Newsroom
2003
CWB enhances farmers' payment options
February 10, 2003
Winnipeg – The CWB’s farmer-controlled board of directors has approved a series of enhancements to the Producer Payment Options (PPO).
These enhancements, developed with farmer input, provide farmers with more flexibility and pricing opportunities than ever before and build on the work that has been done since the PPOs were first introduced three years ago. The PPOs offer farmers a choice between the traditional pooling system and open market tools.
“Farmers interested in pricing alternatives identified enhancements to the options and we have made those key changes,” said Ian McCreary, an elected director and farmer in Bladworth, Saskatchewan. “The board of directors remains committed to providing pricing alternatives which allow farmers a real choice. Farmers who prefer the price pooling system remain unaffected by the new changes.”
The Fixed Price Contract (FPC) for wheat and feed barley and the Basis Payment Contract (BPC) for wheat will be launched one month earlier than in the past. The launch date is Monday, February 24. The FPC for durum will also be launched one month earlier, on April 24. The earlier launch date enables farmers to take advantage of the PPOs as soon as the wheat and feed barley Pool Return Outlooks for the 2003-04 year are announced.
Other changes include:
- Enabling farmers to exchange futures on BPCs. This will let them price the futures component of their basis contract throughout the day and prior to the official start date of the program.
- Changing the method for calculating the basis. The basis will be the Pool Return Outlook (PRO) minus the PRO forecasted futures less a discount for risk, time value of money and administration. This will make the basis more stable.
The FPC provides farmers with the opportunity to lock in a price for their wheat and feed barley in advance of the crop year. The FPC is comprised of the basis plus the relevant December future prices. Basis contracts enable farmers to lock in a basis or difference between the fixed price and the corresponding futures contract. At the time of contract sign-up, farmers also lock in the futures month to which the basis will apply. They have until the basis contract month expiry date to price the futures component of their contracts. Upon settlement, they get the total of the futures price plus the basis.
Additional program details are available on the CWB Web site, www.cwb.ca in the Farmer contracts and payments section. As well, farmers can contact the CWB’s Business Centre at 1-800-275-4292.
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 marketing costs, to Prairie farmers.
For more information, please contact:
Rhéal Cenerini
Communications consultant
Winnipeg, MB
tel: (204) 983-4497