The deadline for signing up for the CWB’s early delivery pool is Sept. 28, the day after most of you will read this column.
The number of sign-ups for the early program will be one of the first indications of whether the new CWB can provide offerings that prairie farmers find useful and whether the organization has a viable future.
Another test, a bigger one but not the last, will come Oct. 31, the deadline for signing on to the regular harvest pool.
Of course, the CWB is also cash buying grain and has a pool and cash program for canola.
It is hard to predict how the first crop year for the new CWB will go. The transition was full of challenges for the organization as it developed new contracts, negotiated handling agreements with grain companies and attempted to maintain good relationships with farmers and customers, all the while undergoing the trauma of laying off a huge part of its staff whose jobs had disappeared.
Gord Flaten, head of CWB grain procurement, gave an update on the organization to the Canadian Farm Writers’ Federation Sept. 23.
He said it was too early to make any judgments, but he was generally pleased with the response of farmers to the new CWB offerings and the level of interest in learning more.
The CWB recently held what must have been, at least in my limited knowledge, one of the largest telephone conference calls ever staged.
Flaten, CWB president Ian White and 2,500 farmers were all on the phone together for about 90 minutes talking about CWB programs.
In that call, 81 percent of the farmers said they were considering pooling all or a part of their wheat and 75 percent said they intended to pool some of their durum, Flaten said.
The vast majority said they were considering pooling more than half their crop, he added.
While the CWB has had deep staff cuts, it has retained almost its entire sales department. These people are experienced, have contacts with buyers and will do their best to get the best price and basis possible.
Their goal is not to pick the peak of the market, Flaten said.
“But what we can claim is that on any given day we will get good value for that grain.”
At this early stage of the crop year, developments are emerging that will shape the potential success or failure of CWB programs.
There is a large, quality crop that is being harvested ahead of the normal pace. Farmers will know the volume and quality of the grain in their bins, and that will make it easier for them to make marketing decisions early.
That is generally good for the CWB.
On the other hand, prices are high this year, even during harvest, which is when increased farmer deliveries often pressures prices lower.
That might encourage farmers to take prices offered now rather than put their grain in a pool and risk averaging in lower prices if the market weakens later. And that risk can’t be ignored. Even though tight grain stocks provide strong market support, broader economic issues such as anemic U.S. growth, the European debt crisis and slowing Chinese growth could conspire to knock the legs out from the market.
Because it can no longer count on getting all the Canadian wheat and durum crop, the CWB is delaying most of its forward selling until the contract deadlines have passed.
White has suggested that a reasonable target for CWB market share would be 30 percent of the crop.
Only time will tell if that assessment is correct.