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Canadian Wheat Board

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Farmers

Early Payment Options

Program information

The Early Payment Option (EPO) contract is designed to provide additional cash flow throughout the crop year and to provide a floor price for grain committed to the program. The EPO program allows producers to receive an Early Payment Value (EPV) of 80, 90 or 100 percent of the Pool Return Outlook (PRO), less a discount, based on a reference grade. The discount represents the risk to the CWB of guaranteeing the early payment, time value of money (the cost of financing the payment) and administration. Tonnage committed to an EPO remains eligible for pooled sales returns.

Separate programs are offered for milling wheat, feed wheat, milling durum, No. 4 CWAD and No. 5 CWAD, selected barley and feed barley.

The EPV and discount are both locked in at sign-up. Pricing information is available by calling 1-800-275-4292, or on the pricing schedule on the left side of this page. Prices are updated daily at 2:30 p.m. Central Time (CT) and remain in effect until 7:30 a.m. the following business day.

Producers can sign up for an EPO by calling 1-800-275-4292, with their Producer Identification Number and Personal Identification Number (PIN), or by faxing a sign-up application to 204-983-8031. Applications are available on the menu on the left side of this page or through Fax on demand at 1-800-275-4292.

Contract sign-up

Producers can sign up an EPO contract from August 1, 2007 until July 31, 2008. The CWB will terminate EPVs when the initial payment for the reference grades are increased during the crop year and approach or exceed the EPV lock-in levels, reducing or eliminating additional cash flow. Below is a list of termination dates for 2007-08:

2007-08 EPV Termination dates

 

80%

90%

Wheat

 

 

CWRS

Nov 16/07

 

CWHWS

Nov 16/07

 

CWES

Nov 16/07

 

CPSR

Nov 16/07

 

CPSW

Nov 16/07

 

CWRW

Nov 16/07

 

CWSW

Nov 16/07

 

Feed

Nov 16/07

Nov 16/07

Durum

 

 
Milling    
No. 4 CWAD    

No. 5 CWAD

Nov 16/07

Nov 16/07

Barley

 

 

Two-Row

Nov 16/07

Nov 16/07

Six-Row

Nov 16/07

Nov 16/07

Feed (Pool A)

Nov 16/07

Nov 16/07

A minimum of 20 tonnes must be committed to an EPO contract. Tonnage can be committed either before or at the time of delivery.

Reference grades and deliverable grades

While EPO contract values are quoted based on reference grades, other grades are deliverable against the contract. Below is the list of reference and deliverable grades for each program.

Wheat

Reference grade

Deliverable grades

CWRS

No. 1 CWRS 13.5

All grades and protein except feed grades, sample grades and mixed grain

CWHWS

No. 1 CWHWS 13.5

CWES

No. 1 CWES

CPSR

No. 1CPSR

CPSW

No. 1 CPSW

CWRW

No. 1 CWRW  Select 11.5*

CWSWS

No. 1 CWSWS

Feed Wheat

CW Feed

CW Feed, No. 4 CWRS, No. 4 CWHWS and No. 3 CWSWS

Durum

No. 1 CWAD 13.0

All grades and protein except feed grades, sample grades and mixed grain

No. 4 CWAD

No. 4 CWAD

No. 4 CWAD

No. 5 CWAD

No. 5 CWAD

No. 5 CWAD
Selected barley    
Selected 2-Row Standard Select All select grades except sample grades
Selected 6-Row Standard Select
Feed barley No. 1 CW No. 1 and No. 2 CW
*For 2007-08, the reference grade has changed. Previously, it was No. 1 CWRW.

Delivery and settlement

EPOs require 100 per cent delivery of the tonnage commitment. Failure to do so by the end of the crop year will result in the assessment of pricing damages on any shortfall tonnage.

At the time of delivery, producers should advise elevator staff to apply the deliveries to the EPO contract. Producers will receive the initial payment of the grade delivered, less freight and elevation, at the elevator. When the elevator reports the cash ticket, the CWB will issue the additional payment representing the balance of the contract price within 10 business days.

Minimum delivery guarantee for durum

The CWB offers a minimum guarantee for durum because acceptance levels can be less than 100 per cent. To help producers determine how much of their crop to commit to an EPO, the CWB provides a minimum delivery guarantee. For 2007-08, the guarantee is 80 per cent of the production offered under the Series A delivery contract, to a maximum of a producer’s EPO tonnage. Unaccepted tonnes must be rolled to the Series B contract for consideration under the guarantee.

Quality transfer

Producers can transfer between EPO programs in the event of grading changes (i.e. a milling wheat to a feed grade wheat EPO and vice versa). The producer will receive the EPV that was in effect for the new grade on the original sign-up date, based on the following formula:

(original discount of the existing EPO – current discount of the existing EPO) + (current discount of the transfer class – original discount of the transfer class), if negative, then zero.

A roll fee and $15 per transaction administration fee will be added to the calculation. The roll fee is $1.00 per tonne for 100 per cent EPV transfers, $0.50 per tonne for 90 per cent, and $0.25 per tonne for 80 per cent.

Buyouts

The cost of buying out of an EPO contract commitment is:

EPO discount – time value of money.

More program information

For more information on the EPO program, call 1-800-275-4292.

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2007-08 Early Payment Option

User guide

Worksheets

Information sheets

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