Canada: Canadian Wheat Board introduce Malting barley protein payments

The CWB announced in August that it will pay protein premiums to farmers who deliver two-row malting barley to participating elevators and maltsters (see attached) in the 2005-06 crop year.

"Designated barley protein payments will more clearly communicate market signals to farmers," said Earl Geddes, CWB vice president of Farmer Relations and Operations. "Farmers who produce more precisely the quality that maltsters want will now reap the benefits of those efforts."

The premiums will range from $5.40 for protein levels of 10.9 per cent and lower to $0.60 for barley with 12.5 per cent protein, reflecting the relative value of these protein levels to brewers and maltsters (see attached schedule). Protein levels are one indicator of malting characteristics. Levels that are too high or low can affect malting and brewing quality.

"This program will reward farmers who manage their crops to produce the protein levels valued by the malting and brewing industries," Geddes said.

Having access to a larger pool of malting barley in the premium protein range will aid the CWB in expanding malting barley sales opportunities for western Canadian barley growers.

The program follows up on CWB protein payments for wheat that have been available for several years. It will result in a more clearly defined and equitable distribution of designated barley pool earnings to growers than the present grades alone allow.

Consultations with farmers had identified protein payments as an important issue. The CWB also consulted with the grain and malting industries to formulate the program. It will be a pilot program for the 2005-06 crop year and will be evaluated after a year of operation.

The CWB and participating industry partners will jointly administer the malting barley protein payment program. It has been made available to all grain handling agents and malting companies for the 2005-06 crop year. Those who have chosen to participate are listed on the attached sheet. Grain companies and maltsters that wish to join the program in the coming weeks remain eligible to participate.

Protein premium payments will be based on protein tests of delivery samples, as verified by a third party. Payments will be made within 30 days of delivery. The program is currently limited to two-row malting barley because its market has the most clearly defined relationship between protein levels and prices paid by end-use customers.

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 to over 70 countries and returns all sales revenue, less marketing costs, to Prairie farmers.

30 August, 2005