Farmers with top quality high protein wheat in their bins can now guarantee themselves delivery opportunities throughout the 2007-08 crop year.
A new Canadian Wheat Board program will pay a premium price and storage costs to farmers willing to set aside some of their top quality wheat to ensure premium customers are served throughout the year. The board wants to contract 150,000 tonnes.
“It’s based on the demand from a couple of our premium customers and approximates what they’ll want throughout the crop year 2007-08,” said Garry Pichlyk, the CWB’s senior manager of farmer services.
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Those customers want consistent monthly shipments, and the board will be able to call the contracted grain forward accordingly.
“We will move it throughout the whole 12 months and hopefully have it all moved by July 31, 2007,” Pichlyk said. A significant amount of high quality wheat is still in storage from last year’s harvest, he added.
If the 2007 crop is of high quality, and the contracted grain is not needed, the contracts will be cancelled and participating farmers will get a special delivery authorization to deliver all of their contracted wheat immediately.
The program will protect the board against the risk of a poor quality harvest that could impair its ability to service those high quality customers.
CWB chief executive officer Greg Arason said the program gives farmers an opportunity to help ensure premium customers are well-served.
“Farmer themselves will be working to increase the prospects for higher overall returns to the wheat pool,” he said.
“This program enhances our marketing plan because it helps ensure long-term reliability and supply of a premium product for our premium markets.”
Farmers will receive storage payments of $1 per tonne per month. The premium, which will be announced when sign-up begins on May 1, will reflect the additional revenue generated as a result of the program.
The board expects 1,000 to 2,000 farmers to participate.
The contracts will be restricted to 28 locations, which were selected for their ability to provide No. 1 CWRS 15 percent wheat and to load 50 or more cars on main lines. A portion of the program will be reserved for producer car shippers.
Farmers applying for contracts must submit a sample to the board, which will be examined by a third party to verify quality.
