The Canadian Wheat Board will be a significant player in an open grain market, but farmers will have to wait a bit longer for specifics about its new contracts and programs, according to a top CWB executive.
Gord Flaten, vice-president of marketing and sales, said the board has been working hard behind the scenes to ensure that competitive programs are in place before Aug. 1.
“We are ready,” Flaten said Jan. 13 during a presentation at Crop Production Week in Saskatoon.
“We believe we will be a good marketing option for farmers … and we think we will be a significant player in the western Canadian grain industry.”
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The board’s new programs are expected to include cash contracts, harvest pools with flexible delivery dates and early payment options, and futures contracts that allow producers to choose between base delivery grades and different delivery windows.
The harvest pools will likely require producers to sign up shortly after harvest but before a specified post-harvest deadline.
The pools are expected to cover red spring wheat, durum, winter wheat and malting barley.
The CWB will continue to publish Pool Return Outlooks but permit books and contract calls will likely become things of the past.
Feed barley business will likely be conducted only on a cash basis.
The board is also considering a pre-harvest pooling option that would require growers to sign up production before the crop is seeded.
Pre-harvest pooling would allow the CWB to estimate the volume of grain at its disposal and would enable the board to begin marketing new crop wheat, durum and malting barley well in advance of harvest.
The board will continue to examine different aspects of pre-harvest pooling, including the potential use of an act-of-God clause that would reduce producer risk in the event of a crop failure.
Although the board is free to deal in all crop types come Aug.1, Flaten said directors and staff will focus primarily on finalizing contract details for the core crops of wheat, durum and barley before expanding into so-called non-board crops, such as canola, lentils, peas and oats.
CWB programs will not be made available to growers until the board has had an opportunity to conclude commercial grain handling agreements with private-sector grain handlers and elevator companies, a process that has been underway for some time.
“We’re discussing (commercial agreements) with all of the companies and those are discussions that are going on behind the scenes,” Flaten said.
“As soon as we reach some agreements, that will be common knowledge.”
Private sector grain handlers including Viterra, Richardson International and Cargill have already begun signing forward delivery contracts with prairie farmers.
A number of companies unveiled details of their delivery contracts in mid-December, shortly after Bill C-18 received royal assent in Ottawa.
Asked if the wheat board was concerned about further delays in rolling out their programs for the 2012-13 marketing year, Flaten said the board’s top objective is to negotiate reliable agreements.
“I think the priority is to get good agreements so that we can offer good contracts and good services for farmers so we’re focused more on that than we are on a particular date,” Flaten said.
“There are also some limits to how much forward sales demand there is and it’s still fairly early in the 2012-13 marketing campaign, so that’s not a really big concern right now.”
Flaten also dismissed concerns about growers holding back significant quantities of old crop wheat and durum and contracting it into the 2012-13 marketing year.
He said the CWB is expecting a smooth transition between crop years with no significant hiccups in grain flow or logistics.
The board announced last week that it will be offering Series B contracts, giving growers an additional opportunity to market grain from last year’s harvest before Aug. 1.
