The Canadian Wheat Board has released details of its newest wheat pricing program, first announced in April.
Under FlexPro, farmers can sign up as much tonnage as they want and price it any day during the crop year.
The sign-up period will be June 23 to July 28.
Farmers can lock in a price on any business day for any or all of their contracted tonnage.
They will get the initial payment at time of delivery and receive the difference within 10 days. Participants will still have to sign a separate delivery contract.
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CWB chief executive officer Ian White said FlexPro is a response to farmers’ business needs.
“Farmers have told us they want as much flexibility as possible in the way they price and get paid for their grain,” he said in a news release.
This program, along with other producer payment options, will help farmers maximize returns, minimize risk or manage cash flow, depending on their individual situation, he said.
FlexPro will offer a daily cash price that will reflect futures markets and CWB sales. The advance tonnage commitment will provide certainty for the board as it manages the program in terms of setting prices and hedging against sales.
The pooled basis will be based on the Pool Return Outlook and will incorporate futures prices and sales throughout the year.
Mel Pawlyk, who oversees producer payment options for the CWB, said the new program enables the board to retain the benefits of single desk selling, while at the same time allow farmers to take advantage of ups and downs in the futures market and price their grain outside the pool.
Cherilyn Jolly-Nagel, president of the Western Canadian Wheat Growers Association, which wants an open market for wheat, offered limited praise for FlexPro.
“It does appear to be moving in the direction we’ve been looking for, by giving the ability to price grain on a year-round basis.”
But she said the association doesn’t like the fact that prices are still based on the PRO, and questions the credibility of the basis.
“There is still no real explanation as to how they come up with the basis,” she said.
Market analyst Brenda Tjaden Lepp of FarmLink Marketing Solutions said farmers don’t want another complicated pricing option.
“The CWB keeps tinkering with what are already overly complex pricing programs, often for politically motivated purposes, without addressing the real limitations of the system,” she said.
Maureen Fitzhenry said any suggestion that the pricing programs are politically motivated is “absolutely untrue.”
She also denied the board is tinkering with its programs.
“We’re not tinkering, we’re improving the PPOs on an ongoing basis as we find out what works and what doesn’t. This is directly in response to what farmers say they want.”
Fitzhenry added the board will never be able to satisfy those who want an open market. Short of that, she said, a program like FlexPro is the kind of choice a lot of farmers want.
