, these farmers receive the additional payments.
More information on the durum FPC and the expanded EPO is available on the CWB Web site at www.cwb.ca. Farmers may also call the CWB's toll-free line at 1-800-275-4292, they may get in touch with the CWB's Fax on demand service at 1-800-665-8751 or they may contact their local Farm Business Representative.
Controlled by western Canadian farmers, the CWB is the largest wheat and barley marketer in the world. As one of Canada's biggest exporters, the Winnipeg-based organization sells grain to more than 70 countries and returns all sales revenue, less the costs of marketing, to Prairie farmers.