John Beck recently sent a load of durum to the elevator, expecting a cheque for his efforts.
But he didn’t get a penny.
The money all went to pay back the spring cash advance he took to finance this year’s crop.
“There wasn’t enough to pay my trucker,” said the farmer who seeds 1,600 acres at Lake Valley, Sask., northwest of Moose Jaw.
Beck, who has been farming for 40 years, said cash advance repayments are eating up the low initial price.
He wonders why the Canadian Wheat Board has not applied for an initial payment increase.
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“We have no money and we’re not getting any.”
He said grain farmers will face a “mad banker crisis” if something doesn’t change.
CWB spokesperson Rheal Cenerini said everybody in the industry wants higher prices.
The initial prices were set at a lower level than they are traditionally. Normally they are about 75 percent of the June Pool Return Outlook. This year, they are 65-70 percent.
Advance payment rates for the current crop year were $80 per tonne for wheat, $90 for durum and $45 for barley, to a maximum of $50,000.
Even though world stocks are at historically low levels, world export markets have not responded with higher prices, Cenerini said.
International subsidies continue to depress the market.
And, the higher Canadian dollar alone has taken $1 off each bushel from what it would have been at last year’s exchange rate. Cenerini said farmers can roll their spring cash advances over to fall.
They can also take advantage of the board’s early payment option to gain earlier cash flow and know that they’re going to receive a set price for their grain.
He said the board would request an initial payment increase as soon as it sees an opportunity, but that would take six to eight weeks to implement.
“We need to feel quite comfortable that market factors are such that we do not incur undue risk,” he said.
