Farmers
2007-08 Delivery Exchange Contract
The Delivery Exchange Contract (DEC) enables farmers to trade delivery periods with one another to suit their own business needs. Launched as a pilot program is 2006-07, the DEC program provides greater control over delivery timing, and enables farmers to know acceptance and delivery periods in advance. In 2007-08, the program is available prairie wide to farmers delivering No. 1, No. 2, No. 3 or No. 4 Canada Western Red Spring wheat (CWRS).
Program details:
- 100 per cent acceptance, similar to Guaranteed Delivery Contracts.
- Farmers are expected to deliver 100 per cent of their contract.
- Delivered grade and protein must match contracted grade and protein.
- Sign-up on a first-come, first-served basis until October 31, 2007 or earlier if the volume limit of 500,000 tonnes is reached.
Farmers can sign up in 80 tonne increments which will then be assigned equally to four delivery periods:
- August 1-November 30 (Period 1)
- November 1-January 31 (Period 2)
- February 1-April 30 (Period 3)
- May 1-July 31 (Period 4)
New for 2007-08, the first delivery period will run until November 30, overlapping in November with the second period, to provide more time to better accommodate the transition from old crop supplies to newly harvested grain.
For example, Producer A commits 160 tonnes of 1 CWRS 13.5 and higher to a DEC. The CWB will then allocate 40 tonnes to each delivery period as follows:
| Delivery period | |||||
|---|---|---|---|---|---|
| Grade and protein | Net tonnes | Period 1 | Period 2 | Period 3 | Period 4 |
| 1 CWRS 13.5 and higher | 160 | 40 | 40 | 40 | 40 |
Producer A can now either deliver the 40 tonnes in each appropriate delivery period or offer to trade these tonnes with another farmer into other delivery periods. For example, if Producer A would like to deliver 160 tonnes in Period 1, they would need to find another farmer (or farmers) who are willing to trade their Period 1 delivery opportunity for Period 2, Period 3, and Period 4. To deliver 160 tonnes in Period 1, Producer A’s delivery periods will appear as follows:
| Grade and protein | Net tonnes | P1 | P2 | P3 | P4 |
|---|---|---|---|---|---|
| 1 CWRS 13.5 and higher | 160 | 160 | 0 | 0 | 0 |
Farmers who sign up for DECs should ensure they know the quality of grain they are committing as misgrades are not part of the program. However, if a farmer signs up under DEC and later determines that the grade is different than what was signed up, they will need to find another farmer in an opposite position with whom to trade. Farmers should work with their grain company to deliver the grain within the delivery period.
When can I sign up?
Sign-up has ended as of 7:30 a.m. November 1, 2007. The following grade and protein categories were eligible for the program.
| Contract code | Grade and protein category |
|---|---|
| E1 | No. 1 CWRS 13.5 and higher |
| E5 | No. 1 CWRS 13.4 and lower |
| F1 | No. 2 CWRS 13.5 and higher |
| F5 | No. 2 CWRS 13.4 and lower |
| G1 | No. 3 CWRS |
| G5 | No. 4 CWRS |
After the sign-up application has been processed, a confirmation letter will be sent to the farmer outlining the grade and tonnes committed under each of the four delivery periods. Farmers will be able to view their contracted tonnes under the DEC program through the CWB Web site e-Services link.
Trading
If farmers are interested in offering to trade their DEC tonnes to other delivery periods, they can phone the CWB at 1-800-275-4292 with their PIN, complete the DEC offer to trade (PDF format 65 KB) form and fax it to the CWB at 1-204-983-8031, or work with their elevator agent. The information provided on the form will be used by the CWB to post offers on the CWB Web site and to communicate contact information to other farmers who are interested in making a trade. By signing the form or providing the information over the telephone, farmers consent to the release of their name, telephone number and e-mail address.
Farmers who are interested in trading can view offers to trade on the Summary of Offers for Delivery Exchange Contracts link in the related information box on the right side of this page.
If there is an offer that the farmer is interested in, they can contact the CWB Business Centre at 1-800-275-4292 to obtain a list of farmer names, phone numbers and e-mail addresses. Farmers must make their own arrangements for trading their delivery periods with another participating farmer.
Once an agreement to a trade is made, both farmers must complete and sign the DEC trade agreement (PDF format 59 KB). For example, Producer A would complete their section of the form and sign the document on the corresponding line. Producer A then faxes the form to Producer B, who must also complete their section of the form and sign the document (both signatures must appear on one form). To complete the trade, this form must be faxed to the CWB.
Once the trade is processed, each farmer will receive a confirmation letter indicating their current tonnes in the DEC program. Farmers can view their contract tonnes by delivery period on e-Services. Grain companies will also be able to view contracts to ensure they can accept delivery of the DEC and to record the correct contract number on the cash ticket.
To view Offer to Trade Examples, see below.
Example 1:
This producer wants to trade 60 tonnes from period 1 to period 3.
| Offer | Require | |||||||
|---|---|---|---|---|---|---|---|---|
| 20 tonne increments | Enter the contract code (e.g. E1) for the grade and protein category you are offering in the appropriate delivery period box(es) | Enter the contract code (e.g. E1) for the grade and protein category you require in the appropriate delivery period box(es) | ||||||
| Tonnes | Period 1 | Period 2 | Period 3 | Period 4 | Period 1 | Period 2 | Period 3 | Period 4 |
| 60 | E1 | E1 | ||||||
Example 2:
This producer wants three separate trades of 20 tonnes each from delivery periods 1 and 2 and 3 into period 4.
| Offer | Require | |||||||
|---|---|---|---|---|---|---|---|---|
| 20 tonne increments | Enter the contract code (e.g. E1) for the grade and protein category you are offering in the appropriate delivery period box(es) | Enter the contract code (e.g. E1) for the grade and protein category you require in the appropriate delivery period box(es) | ||||||
| Tonnes | Period 1 | Period 2 | Period 3 | Period 4 | Period 1 | Period 2 | Period 3 | Period 4 |
| 20 | E1 | E1 | ||||||
| 20 | E1 | E1 | ||||||
| 20 | E1 | E1 | ||||||
Example 3:
This producer wants one trade of 40 tonnes from delivery period 1 or 2 or 3 into period 4.
| Offer | Require | |||||||
|---|---|---|---|---|---|---|---|---|
| 20 tonne increments | Enter the contract code (e.g. E1) for the grade and protein category you are offering in the appropriate delivery period box(es) | Enter the contract code (e.g. E1) for the grade and protein category you require in the appropriate delivery period box(es) | ||||||
| Tonnes | Period 1 | Period 2 | Period 3 | Period 4 | Period 1 | Period 2 | Period 3 | Period 4 |
| 40 | E1 | E1 | E1 | E1 | ||||
Example 4:
This producer wants one trade of 40 tonnes from delivery period 1 into period 2 or 3.
| Offer | Require | |||||||
|---|---|---|---|---|---|---|---|---|
| 20 tonne increments | Enter the contract code (e.g. E1) for the grade and protein category you are offering in the appropriate delivery period box(es) | Enter the contract code (e.g. E1) for the grade and protein category you require in the appropriate delivery period box(es) | ||||||
| Tonnes | Period 1 | Period 2 | Period 3 | Period 4 | Period 1 | Period 2 | Period 3 | Period 4 |
| 40 | E1 | E1 | E1 | |||||
Example 5
This producer wants to trade the grade and protein of his Delivery Exchange Contract.
| Offer | Require | |||||||
|---|---|---|---|---|---|---|---|---|
| 20 tonne increments | Enter the contract code (e.g. E1) for the grade and protein category you are offering in the appropriate delivery period box(es) | Enter the contract code (e.g. E1) for the grade and protein category you require in the appropriate delivery period box(es) | ||||||
| Tonnes | Period 1 | Period 2 | Period 3 | Period 4 | Period 1 | Period 2 | Period 3 | Period 4 |
| 160 | F5 | E5 | ||||||
| 160 | F5 | E5 | ||||||