Farmers willing to hold over some of their high quality 2008 wheat into the 2009-10 crop year will be in line for extra cash.
The Canadian Wheat Board last week unveiled changes to its wheat storage program designed to boost farmer participation.
The program is designed to ensure the board has sufficient supplies of top quality wheat at its disposal to meet customer demand in the event the 2009 wheat crop is of low quality.
“Farmers can play an important role in ensuring that we have the right kind of wheat available for their best customers when it’s needed, regardless of the kind of growing season we have,” said board chief executive officer Ian White.
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“We think it makes sense to pay farmers themselves to store this grain if they can.”
With the 2008 wheat crop likely to be lower in quality and protein than the previous two years, top quality wheat for customers such as Japan and the United Kingdom could be in short supply.
Farmers who sign up No. 1 CWRS 15 percent protein wheat before the new Oct. 31 deadline receive a $15 a tonne premium at time of signup, as well as storage payments of $1 per tonne a month for a minimum of 12 months. None of the contracted wheat will be called for delivery before November 2009.
“People whose main concern is cash flow likely won’t be interested,” said board spokesperson Maureen Fitzhenry.
“But for those who can wait, they may think it worth their while to wait for an extra $27 a tonne.”
The premium for No. 1 14.5 percent is $10 a tonne, for a total extra payment of $22 a tonne.
The program will be available to all prairie farmers. Previously it was available only in areas where the board knew there was top quality wheat.
Fitzhenry said that change is designed to increase participation and also reflects increased uncertainty this year about where the high quality wheat is located.
The program also provides guaranteed acceptance.
If the 2009 crop produces enough high quality wheat so the stored wheat is not needed, the board will release farmers from their contracts and allow them to deliver immediately. Last year’s program attracted only 11,000 tonnes. The board said it hopes to get 50,000 to 200,000 tonnes this year.
The board also announced changes to its Churchill guaranteed delivery contract, which was first offered last year. The program provides a premium of $2.50 a tonne plus storage payments of $1 per tonne per month to farmers in the northern port’s catchment area.
The sign-up deadline is Oct. 31, and the wheat won’t be called before July 31, 2009, meaning a minimum eight months storage, or $8 a tonne, which produces a total extra payment of $10.50 a tonne.
