Newsroom
2001
July 27, 2001
CWB ANNOUNCES 2001-02 INITIAL PAYMENTS BY
GRADE
Winnipeg -- The Canadian Wheat Board (CWB) today
announced the 2001-02 initial payments for the various grades of
wheat and barley. The payments are effective August 1, 2001 for
deliveries into the 2001-02 pool accounts.
All 2001-02 initial payment values are higher than the initial
payments for 2000-01. The representative grade for wheat is $20 per
tonne above last year's value, durum is up $26 per tonne, feed
barley is up $15 per tonne and designated barley is up by $17 to
$22 per tonne. The initial payments, in dollars per tonne, for
representative grades in each pool account are listed below. A
complete listing of payments for all grades in dollars per tonne
and dollars per bushel is posted on the CWB Web site (under the
payments link) at www.cwb.ca.
| Grade | 2001-02 Initial Payment |
2000-01 Initial Payment |
|
| Wheat | No. 1 Canada Western Red Spring 12.5 | $160 | $140 |
| Durum | No. 1 Canada Western Amber Durum 12.5 | $169 | $143 |
| Feed Barley | No. 1 Canada Western | $110 | $95 |
| Designated Barley | Special Select Canada Western Two-Row | $164 | $142 |
| Designated Barley | Special Select Canada Western Six-Row | $136 | $119 |
Starting with the 2001-02 crop year, the CWB has introduced
protein payments for higher protein No. 3 Canada Western Red Spring
(CWRS) wheat. Farmers will now be paid for each 0.1 per cent
increment between 13.0 and 14.5 per cent protein.
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 the payments and since 1993 has
made efforts to increase the values as quickly as possible.
As initial payments are set in relation to world prices, they will
vary from year to year according to changing market conditions.
Those market conditions are explained in the attached commentary.
Initial payments should not be confused with monthly Pool Return
Outlooks (PROs) which are the CWB´s estimates of year-end
returns in each of the pool accounts.
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 more
than 70 countries and returns all sales revenue, less marketing
costs, to Prairie farmers.
Market Outlook for the 2001-02 Crop
Year
Wheat (excluding durum
wheat)
Wheat returns in the 2001-02 crop year are expected to average
slightly above returns experienced in 2000-01 as global wheat
stocks, particularly those in the U.S. and the European Union (EU),
tighten significantly. The United States Department of Agriculture
(USDA) is projecting global wheat ending stocks to fall
substantially in 2001-02 as world wheat consumption is projected to
outstrip production for the third year in a row. The world wheat
trade is forecasted to strengthen in 2001-02 to its second highest
level since 1992-93. Lower demand projections for the Middle East,
Latin America, the Commonwealth of Independent States (CIS) and
Baltics, as well as Africa, are expected to be more than offset by
increased imports into the Asia-Pacific region. Australia and
Argentina are expected to maintain historically large wheat areas
and production levels, although Australia is experiencing some
difficulties due to adverse weather. However, due to lower
production in the U.S., EU and Canada, aggregate wheat stocks in
the five major exporters are also projected to decline
substantially by the end of 2001-02. The potential for a
considerable rise in wheat prices during 2001-02, particularly in
the lower quality wheat segment, is limited as the minor exporters
become more active.
Durum Wheat
World durum import demand is forecasted to improve slightly in
2001-02 as late season dryness in parts of the EU and North Africa
tempered production potential in these importing regions. Moreover,
lower seeded area, coupled with drought in Western Canada, has
significantly reduced production potential. U.S. production is also
expected to drop as poor quality over the past two years and
elimination of the American´s Crop Revenue Coverage program
reduced seeded area. As a result, price prospects are better than a
few months ago. However, in aggregate, large carry-in stocks
coupled with a moderate decline in production are expected to
result in only a slight reduction in major exporter supplies in
2001-02. Thus, with another year of significant supplies, prices
for all grades of durum are still expected to soften from current
levels, assuming the quality profile of the North American crop
returns to normal.
Feed Barley
Offshore feed barley values are expected to improve in 2001-02.
Tighter EU, U.S., and global barley stocks, coupled with strong
import demand from North Africa and the Middle East, should support
global feed barley prices. With western Canadian barley production
expected to be lower in 2001 relative to the previous year, strong
domestic feed demand is expected to once again limit export
potential. The EU is not expected to apply export subsidies on
barley exports in the coming year, which will be supportive of
prices. However, with increased competition from Eastern Europe, a
larger Australian barley crop and substantial supplies of U.S. corn
in 2001-02, the upside price potential of this market is expected
to be limited.
Designated Barley
Global malting barley supplies are projected to remain relatively
tight in 2001-02. With virtually no carry-over supplies in the
major exporting countries and with import demand expected to remain
strong in the coming year, malting barley prices are forecasted to
maintain a considerable premium to feed barley values. Drought in
Western Canada will significantly reduce exportable supplies of
malting barley. Persistent dryness in the western growing area of
the U.S. may reduce the availability of two-row malting barley
supplies, potentially increasing U.S. demand for Canadian two-row
barley. Australia is expected to have larger exportable supplies of
two-row malting barley. However, lower two-row supplies in the EU
will likely offset this. As a result, global two-row malting barley
prices are forecasted to rise moderately and maintain a significant
premium to feed barley prices in 2001-02. Six-row malting barley
prices are expected to firm due to reduced U.S. carry-in stocks and
lower U.S. production.