Canada: CWB announces important changes for barley marketing

Under a new CWB program, farmers will be offered the option of cash-price contracts for their malting barley, plus the benefits of single-desk selling through the CWB, according to CWB’s press release, January 9.

If these contracts were available through selecting companies today, the upfront cash price for malting barley producers would be over $5 per bushel, backed off to west central Saskatchewan, with flexibility to negotiate additional terms directly with the companies.

“We’ve developed an innovative program that delivers the options farmers are looking for in barley marketing,” said Allen Oberg, CWB farmer-elected director from Forestburg, Alberta. “Farmers have indicated that they want a strong, viable CWB as well as more choice. Under this program, they will have both.”

The program announced by the CWB today is called CashPlus and is designed to suit farmer needs and add flexibility in malting barley pricing. It also responds to the malting industry’s desire for improved operational certainty in the aftermath of upheavals in the Canadian malting barley industry during 2007.

Under CashPlus, the CWB will establish a guaranteed cash price for farmers that reflects market values. Participating selectors will then contract directly with farmers. The CWB will also pay a potential additional premium to farmers at the end of the crop year based on spreads between the guaranteed price and actual CWB sales returns for malting barley.

In addition to responding to producers’ desire for maximum returns from their barley, CashPlus provides a solid market-driven price signal to producers, buyers and other selectors. The attached backgounder provides some highlights of the CashPlus program. “As farmers elected to lead the CWB, it is our priority to ensure producers get the right mix of options for their business needs,” Oberg said. “This has been our focus since we took over leadership of our marketing organization in 1998. CashPlus is the latest example.”

Controlled by western Canadian farmers, the CWB is the largest wheat and barley marketer in the world. One of Canada's biggest exporters, the Winnipeg-based organization sells grain to over 70 countries and returns all sales revenue, less marketing costs, to farmers.

11 January, 2008