Newsroom
2003
CWB announces details on new payment option for durum
August 27, 2003
Winnipeg - The CWB today announced details about the Early Payment Option (EPO) for durum that will be launched Thursday, August 28 when the monthly 2003-04 Pool Return Outlook (PRO) is released.
The durum EPO enables farmers to lock in 90 per cent of the CWB’s PRO less a discount for administration, risk and time-value of money. It will function much the same as existing programs that are available for wheat and barley. However, there is one important difference: when farmers sign an EPO for durum, they will have to keep in mind that they are only guaranteed delivery on 80 per cent of the durum they commit to CWB delivery contracts. To ensure that they will be able to meet the terms of their EPO contract, they should not commit more than 80 per cent of the total tonnage that they will be signing up to Series A, B and C delivery contracts.
“Because we’re still uncertain on whether we will accept all of the durum that farmers will offer for sale this year, we’re doing the same thing with the EPO as with the durum Fixed Price Contract,” stated the CWB’s farmer-elected chair, Ken Ritter. “In both cases, farmers have been notified that if they sign a Producer Payment Option contract for durum, they are only guaranteed a certain level of deliveries. This way, they can make sound business decisions that are good for their farm.”
A guaranteed delivery of 80 per cent means, for example, that farmers who intend to sign up 1 000 tonnes of durum to CWB delivery contracts should not commit more than 800 tonnes to an EPO for durum. If the total delivery contract tonnage was 500 tonnes, the maximum committed to an EPO should be 400 tonnes.
Other important program details include:
- Farmers have until November 28, 2003 to sign up tonnage to the EPO for durum.
- Farmers can sign up as little as 20 tonnes to the program.
The introduction of an EPO for durum means that all four CWB pool accounts now offer farmers the opportunity to lock in a floor price for their grain and get more of their money up-front when they deliver it by signing an EPO.
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
Tel: (204) 983-4497