This summer’s rally in wheat prices has been a bright spot in an otherwise difficult growing season for most prairie farmers.
During this challenging time, farmers need sound business and pricing information. The Canadian Wheat Board has been working to ensure farmers are alerted to potential opportunities in this volatile market environment.
Recent comments from the Western Canadian Wheat Growers’ Association have been singularly unhelpful to producers during this time, serving only to create confusion and anxiety. This group has made misleading comparisons between wheat values available to western Canadian farmers and posted U.S. elevator prices.
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The CWB’s own analysis shows values available to western Canadian farmers through Producer Payment Options have been similar to U.S. values, depending on contract specifications and freight/handling deductions. For example, it was possible to have achieved $8.42 a bushel (before deductions) through the Basis Payment Contract by locking in on peak days.
So-called “losses” calculated by the WCWGA are also nonsense, even more so if they are meant to apply to all western Canadian farmers, who clearly could never sell all their grain to one elevator at a single posted price.
By contrast, prairie farmers who sign up for CWB pricing options are free to lock in whatever volume they choose at any posted value they find attractive. In addition to CWB pricing options, farmers are free to use a broker to take a wheat futures position or use exchange-for-physicals to price the futures portion of a CWB Basis Price Contract at a later time.
Western Canadian farmers have a wide variety of options available to price their wheat. We encourage them to consider taking advantage of these choices to make pricing decisions that are in the best interest of their own farming operations.
Allen Oberg,
Chair, Canadian Wheat Board,
Forestburg, Alta.
