Wheat growers in the Churchill catchment area are being offered a financial carrot to hold back some of their crop to ensure supplies are available when the port opens for the 2008 shipping season.
Farmers signing a Churchill corridor guaranteed delivery contract will receive a $2.50 a tonne premium for the top three grades of CWRS wheat.
They’ll also receive monthly storage payments of $1 a tonne for holding their wheat on the farm until it’s called for shipment to the port next summer.
A farmer signing up 1,000 tonnes of wheat and storing it from April to August would receive about a $2,500 premium, along with about $5,000 in storage payments.
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In announcing the new program, chief executive officer Greg Arason said the port’s July to October shipping season requires that a large volume of grain from the previous year’s crop begin moving to port in July.
“This program is designed to ensure that grain is on hand so farmers can benefit from the freight savings that Churchill offers,” he said.
A spokesperson for the agency said that with grain prices at such high levels, and a smaller crop, there is concern that farmers could try to clean out their bins, leaving the northern Manitoba port empty-handed.
“We want to encourage farmers in that area to resist the temptation to deliver earlier because it’s such an important port for farmers for the long term,” said Maureen Fitzhenry.
Farmers in the port’s catchment area have previously been eligible for a special rebate, whether or not their grain was shipped to Churchill. That payment worked out to around $1,700 each for farmers offering 1,000 tonnes.
The new program not only provides more money, it directs it to producers whose grain actually goes to Churchill.
Arnold Grambo, president of the Hudson Bay Route Association, welcomed the new program.
“We’ve been pushing for something like this for some time,” he said, to ensure grain is available for the opening of the port’s season. “This should do the trick.”
He also praised the board for its role in ensuring the port’s viability.
“This past season the only grain that went through Churchill was CWB grain,” he said. “There is no interest from private grain companies.”
Last year the board shipped 621,000 tonnes of wheat and durum through the port, the highest total since 1977.
Grambo noted that was achieved despite poor crops in the Churchill catchment area the past two years.
“When we start to see really good production, which we will, then we’ll really surprise people,” he said.
Bill Drew, executive director of the Churchill Gateway Development Corp., also welcomed the new program.
He said stock levels are always a concern for the port, which is owned and operated by Omnitrax, and the rebate and storage payments should help deal with that.
Port officials are planning how to spend some $8 million of federal and Manitoba government money to improve infrastructure.
“It’s an old port and it needs a lot of infrastructure improvement,” said Drew, especially if the port is to follow up on some of its expansion plans.
Among other things, it wants to improve its ability to import bulk commodities, increase grain movement by including more non-board grain, expand its Arctic supply business and expand last year’s inaugural shipments of milling wheat to Halifax.
