Canada: CWB initial payments for 2011-12 crop much higher than last year’s

The Canadian Wheat Board (CWB) announced on July, 25 the 2011-12 initial payments for the various grades of wheat and barley. The payments are effective August 1, 2011 for deliveries into the 2011-12 pool accounts.

The initial payment for designated barley (two-row malting barley varieties) are set at C$230 per tonne for crop 2011-12 as compared to C$138 per tonne for crop 2010-11 (as at August 1, 2010).

The initial payment for Pool A feed barley is C$155/tonne vs. C$88/tonne a year ago.

Initial payments represent a portion of the returns farmers can expect from the sale of their grain over the entire year. Initial payments should not be confused with monthly Pool Return Outlooks (PROs), which are CWB estimates of farmers' total returns from each pool account.

During the crop year, the CWB regularly reviews the initial payments and recommends adjustment payments if market conditions and sales progress warrant. The Government of Canada guarantees initial payments and approves the level at which they are set.

Farmers may, alternatively, choose the CWB's Early Payment Option (EPO) as a payment method. The EPO, as with the other CWB Producer Payment Options, can be used as a cash-flow tool. It provides similar returns to the CWB pool accounts, less a discount. The EPO allows farmers to receive an additional payment, on top of the initial, within 10 business days of delivery. EPOs are available at values equal to 80, 90 and 100 per cent of the PRO.

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.

29 July, 2011