Canada: CWB market-based pricing options expanded to feed barley

The CWB’s farmer-controlled board of directors has approved a number of refinements to the CWB’s 2007-08 Fixed Price (FPC) and Basis Price (BPC) contracts to provide farmers with more pricing flexibility, more contract options and simpler administration, according to CWB’s news statement of December 7th.

These innovative market-based programs, first introduced in 2000-01, enable farmers to lock in a price for their grain based on futures markets values. The refinements, approved at the board’s November 23 meeting, will come into effect at the end of February 2007. They include:
• offering a BPC pricing option for feed barley;
• expansion of the FPC and BPC pricing options to include Pool B feed barley deliveries;
• simplification of the the quality transfer clause in both the feed and selected barley FPC and BPC and;
• increasing the force major clause tonnage limit to 200 000 tonnes for all programs combined, up from a limit of 100 000 tonnes in the 2006-07 crop year.

“Farmers have made it clear to us that having a variety of pricing and payment options to choose from, is very important to their businesses,” said CWB president and CEO Adrian Measner. “These enhancements were proposed following a complete review of all our Producer Payment Option programs, which was completed in October.

“They build on an impressive array of options that have literally transformed this organization since farmers took it over in 1999. Farmers now have more pricing choice than they would have under any other grain-marketing model.”

The expansion of the fixed priced program means this option will be available for both Pool A and Pool B feed barley, as well as for wheat, durum and selected barley. Basis contracts will be an option for feed barley, as well as wheat and selected barley.

A record number of producers – almost 14,000 – chose to participate in market-based CWB Producer Payment Options for 2006-07, a four-fold increase over last year, with a 500-per-cent increased in committed grain at over 3.5 million tonnes.

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.

08 December, 2006