The Canadian Wheat Board has offered producers a way to get out of the tanking durum market.
Growers can reduce their undelivered 2009-10 contract tonnage without penalty in Series A contracts and GrainFlo periods 2, 3 and 4 delivery contracts.
Producers wishing to do so must contact the wheat board by March 31.
The board unveiled the new policy in a letter to growers sent Feb. 22.
CWB spokesperson John Lyons said the new option was spurred by unfavourable global durum price and marketing conditions.
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“We know that durum growers may be trying to decide how much grain to market into this year’s pool and how much into next year, and we recognize that world durum prices are low for a number of reasons,” he said.
“Because of that, we just wanted to make people aware of their options, in particular this new one.”
The letter also noted two other options for contract holders.
They can reduce their Series B delivery contracts before the March 31 sign-up deadline. All unaccepted Series A contracts were automatically rolled into Series B.
They can also deliver in the current crop year but choose to price their grain in the 2010-11 crop year.
That option has a $5 a tonne fee, along with a $25 a tonne administration fee. The fees will be deducted from future CWB payments.
Lyons said there probably won’t be a lot of demand from producers to price old crop in the new crop year, given current Pool Return Outlooks.
The 2009-10 PRO for 1 CWAD 14.5 percent is $210 a tonne ($5.72 a bushel), which is higher than the first PRO for 2010-11 of $202 a tonne ($5.50 a bu.).
“At this point in time there may not be any incentive to price in next year’s pool, which may be why farmer pickup on this has not been high,” he said.
Lyons said the board is not encouraging durum producers to take any particular course of action but is trying to ensure they are aware of their options.
