When is 60 percent greater than 100 percent?
When it involves durum deliveries to the Canadian Wheat Board.
The board recently announced it would accept just 60 percent of the durum contracted by farmers for 2009-10, which translates into about 3.8 million tonnes.
Two years ago, the board accepted 100 percent, which brought in about 3.6 million tonnes.
Last year, an 80 percent acceptance brought in about four million tonnes.
“We’re taking in about the same amount of durum as last year,” said Bruce Burnett, market analyst for the wheat board.
Read Also
Saskatchewan, Manitoba sign Arctic Gateway deal
Saskatchewan, Manitoba and Arctic Gateway Group have signed an MOU to strengthen trade through the Port of Churchill.
“It’s just that we have so much more durum out there that the percentage call is that much lower.”
He said the 3.8 million tonnes accepted this year is slightly above the 10-year average and slightly below the five-year average.
The percentage call for durum wheat can vary from year to year. World demand for the pasta-producing wheat remains fairly constant over time, but the size of the Canadian crop can swing widely.
Durum acceptance was 75 percent in 2003, 63 percent in 2005 and 100 percent in 2008.
Burnett said that while growers would obviously like to deliver more than 60 percent of their crop, most of those he has spoken to understand the situation.
“They’re disappointed because this has an impact on their cash flow and their storage costs, but they understand the marketplace, especially the long-term durum growers,” he said.
“They understand the marketplace is finite and if we produce two or three big crops in a row, we’re going to have carryout stocks.”
Kevin Bender, president of the Western Canadian Wheat Growers Association, said the 60 percent acceptance was no surprise given market conditions.
“It’s in line with what I expected, but it’s still a disappointment because guys would rather get rid of it than carry it over again.”
He said under an open market system, farmers who are desperate to move their crop would have the opportunity to dispose of it at lower prices for feed or into the U.S..
Asked if the board should sell high quality durum into lower priced markets to move more product, Bender said it’s a tough question.
“Probably some farmers would be fine with that and others would say, ‘no, I want full value for my crop,’ ” he said.
“It should be left to the individual.”
2009-10 durum facts
- Durum production was 5.4 million tonnes.
- Carry-in stocks resulted in a total supply of about 7.4 million tonnes, while world demand was about 7 million tonnes.
- World demand for high quality durum was 3.5 million tonnes while Canadian supply was 6.9 million tonnes.
- Carryout as of July 31 is expected to be 2.65 million tonnes, up 40 percent from last year’s 1.9 million tonnes.
