Newsroom
2002
August 19, 2002
CWB recommends further adjustment on 2002-03 initial payments
Winnipeg -- The Canadian Wheat Board (CWB) today announced it has recommended significant increases to the 2002-03 initial payments for designated barley, at $41 to $43 per tonne. The CWB has also recommended increases on wheat, durum wheat and feed barley.
Following the July 31 announcement of the 2002-03 initial payments for the various grades of wheat and barley, the CWB made an immediate request for an adjustment since the initial payments did not take into account the severe crop deterioration in North America and the corresponding rise in prices. With today's announcement, the Government of Canada will now review these revised recommendations.
Today's announcement is the result of further significant declines in the crop prospects in Western Canada, the U.S. and Australia, as well as mounting concerns around the quality of the wheat and barley crops in some areas of the European Union (EU).
The CWB's recommendation of a $41-$43 per tonne ($0.89 - $0.94 per bushel) increase for designated barley is a reflection of the reduced barley crop projection for Western Canada, some continuing crop development problems in Australia and rain during harvest in parts of the EU. Barley production is projected to fall to 7.8 million tonnes, a 24-per-cent decrease from 2001-02 and four million tonnes lower than the five-year average.
The adjustment in the designated barley initial payments reflects realized and anticipated strength in prices in the malting barley markets, especially in North America. The adjustment, along with the Pool Return Outlook (PRO), are intended to provide a more up-to-date signal of returns to producers who will be making their barley marketing decisions for 2002-03.
Initial payments represent the first portion of the returns farmers can expect from the sale of their grain over the entire pool year. The Government of Canada guarantees initial payments. Initial payments are set in relation to the PRO and, as such, they will vary from year to year according to changing market conditions. During the crop year, the CWB reviews the initial payments on a regular basis and recommends adjustment payments as soon as market conditions and sales progress warrant.
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 company sells grain to almost 70 countries and returns all sales revenue, less marketing costs, to Prairie farmers.