SASKATOON – Wheat payments will be tied even more closely to protein content in the next crop year.
Beginning Aug. 1, the Canadian Wheat Board will pay premium prices for Canada Western red spring wheat with protein measuring 13 percent and 14 percent. Currently, premiums are paid on protein levels of 13.5 and 14.5 percent.
Premiums will also be paid on a one-year trial basis for Grandin wheat (graded as 1 and 2 CW Experimental) with a protein content of 13 percent.
And in a bit of a twist, low protein levels will mean a higher price for soft white spring wheat growers. The board will pay a premium for 1 and 2 CW soft white spring with protein content of 9.9 percent or lower.
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There will be no change in protein premiums for durum wheat, which are paid on 1 and 2 CWAD testing 13 percent or higher.
The board said the new pricing structure is a response to requests from farmers that wheat payments reflect more accurately the quality of their grain and the price paid by the end-user.
“The premiums will allow the CWB to reflect market value and customer demand for protein back to farmers,” the agency said. Size of the new premiums will be announced with initial payments before the end of the crop year.
The push for more protein payments became more intense this year because of extremely high protein premiums in effect in 1993-94.
Premium for low protein
The decision to pay a premium for low-protein soft white spring wheat was welcomed by John Nikkel, president of the Alberta Soft Wheat Producers Commission.
“We’ve been pushing for this for a long time,” he said from his farm at Coaldale, Alta.
“It gives the producer who makes a special effort to grow a quality crop some incentive.”
Soft white wheat is used in the manufacture of products like pastry and cake flour and processors demand low protein.
Farmers can reduce protein levels by irrigating more and using less nitrogen fertilizer.
The additional irrigation boosts farmers’ costs and the reduction in nitrogen means lower yields, but hopefully the premium will be large enough to make up for that, Nikkel said.
He added it will be very difficult to achieve 9.9 percent: “Maybe 10 percent of our producers will achieve that.”
The additional segregation will also mean higher costs for grain handlers, who will have to bin the new classes separately. But if it allows the board to do a better job of matching supplies to customers, the benefits could outweigh the costs.
“If it helps the board increase sales, the grain handlers will get an increase in volume,” said Maurice Demmans, manager of country operations for Saskatchewan Wheat Pool.
The board said there will be a series of four special delivery contracts for low protein soft white spring wheat on the basis of consigned carlot quantities.
