With world wheat markets on a roller-coaster ride, a lot of growers are taking a look at the Canadian Wheat Board’s producer payment options as a safety belt.
Wheat futures have risen in recent weeks on production problems in the Black Sea region. Russia’s Aug. 5 announcement of a ban on wheat exports beginning Aug. 15 triggered wild fluctuations late last week as traders debated whether the peak had been reached.
Chris Kuntz, the CWB’s program service representative in Saskatoon, said that sparked a lot of interest from producers looking for a chance to cash in on the rising market and get price stability.
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“There’s been a lot of interest from guys that have never done them before and wanting to make sure they’re doing it correctly,” he said last week.
Kuntz said the level of interest probably matches the situation in 2007-08, when wheat prices saw record spikes.
“This is definitely the most interest since then,” he said.
Price premiums are available from the CWB programs.
For example, the fixed price contract Aug. 3 offered $268.98 per tonne for Canadian Western red spring. That represented a premium of $43.98 per tonne, or 20 percent, over the pool return outlook.
The board issued a special advisory to producers last week urging them to check out the various programs available by calling their local producer representative or visiting www.cwb.ca and clicking on Producer Payment Programs.
Kuntz said three programs make the most sense in a rising market: FlexPro (signing deadline has passed), a Fixed Price Contract and a futures-first Basis Price Contract with a floating basis.
One farm group complained the CWB is missing out on the full benefit of the recent price increase because of regulatory constraints imposed through the CWB’s single desk.
“Farmers in Ontario, Australia and everywhere else in the world have the opportunity to cash in on this rally,” said Western Canadian Wheat Growers Association vice-president Stephen Vandervalk.
“Only in Western Canada are we stuck on an island of low prices.”
The association said the top price offered by the CWB last week through FlexPro was below the typical price being offered at grain elevators in the northern United States.
The United States Department of Agriculture surveys elevator prices and last week in northeastern Montana, elevators were offering $4.58 to $5.41 US per bushel for 13 percent protein dark northern spring wheat. The range for 14 percent was $5.78 to $6.61 per bu. and for 15 percent, 6.78 to $7.61.
